Tracking data keeps your business on the right track. Measuring your MSP metrics, in particular, helps you achieve quick results and determine where business stands in the market. It can also help in monitoring your team’s productivity and efficiency and making sure your clients are provided with good services.
What Are MSP Metrics?
Managed service providers (MSPs) like https://www.executech.com/managed-it-services-seattle/ specialize in different areas including security, network, infrastructure, and application services. MSPs often hold a multitude of tasks regularly to improve and make solutions for your needs. There are different categories for MSPs by the services they provide:
- Real-time support
- Hourly service rates
- Schedule maintenance
- Service salaries
Choosing the right MSP metrics for your business is pivotal. MSP metrics depend on the business you’re handling since some of them may be more relevant to your operations than others. For example, if your MSP is handling customer service, then you’ll need to monitor and measure metrics such as the customer satisfaction (CSAT) score, the net promoter score (NPS), and the renewal rate.
Why Should You Measure MSP Metrics?
Here are five reasons your business should measure MSP metrics:
1. It Identifies Your Weaknesses
MSP metrics let you pinpoint your business’s weaknesses. For example, does your business address your clients’ needs slowly? By using average resolution time, you can observe how fast you deliver your services to your clients and customers. To measure your resolution time, here’s the formula:
Total resolution time / total number of resolved requests = Average resolution time
Recognizing business problems allows you to come up with strategies that can help you avoid potential obstacles to your business growth. For example, if you want to improve your business resolution time, you ask the MSP to hire more employees to address your clients’ needs.
2. Calculate Your Month Recurring Revenue
In the subscription industry, this is one of the most important metrics that companies use. Monthly recurring revenue is earnings that you receive every month. Measuring this, you can obtain details that you need for business growth.
Multiplying your total number of paying users by average revenue per user is how you calculate your MRR.
Monthly recurring revenue = Number of subscribers under a monthly plan * Average Revenue Per User
3. Utilizes Your Resources
Resource utilization rate allows you to see how your team spends their time. It’s a metric used to track the regular productivity of your employees so they can create well-planned decisions that optimize profitability. For example, when one of your employees has too many tasks on their hands, you can assign somebody suitable to other projects to keep the workflow going. Having a good utilization rate results in excellent scheduling implementation.
4. Quantify The Cost Of Sold Merchandise
If your profits are increasing, resources are essential to produce services or merchandise. This is a key index to intuit your profitability. The cost of goods sold depend on goods and services offered by the company. They include:
- Labor costs
- Raw materials cost
- License costs
- Cost of parts in making a product
- Distribution or sales force costs
It can notify you when your company is spending on excessive production costs. Cost of goods goes in accordance to cost of sales as they determine whether business allocation can result in a good product or service.
5. Maintains Relationships To Your Customers
Keeping a good relationship with your customers can be a challenge as their demands tend to change over time. Customer satisfaction often determines how long you can have your client remain loyal to your business.
Customer lifetime value measures your customer’s worth to your company. This is relevant as keeping existing customers costs less than obtaining new ones. Customer lifetime value aids businesses to come up with game plans in gaining new customers and keeping their relationship with existing customers.
6. Monitor Your Costs and Adjust Expenses
Business owners sustain various types of expenses in managing their business. Administrative expenses are expenditures that are not related to the sales of goods and services. Understanding general or administrative expenses helps a business monitor its budget and boost its profit margin. Types of administrative expenses are the following:
- Building rent
- Utilities, equipment, and supplies
- Audit fees
- Corporate wages
- Legal counseling
Wrapping Things Up
Working with an MSP is vital to your business growth. Understanding your business’s performance and health lets you make adjustments to your business decisions and visualize your goals. Being in a competitive marketplace, you must stand out from all the companies by being methodical and practical. If you want your business to scale quickly and achieve long-term operational flow, MSP metrics are a must.