When forming a new company, every business owner envisions that company growing, becoming successful, and sticking around for years to come. But having a vision and seeing it come to life are two different stories.
There are so many variables that go into growing a business and there’s no foolproof, 100% guaranteed formula for success. However, there are best practices to follow that at least ensure you’re walking down the right path.
And that’s where this book comes in. The original founders of BrightGauge had experience growing and scaling their own MSP. As BrightGauge has continued to grow over the years, we’ve taken what was learned at the MSP, refined it, and applied it, leading to business decisions that have resulted in positive outcomes over and over again.
There are few things we love more than seeing our peers flourish, so we’re happy to share our learnings with you.
Our hope is that you keep this book handy and turn to it anytime you need a little guidance, advice, or even a real-world example or two.
For even more resources, please visit www.brightgauge.com/resources.
Cheers to your success!
Owning or managing an MSP is no easy task. Most of us got into this industry because we have a passion for technology and for helping our clients get more out of their day-to-day, but that all comes with some growing pains.
There are the common challenges faced by all business owners: raising capital to hit the ground running, finding and retaining good employees, managing overhead costs and cash flow, deciding on the right way to market their product or service, and keeping everything running productively.
Then there are challenges specific to MSPs: achieving operational efficiency, providing the very latest in data security measures, and keeping you and your clients up to date with new technologies (hello, the cloud).
Every business uses a different approach when combating these obstacles to growth, but the common underlying theme is that data plays a major role.
Knowing the right data to track, how to access that data, and how to measure your metrics properly can mean the difference between growing or remaining stagnant.
In the chapters that follow, we’ll dive deep into the importance of data and key performance indicators (KPIs), and how you can ensure that you’re choosing KPIs that matter to your specific business.
We’ll also give you a foolproof way to organize your contracts by providing an editable MSA template you can follow every time you sign on a new customer. Using a standard template is both a time-saver and a practice in efficiency.
Next up, we’ll talk about why it’s important to be transparent with your clients, and how a client relationship built on trust can lead to years of quality, repeat business. How can you go about building these trusting relationships? We’ll tell you what’s worked for us.
Finally, we’ll take a look at internal teams and processes. Building a solid, loyal workforce takes time and effort, but the benefits of having good processes in place can be felt in all corners of your business. We’ll share our favorite ways to keep employees motivated and accountable, so you can focus your time on what matters.
Feel free to jump to the section that interests you the most. While everything we cover will be valuable to you, it does not necessarily need to be read in chronological order, so our hope is that you’ll get into the habit of referencing what you need, when you need it.
Let’s get started.
A question we often hear from MSPs is, “What metrics should I be tracking on a regular basis?”
There is no simple answer. Knowing what data to use really depends on what your clients want to see, what is most important to your bottom line, and what type of data is going to move the needle for your business.
There are a multitude of KPIs that can influence and drive the various teams in your business operations. Nailing down the metrics and KPIs that are most important to you is just the first step towards running a data-driven business.
But why is it important to be data-driven anyway?
As a business owner, you are responsible for making both short term decisions and developing long-term growth strategies. Seeing the who, what, when, and where of your daily operations can help you answer the all important “why” you are managing your business the way you are, and can help your clients make better decisions as well.
Savvy companies are using data to increase productivity. A recent study conducted by MIT, using information curated from more than 150 large companies, suggests that data-driven decisions account for an impactful increase in overall productivity. The study concludes that collecting and analyzing data and implementing those findings is key to long-term competitiveness and growth.
Using your data in real-time allows you to create a historic narrative and identify trends, and helps you make time-sensitive and effective decisions based upon what’s happening right now.
For example, real-time information about response times, help desk requests, tickets closed per day, billable time, and tickets by clients helps you manage your staff and resources to provide the best possible solutions.
It’s been said that “what’s measured is what gets done”, so companies who use data to make both operational and performance decisions have an advantage when it comes to growth. When your team clearly identifies a problem, based upon operational or performance metrics, and then develops and implements a solution, the outcome is bound to be more effective.
Without a comprehensive plan or process for tracking and analyzing your data, you are essentially flying blind.
