Top MSP KPIs for Measuring Managed Services Performance

Managed service providers (MSPs) are essential for IT support. 

They offer commodity services for infrastructure, end-user device support, and highly specialized support for software-as-a-service (SaaS) applications.

Technical complexity drives hyper-growth for MSPs, who need to be ready to scale and sustain an effective onboarding and early support experience, retain confidence, and attract and retain the staff required to do so.

What are the KPIs for managed service providers? 

Hyper growth means greater competition and knowing how every aspect of client service and support is managed. MSP key performance indicators (KPIs) offer an at-a-glance view of metrics in a single dashboard with drill-down capabilities to identify the areas performing well or needing improvement. 

MSP KPIs should be established based on critical success factors that maintain both client retention and the reputation of the managed service provider.

The KPIs that help MSPs succeed fall into three major categories:

Why do MSPs need KPIs?

Small and midsize business (SMB) IT teams are asked to do more with less, and technical development can outpace the organization’s ability to respond. Moreover, the computing environment’s complexity – from the hybrid workplace to distributed cloud computing – and the need to secure the business make it difficult to attract and retain qualified technicians for IT support. 

It’s less expensive to buy specialist services than to keep up with technology demands. That’s why half of IT organizations prefer outsourcing the management of complex SaaS programs, up from only one-third last year.

While this growth is excellent news for MSPs, they need a talented workforce to support the demand. Another key issue is delighting their clients without burning out their agents while managing exponential growth. 

A good set of KPIs that provide a snapshot of daily operations and client management success can solve many problems MSPs face with increasing tech demand. Measuring performance using these KPIs enables them to develop a growth strategy that addresses key issues and improves and scales over time. This ensures MSPs stay on top of issues and avoid losing customers.

Here’s why MSPs need KPIs to drive growth while mitigating support complexity.

MSPs need a robust KPI program to routinely demonstrate their success and justify their value to their partners. KPIs provide a robust and well-rounded view of MSP operations from onboarding to service delivery.

Top MSP KPIs

Measuring performance is critical for MSPs to ensure success in IT service delivery. Let's examine the top MSP KPIs every MSP should track to meet their goals.

KPIs to track during onboarding

Efficient onboarding ensures a great customer experience. A poor onboarding experience can lead to a poor first impression. This could set the tone for future customer support.

Customers who don’t receive adequate support and have a poor first impression of you would be reluctant to trust you, increasing ticket volume and putting additional strain on internal teams. Measuring customer satisfaction, ticket escalation volume, and agent satisfaction during onboarding help the process work effectively. 

Client onboarding satisfaction

During the initial onboarding and early support (the first 90 days of the contract), use a client onboarding satisfaction survey to gather relevant satisfaction data.

This survey should look at the client’s general satisfaction with the process as an overall rating and the likelihood they would recommend you (net promoter score). It should also look at how easy it is to engage you for support (customer effort score or CES), ensuring that new clients know how to obtain the support they’ve contracted.

Ticket escalation (at onboarding) 

Once the new client is operational, measuring the ticket escalation volume aptly indicates whether standard onboarding and issue resolution practices are working for the customer. Too many escalations can lead to dissatisfaction later, so minimizing them is critical.

Ticket escalation can be a simple number enabling MSPs to spot the overarching trend or be measured as a percentage of the overall tickets logged. The ratio is easier to compare across clients as the number of tickets logged can vary based on the size of the client’s footprint.

MSPs should benchmark the ticket escalation percentage overall and by the client, documenting results over time to see trends. MSPs can use the trend data to understand the average percentage of escalations during early support and ongoing support.

This helps identify the tipping point at which client satisfaction starts to dip as escalations rise and deploy measures to automatically notify appropriate personnel when a client’s escalation rate approaches the set threshold.

Agent satisfaction (at onboarding) 

Efficient client onboarding becomes critical during hyper growth. The support staff has to onboard multiple clients simultaneously, which can overhwhelm them. 

A great onboarding experience not only drives client satisfaction but also agent satisfaction and prevents turnover. Measuring agent satisfaction during onboarding helps remove inefficiencies or bottlenecks and smoothly transition them to ongoing support.

Consider these factors to improve agent satisfaction:

• Bottlenecks between sales or contracting and the onboarding team and a lack of adequate information about the new client and their contacts
• Lack of tools or processes needed to successfully onboard the client, including workflow management solutions to govern the process
• Inefficient discovery tools or asset onboarding processes
• Use of manual processes where automation isn’t available
• Additional workload peaks caused by hyper growth

Make sure you interview support agents timely to uncover these issues, fix them promptly, and ensure smooth customer onboarding.

KPIs around proactive IT management 

Over the last few years, increasing IT issues have added to technician stress. Lower incident rates minimize stress for MSP technicians and increase customer satisfaction, making large-scale incident resolution efforts a win-win.

Info-Tech Research Group states that 44% of business leaders believe IT doesn’t have an operational strategy that supports the business, citing a failure to be proactive as one of the reasons. When IT struggles at the operational level, businesses lose confidence in their ability to execute strategically.

