Key performance indicators are effective tools for tracking progress and pinpointing where your business needs improvement. Out of the numerous possible MSP KPIs, three IT service provider metrics in particular deserve close attention.
Learn more about these MSP KPIs and find out how focusing efforts on improving these numbers has a positive effect on your business.
1. Monthly Recurring Revenue (MRR)
All business owners know they need to generate revenue. That’s a no-brainer! Instead of trying to get any and all revenue you can, though, put a greater focus on generating monthly recurring revenue and not one-time projects. You need a steady cash flow each month to keep your MSP running and profits up.
Since every new client your sales team closes with brings more MRR, invest in your sales process. Evaluate how effective it is and determine if you’re packaging and pricing your offering in a way that closes the most deals.
2. All In Seat Price (AISP)
How many seats are you supporting, and how much are you charging per seat? The AISP metric reveals a lot about an MSP – specifically, if it is charging enough for its services. To calculate this MSP KPI, divide your monthly recurring revenue by the number of seats you support (or use this handy calculatorto get your number).
Average MSPs typically charge less than $100 per seat, while World Class MSPs command anywhere from $120 to $160 per seat. To get these higher prices, you need to adjust your service offering and leverage your Super Power for an increased competitive advantage.
3. Reactive Service Tickets
You’re always going to face some number of reactive service IT tickets. In fact, those are probably the majority of IT tickets that are coming in right now. But when you take a more proactive approach to servicing your clients, you can minimize the number of reactive tickets coming in and put time back into your employees’ schedules.
Start by forming a proactive approach that enables your employees to:
- Set IT standards for your clients
- Align clients with these standards
- Monitor IT systems for needed updates and issues
Instead of waiting for problems to arise, keep an eye on your clients’ IT solutions to ensure they’re running efficiently. When you do, you’ll minimize reactive tickets and improve this MSP KPI.
Use these MSP metrics as guidelines for taking your MSP from average to World Class. Invest a little time and effort each month into improving these numbers, and you’ll start to see a positive change in your business and your bottom line.
Calculate these MSP metrics – and others – to determine if your business is average or World Class.