Q: As a new MSP, we’re slowly adding and supporting new customers. While our business is still in the red due to our overhead costs, what are some ways we can measure our success other than traditional profit and loss?
While it’s important to make your MSP profitable, sometimes it takes a little time to hit that milestone. Until then, there are a variety of ways you can measure your success as your MSP business continues to grow. Whether you’re adding two clients a month or 200, success can look drastically different from one MSP to the next. We asked a few of your peers how they measure success other than traditional profit and loss, and we developed some actionable goals for you to aim for in the coming months.
How to know if your MSP is successful
While traditional profit and loss reports are a great way to make sure you’re bringing in enough revenue for your business to stay afloat, that isn’t always the best way to measure your MSP success—especially if you’re just starting out. Here are four additional ways you can measure success other than just focusing on profitability.
1. Happy customers are the number one way your MSP peers measure their success. The MSPs we talked to all have their own interpretation of customer happiness—if customers are satisfied with the services, if they’re upgrading their service packages, if they’re advocating for the MSP, etc., but the underlying message is clear—happy customers are essential to your success.
Customer service starts from the first conversation, and keeping them happy is where challenges can pop up. Would they recommend your IT services to their contacts and connections? Do your technicians handle problems in a timely and professional manner? Every customer interaction has the potential to make or break your customer relationship.
To keep customers happy, it’s important to know what their expectations are from the beginning. Do they want you to control all aspects of their IT environment? Will they be relying on you to deliver 24/7 support? Are they hoping you will train their employees about cybersecurity or notify them of emerging threats? Knowing what a customer’s expectations are from the beginning will help set up your MSP for success—and will eliminate any gray areas from the start.After you have your initial setup conversation, regularly check in with your clients to ensure that everything is working properly and that they’re still happy with the services. If they aren’t happy, it is a good opportunity to find out where you can improve—before their contract is up. After all, customer happiness is only a reliable measure of success if it’s something you’re regularly evaluating.
2. Employee satisfaction is another area where your MSP peers told us they measure their success—and with such high demand for skilled technicians in the industry, every staff member counts. Keeping your employees happy can take time and effort, but the reality is employees’ attitudes are contagious, so an unhappy employee could lead to unhappy customers.
One partner who spoke with us at the Intronis MSP Solutions’ sales kickoff said that his MSP was in touch with their customer satisfaction level, but now they want to focus on getting their employees on the same metric. While it’s important to focus on customers and growing your business revenue, your employees are the bread and butter of your business.
To build employee morale, have managers meet with employees one on one to establish goals. Where do they want to take their career? Is there a clear path for growth? What skills can they work on developing that will help both your business and their career? If employees become stagnant in their careers, chances are they’ll begin looking to go to another company. Having employees and managers focus on development goals together can help employees be more satisfied in their daily job functions.
3. Customer retention was another popular metric suggested by your MSP peers as a way they evaluate their business success. This goes hand-in-hand with customer satisfaction—after all, why would a customer stay with your MSP is they were unhappy with the service?
Customer retention can help you set SMART goals for your MSP that are specific, measurable, achievable, relevant, and timely. Highlight what you want to achieve with your customer retention goal, and be specific. For example, do you want to limit customer churn to 5 percent over the course of year? Decide how often you’re going to track your progress toward this goal and how you’ll measure your success. Are you setting yourself up for an achievable and relevant goal that will help your MSP grow, and are you giving your team enough time to achieve the results that you’re looking for?
By setting SMART goals for to improve your customer retention, you can set your team up for success. Not every customer will renew their contract when the time period is up, but little tweaks to your customer service model can go a long way toward helping you secure more renewals.
4. Specialization. A few of your MSP peers said that one way they determine their success is by helping clients solve their unique IT problems. Whether they’re in a specific vertical or require a specialized service, being able to tailor their services for those client helps these MSPs feel successful.
Your MSP can’t specialize in everything, but once you find your niche in the market, your customers will take note. Whether you focus on selling managed services to healthcare organizations, schools, or auto dealerships, having industry knowledge can help you distinguish your MSP from the competition. If possible, choose a few verticals to pursue and learn the different support levels and requirements that are needed within each industry. Doing this will help you establish expertise.
Whether your MSP has been established for less than a year or for more than 20 years, measuring your success and tracking the metrics that matter is important. There’s more than one way to do it, but however you choose to look at it, make sure you set goals to help keep you on the path to success.
Ask an MSP Expert is a weekly advice column answering common questions from MSPs and IT service providers. It covers topics ranging from pricing and selling to marketing and communications—and everything in between.