MSPs with a strong focus on incident prevention and proactively addressing issues at scale offer clients the right support.

Incident prevention and problems resolved at scale

Incident avoidance involves two key aspects:

• Shift-left opportunities, where self-service allows customers to get the information they need or fix common issues immediately
• IT’s ability to be proactive and scale operations

Problems resolved at scale represent the positive impact of proactive maintenance, repairs, and equipment replacement before failure. The metric tracks the number of issues resolved before failure occurs.

This is how MSP support can excel over internal support while stabilizing support costs and taking some day-to-day pressure off frontline agents. 

To measure incident avoidance and problem resolution at scale, workflow management systems should open tickets for detected problems and automatically provide proactive resolutions. Most importantly, MSPs should regularly report incidents to clients to ensure timely communication and resolution.

KPIs to combat agent turnover

Hyper growth, an aging workforce, and quiet quitting increase the demand for qualified technical professionals, so preventing turnover is critical to MSP’s success. Technicians and frontline support agents are at the heart of the MSP business, but turnover and stress can indirectly impact client satisfaction. 

Here are some factors that affect technician satisfaction:

• Lack of toolsets to perform their jobs effectively
• Inconsistent support policies and procedures
• Highly stressful operations 
• Lack of growth opportunities
• Non-competitive salary and benefits packages

Technician job satisfaction 

Job satisfaction has been an industry bellwether metric of turnover. Conceptually, happy employees don’t leave. Happy employees also go the extra mile for the customer, providing excellent customer service and making technician job satisfaction a critical KPI.

To quickly address and resolve job satisfaction issues, conduct periodic in-depth surveys and supplement them with instant-read surveys. An emoji-based one-question poll conducted at the end of the workweek can give managers a quick overview to check with the staff on how they’re doing. 

You need at least two surveys to calculate technician job satisfaction and make them responsive enough to prevent turnover.

• Emoji-based “how was your week?” surveys provide an instant-read that tells managers when to check in.
• Longer, in-depth surveys measure satisfaction across common retention issues: stress, workload, poor management, insufficient growth opportunities, not having the right tools to do the job, etc. These provide strategic direction for longer-term improvement opportunities.

Turnover rates  

Whether natural attrition or post-pandemic demand for new staff to replace aging workers, IT is in a constant talent war. Sourcing and retaining the right talent is particularly critical for MSPs during hyper growth.

Turnover rates in customer service significantly impact the quality of customer interactions. High turnover rates can lead to a higher proportion of inexperienced agents. Additionally, the loss of mentoring and guidance from experienced staff could lead to poor service quality.

Benchmarking turnover rates against satisfaction survey scores 

To reduce turnover, MSPs should know the satisfaction rates needed to retain staff. This can be achieved by benchmarking turnover rates against satisfaction survey scores and acting when scores start to dip. 

These actions can include team meetings to gather feedback on tools, management, working conditions, pain points, and things people love about their jobs. Track each initiative to uncover opportunities for improvement through regular communication and action plans.

Source: ResearchGate

This graphic shows the tipping point where lowered satisfaction and increased turnover meet. It's what organizations should look for and know to avoid turnover. For this organization, satisfaction scores of 9 or better are needed.

It's important to identify factors that affect technicians' day-to-day work.

• Ask for general feedback to understand what they like or don’t about the job
• Understand the tools they use and whether they're helpful or making the work more complicated
• Ensure client onboarding processes don’t hinder daily operations
• Ask about improvements technicians would like to see with the job
• Seek recommendations to improve the support process

Also, consider the positive impact of internal promotions. Providing different roles and technical support tiers encourages enough growth to retain people for longer. You can also give support agents additional projects to work on, like building knowledge bases or helping develop automated self-service tools.

MSP KPIs are key to successful operations during hyper growth 

Several factors influence how successfully MSPs operate during hyper growth. Along with a good metrics program, the technology used to support clients and measure results is critical. This impacts your onboarding new customers, understanding and maintaining their environment, retaining agents, and reporting on MSP successes. 

When selecting technology, MSPs should gather key team members and look for features such as:

• Customer service management functionality to manage the contracting phase and collect client contact and support information
• Strong discovery and asset management capabilities to discover assets within the client’s environment, detect when unauthorized assets try to connect with their network, and when new, authorized devices are added
• Patch management features with policies to detect devices that are missing patches or otherwise not complying with device standards
• Security vulnerability management capabilities to scan the environment for known vulnerabilities and anomalies that need attention
• Artificial intelligence and predictive capabilities to perform automated fixes for known issues and provide a device health score for opening and assigning tickets automatically to support proactive device repair
• Remote monitoring and management features to provide IT alerts and assist with attended issue resolution
• Agent dashboards to help technicians determine the work to be done and manage exceptions

Once agents are armed, use the MSP KPIs to provide a dashboard view of their performance and results.

As an MSP, you need more than just due diligence to drive customer satisfaction and employee retention. Learn how you can future-proof your MSP in seven simple ways and prepare to better meet the emerging challenges.