It starts with knowing where to look for your data. A word of caution: data is everywhere. It’s easy to fall prey to analysis paralysis. When it comes to data, more is not always better, so be careful not to compile data just for data’s sake.
The key to creating a good data analysis process is to identify both your most relevant metrics and the questions you need answered in order to ensure your success.
But first, take a look at all your datasources and information streams. You should be able to identify patterns that help you create a general framework about your business model. Take note of information, numbers, or statistics that repeatedly come up in the tools you’re using. Then, collaborate with key team members about what these observations mean for your business growth and development.
If you’re having trouble identifying the right datasources and business tools, worker efficiency and customer satisfaction can be good starting points. Every business’s data mining plan also includes financial analysis and productivity trends, including cash flow and profitability. Ultimately, you’ll also need to focus on internal performance measures, which speak to your internal procedures as well as operational data.
Exploring the context and implications of your data will help you navigate your data stream with more focus and discipline, which will motivate you to stick with an ongoing data process.
As an example, let’s say you are using a PSA tool to see your service desk’s ticket statistics and you become concerned about a high number of untouched tickets, or a less-than-desirable average response time. Seeing this data can indicate that it may be time to look at your systems in place and resources leveraged to assess whether a more effective framework for decision-making is needed.
This type of data vigilance, so to speak, can also point you in the right direction of the questions to ask about your business. As part of your bottom line, it may be really important that your business is recognized for its superior customer support. Using the example above, your metrics may show you that you should be asking, “Do my numbers reflect an up-to-par support team? Should our support processes be revisited?”.
Since data is neutral, a data analysis process gets everyone on your team speaking the same language. By creating a corporate culture based on metrics, benchmarks, and analysis, your decisions will continuously be backed by the numbers versus being driven by emotions.
First thing’s first: identify the areas of the business that are most important to you. If, for example, you do not have a robust sales department, don’t spend a whole lot of time collecting sales data that ultimately will not be used.
Once you know the business areas that matter to you, determine which metrics paint the best, most clear picture, and start setting those KPIs.
We’ve developed the IDEAS framework to help make sense of the KPI process.
Let’s take a look at 70+ metrics (and accompanying formulas where applicable) that we have found to be important to most MSPs in the industry. They are broken down by area of operation. These KPIs will help each of your individual teams be aligned, focused, productive, and efficient.
Keeping track of your cash flow will help you to stay out of financial trouble.
Another way of looking at cash on hand, months of cash goes a step further by letting you know how long that cash will last you.
Monitoring your receivables will allow you to see how much money is awaiting customer payment, which tells you how much money should be coming in during the next 30 days, and also alerts you as to which clients are not paying on time.
A no-brainer due to the popularity of the P&L statement, tracking your profit will enable you to see how well your business has performed and create a baseline for future data. Keep in mind that this isn’t a real-time metric and only provides a look at the past performance of your business.
How to calculate this metric:
Profit = Revenue - COGS
Tracking unpaid invoices allows you to quickly and easily identify which client’s services need to paused or canceled.
Your operating costs will provide insight into both how much revenue you need to bring in and whether you are operating with too little margins.
How to calculate this metric: Sum all of your indirect costs (fixed and variable costs).
Breaking overhead down a little, your labor costs will help to identify whether you are hiring more personnel than you need or can afford.
How to calculate this metric: Sum all of the expenses associated with hiring and retaining an employee
The Debt/Asset Ratio provides information on your business’s financial leverage.
How to calculate this metric:
(Current Liabilities + Long-term Debt)/(Current Assets + Net Fixed Assets) = Debt-to-Asset Ratio
Utilization measures how productively your employees are using their hours and helps you identify if you could be operating more efficiently or if you need to cut/add resources.
How to calculate this metric:
Utilization Rate = Hours on Client Work/Total Hours Worked
Quite important for small to medium sized MSPs, client concentration is a powerful measurement that identifies the percent of profit that each client is responsible for.
How to calculate this metric:
Client Concentration = (Revenue by Account/Total Revenue) x 100
Breaking down revenue by category will allow you to identify whether you need to diversify your sources of revenue or not.
Services are a great business, but if you’re not monitoring your profit margin you could be making a big mistake! This allows you to ensure your business is performing as efficiently and successfully as possible.
How to calculate this metric:
Gross Profit Margin = (Revenue - Cost of Goods Sold)/Revenue
Similar to service gross margin, this metric allows you to ensure your business is operating at peak efficiency and profitability.
How to calculate this metric:
Service Team W2 Ratio = Services Revenue/W2 Expense Of Services Team
Standing for earnings before interest, taxes, depreciation, and amortization, EBITDA margin is a measure of your company’s profitability and financial health.
How to calculate this metric:
EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization)/Revenue
Monitoring the number of total customers will give you a quick look at your MSPs health by allowing you to check for growth or loss.
Customer lifetime value will help you know when to look at raising your rates and how and when you should look to increase your total customers.
How to calculate this metric:
Customer Lifetime Value = Revenue from Customer - Cost of Acquisition
Your sales expenses as a percentage of revenue will help to identify how efficient your sales and marketing processes are and when to allocate more or less funds to sales and/or marketing.
How to calculate this metric:
Expense Ratio = (Operating Expense/Net Sales) x 100
Revenue per end user supported will show you which contracts are paying you the most (or least) and in turn will help to establish whether or not you are bringing in enough revenue per client.
How to calculate this metric:
Revenue per end user = Total Revenue/Number of Customers
Cost per end user is similar to revenue per end user, but this version calculates how much each user costs your business.
How to calculate this metric:
Cost per end user = Total Expenses/Number of Customers
Tracking your effective hourly rate helps to establish how profitable your contracts are and which clients you may need to charge more or nix from your business list.
How to calculate this metric:
Effective Hourly Rate = Total cost of contract/total hours worked on this contract
Return on investment has its limitations, but in general it’s a very powerful way to calculate whether a particular choice is worth pursuing.
How to calculate this metric:
ROI = (Gain from Investment - Cost of Investment)/Cost of Investment
Monitoring this metric will help you assess whether your company is financially healthy.
How to calculate this metric:
Gross Profit Margin = (Revenue - Cost of Goods Sold)/Revenue
Similar to gross profit margin, your net profit margin will help you identify whether your company is financially healthy and if your business model is viable.
How to calculate this metric:
Net Profit Margin = Net Profit/Total Revenues
Sales growth is one of the easiest ways to check if your business is growing, making it a popular metric for businesses to track.
How to calculate this metric:
Sales Growth = [(Current period’s total sales - Previous period’s total sales)/Previous period’s total sales] x 100
Tracking your sales opportunities will allow you to predict the number of new customers that will come in and ensure that you’ve got enough potential customers for your sales reps to reach out to.
Your quote to close ratio is the average number of quotes that are sent before one is closed. It will help you identify potential issues with your quote, whether that’s price, timing, or some other factor.
How to calculate this metric:
Quote to Close ratio = (Number of Quotes sent to Qualified Prospects/Prospects who Converted) x 100
Looking at the age of each opportunity will allow you to recognize patterns for identifying when the ideal time to prioritize an opportunity is, increasing your close rate.
How to calculate this metric: Look at the number of days an opportunity spent in a specific stage.
Monitoring the response time of your sales reps will help you to ensure your sales cadence is being followed and doesn’t need to be changed or improved upon.
Tracking the number of dollars in the pipeline can help you predict how much revenue will come in the next month.
How to calculate this metric: Determine the value of each qualified opportunity. Total Pipeline Dollars is the aggregate value of all your qualified opportunities.
While often considered a vanity metric, your website visitors can provide great value. For example, when combined with your average conversion rate you can use it to predict how many leads will be generated in the coming months.
Your bounce rate will let you know if the people visiting your site are finding what they were looking for or if they are getting frustrated and exiting your site. This is particularly important for SEO and PPC ads.
The number of leads coming from your website will help to see its effectiveness in driving new customers to your MSP.
Many MSPs have now begun to blog in order to offer increased value to their clients and to help capture new leads. Monitoring the number of people who visit your blog will help you see the worth of this channel.
If you send an email newsletter to your customers and/or a subscriber list, you can identify how much value it’s providing your company by analyzing how many people are viewing and clicking on your emails.
Having a presence on social media is necessary today, and it’s crucial for a business to monitor their engagement on social media by tracking social media mentions.
Monitoring market growth rate will allow you to predict whether there will be more customers for you to pursue or whether the market has reached its peak and it’s time to pivot towards a new customer base.
How to calculate this metric:
Market Growth Rate = [(Current Market Size - Previous Market Size)/Previous Market Size] x 100
Tracking your market share is another metric that will help to let you know when it’s time to move towards a new customer base or to keep pursuing customers in your current market.
How to calculate this metric:
Market Share = (Your Total Sales or Revenues/Industry’s Total Sales) x 100
The measure of the value of your brand (not the company’s equity) is difficult to track but necessary for successful decision making. Imagine if the Ford Mustang was changed to be the Ford Fastback! The car’s sales would likely plummet. Track your brand equity to help drive brand growth and make better decisions.
How to calculate this metric: There is no simple formula to calculate your brand equity as it involves a number of quantitative and qualitative factors, including brand perception and awareness, cost to establish or replace your brand, brand reach, and more.
Cost per lead helps you to establish which platforms are viable and whether you need to be charging your customers more for your services.
How to calculate this metric:
Cost Per Lead = Total Marketing Spend/Total New Leads
Knowing your company’s conversion rate will help you determine if a marketing channel or sales cadence is worth continuing or needs to be improved upon.
How to calculate this metric:
Conversion Rate = (Total Sales/Number of Leads) x 100
Measuring the change in your company’s followers will help identify if the content on your social media platforms is resonating with your customer base.
How to calculate this metric:
Audience Growth Rate = [(Current Audience Size - Previous Audience Size)/Previous Audience Size] x 100
Average engagement rate is a way to track how effective different messages and platforms are at reaching your audience. Engagements are considered likes, comments, shares, retweets, etc.
How to calculate this metric:
Average Engagement Rate = (Total Engagements/Total Followers) / Total Number of Posts
Monitoring the number of customers you’ve acquired will help you identify whether your sales and marketing teams are performing at the necessary levels.
How to calculate this metric:
Acquisition Rate = (New Customers in a Given Period/Number of Customers You at Start of Period) x 100
The number of people and their followers who will potentially see your post allows you to establish whether there is enough of an audience on a channel to be viable for marketing.
Technician utilization is an often overlooked metric, but it can directly contribute to your business’s bottom line! Monitoring it will help to ensure that your service team is operating as efficiently as possible.
How to calculate this metric:
Utilization Rate = (Number of Billable Hours/Number of Total Hours Worked) x 100
Complying with your service level agreements (SLAs) is incredibly important for MSPs, and there’s no way to ensure you are doing so without measuring your SLA adherence. One way you can calculate this is to measure the number of incidents resolved within the contracted time set forth in an SLA.
How to calculate this metric:
% of Incidents Resolved Within SLA = (Total number of incidents resolved within SLA/Total number of incidents)
Customer Satisfaction (also abbreviated as CSAT) is a measure of how satisfied a customer was with their experience. Monitoring CSAT scores will let you identify how happy your service team is leaving your customers.
How to calculate this metric:
Customer Satisfaction = (Number of Satisfied Customers/Total Satisfaction Survey Responses) x 100
Monitoring this metric will provide a quick look at what’s coming in and help you identify spikes in real time.
Looking at your tickets closed today will give you an idea of whether your team is ahead or falling behind in real time.
Assigned tickets by technician will allow you to identify which technicians are your top performers and who could use a little coaching/training.
Tickets that are in progress will allow you to see if your technicians are falling behind or keeping up with their tickets.
Tracking the number of resolved tickets will allow you to see if your team is performing at the necessary levels to provide good customer service.
Many MSPs triage their tickets and assign them to technicians based on severity and topic. If your tickets are not being assigned fast enough you may need to consider changing your triage process.
Another great metric to track is the number of tickets in which a customer has responded but hasn’t yet received a response from your team. This allows you to identify whether your team is responding fast enough to tickets.
Tracking the number of tickets that are waiting for a customer to reply will allow you to identify a potential issue before it happens. You may need to follow up more often or explore different methods of communication with your customer.
This metric will help you to ensure you are not falling behind on your ticket load.
If you’re familiar with the Pareto Principle, you’ll know that 20% of your clients will account for 80% of your tickets. Monitoring tickets open by client will allow you to identify those clients and either charge them more, notify them so they can better train their employees, or fire them as a client.
By monitoring your tickets open by type, you can identify which category of tickets are responsible for the most open tickets and which take the longest to resolve.
Sometimes a ticket goes without an update for an extended period of time. Normally, these tickets are lost, but by monitoring your number of stale tickets you can ensure all tickets are being followed up on in a timely manner.
Helps you monitor whether you are hitting your SLAs or not.
How to calculate this metric:
Average Time to Acknowledgement = (Total Time to Acknowledgement/Total Tickets) x 100
Responsiveness is one of the key factors in determining whether a customer churns or becomes a promoter of your business. Tracking your average time to response will help you monitor and improve your responsiveness.
How to calculate this metric:
Average Time to Response = (Total Response Time/Total Tickets) x 100
This is another metric to help track whether you’re reaching your SLAs.
How to calculate this metric:
Average Time to Resolution Plan = (Total Time to Resolution Plan/Total Tickets) x 100
Yet another metric for monitoring SLAs.
How to calculate this metric:
Average Time to Resolution = (Total Time to Resolution/Total Tickets) x 100
Tracking the amount of tickets that have been opened and closed in the last 2 weeks will help you identify short term trends and see if your team is handling the number of tickets or is falling behind.
By using leaderboards to identify the reps who are closing the most support tickets, you can help to provide a little healthy competition between your team members.
Identifying whether your team is closing more tickets than are being opened is crucial to ensuring you don’t fall behind.
How to calculate this metric:
Kill Rate = (Tickets Closed/Tickets Open) x 100
Your service backlog will help your management team predict resource needs.
Understanding how your customers feel about your company, product, and service is crucial for identifying churn risks and areas where you can improve your business.
How to calculate this metric:
Customer Satisfaction = (Number of Satisfied Customers/Total Satisfaction Survey Responses) x 100
A server or workstation that is outdated will result in a higher ticket volume than machines which are up to date on patches, and that’s just one reason to monitor patch status! Security is an even bigger reason to stay up to date with patches.
If you let your team wait before inputting their hours, they will forget or enter incorrect hours. Monitoring the hours they’ve entered and sending a daily report will help decrease forgotten hours.
Identifying your problem customers will help to identify which ones may need additional training or an increase in cost.
Tracking the number of tickets by medium will allow you to gain insight into your client’s most popular ways of reaching out for help and even which mediums are resulting in the longest wait times.
How many times did the customer have to exchange information in order to resolve the issue? A one touchpoint resolution is a very powerful and effective way to increase customer satisfaction, and you can’t improve without first monitoring the number of touchpoints.
Similar to CSAT, NPS allows you to gauge how happy customers are with your service while also putting satisfaction in a measure that more closely shows its value. It is usually the result of asking customers how likely they are to recommend your product or service.
How to calculate this metric:
NPS = Percentage of Promoters - Percentage of Detractors
Similarly to the Net Promoter Score (NPS), the Net Customer Satisfaction (Net CSAT) score is a measure which determines your true, net customer satisfaction level.
How to calculate this metric:
Net CSAT = Percent Positive Reactions - Percent Negative Reactions
If you’ve got a knowledge base, forum or some other form of self-help option on your website, it’s important to track how long it takes a client to solve their issue without contacting your team. This will help you identify areas where you can make the self-help options more helpful.
A powerful, but often overlooked metric, Revenue per Employee allows you to gauge how efficiently your company is using its employees.
How to calculate this metric:
Revenue per Employee = Total Revenue/Number of Employees
Monitoring your employee churn rate can help you make better hiring decisions and highlight areas where you can improve your company’s culture.
How to calculate this metric:
First, get your Average Number of Employees: [Active Employees at Beginning of Period + Active Employees at End of Period/2]
Churn Rate = (Employees Who Left During Period/Average Number of Employees) x 100
Employee Satisfaction helps you understand how happy your employees are and by doing so will allow you to identify any potential problems. A good way to do this is through regular surveys and evaluations.
Measuring employee engagement will allow you to identify how much effort your employees are willing to put towards the job and it’s responsibilities. Again, this can be measured through surveys and evaluations.
Now that you’ve decided upon a data analysis process and you’ve chosen the right KPIs for your particular business, how do you go about tracking those KPIs?
All the data in the world is worthless if you and your management staff cannot read, interpret, or analyze the data or implement solutions or alternatives.
Most of the datasources you’re using have existing functionality that allows you to see your data points. However, that usually means logging in and out of multiple accounts or toggling between windows to get all the info you need.
Or worse, it may mean hours upon tedious hours of inputting your metrics into an Excel spreadsheet, creating complicated pivot tables, and generating some sort of report that makes some semblance of your numbers.
A simple business hack is to use a software like BrightGauge, which automates data insights for you.
BrightGauge makes it really easy to stay on top of your data because all you have to do is glance at a dashboard and see the metrics you’re looking for.
Once you’ve got your data on your dashboards, it’s important to keep your team in the loop. Give them visibility into these dashboards by displaying them on TVs around your office or scheduling short, regular meetings to go over operational metrics.
Getting everyone together to dig deep into data, analyze root causes of a problem, or identify historical trends can really help streamline your processes and make everybody work more productively.
At the end of the day, putting in the effort to identify your KPIs and implement a way to visualize that data can have a profound impact on your business growth, which makes data a priceless investment.
When you first start running your business, there’s nothing like the thrill of signing on a new client. That tells you that you’re onto something, and that your product or service is valuable.
But before you put pen to paper, make sure you have an established process for organizing your contracts. Why?
Being organized makes life easier. If you’re using a streamlined process for each and every one of your clients, then you don’t have to run around trying to remember what you did for Client X that was different than Client Y.
Plus, you’ll be able to get your contracts out faster, which means you’ll be able to get to work more quickly, which means money in the bank for you!
Of course, special circumstances arise where you need to take a client’s unique needs into account, but if you’re starting from the same point each time, business will be easier to manage.
What we’re getting at is that you should standardize your contracting process.
It’s hard to know what exactly to cover in the fine print. We’ve been in your shoes.
BrightGauge was initially founded by former MSP owners who worked hard to craft an agreement that summarized the responsibilities of both parties, and outlined the services that would be provided. They also wanted to use their contract as a means of helping their MSP reach its full growth potential by remaining efficient.
In the pages that follow, we’ll introduce a template based on the exact contract used at that MSP. You’ll be able to “plug and play” - aka, take the template, add in your logo, company name, and client’s name and change any details as it relates to your business.
Again, this Managed Services Agreement (MSA) template is meant to streamline your process and get your contracts signed more quickly.
Before we jump into the MSA, let’s take a look at 5 reasons this contract works well for any managed services business.
Managed services is a business focused on monthly recurring revenue (MRR) and in order to do it right, it takes a long-term commitment. At our former MSP, we would explain to prospects that a 3-year deal was necessary (required) because, as we explained, “it takes 6 months to get our arms around your network, 12 months to clean it up and optimize it, then 18 months to enjoy the fruits of our labor.”
However, every so often we would have a prospect who didn’t want to sign a long-term agreement. And since we didn’t want to waiver from the 3-year contract, we had to turn down good business because of a legal technicality.
To help avoid the issue, we introduced a clause that they could cancel their contract with a 6-month notice. It gave the customer reassurance that they weren’t locked in forever, and gave us confidence that if we did our job right, we were going to have them around for 3 years.
NOTE: If you have a customer who balks at the 6-month clause, then change it to 3 months. The reality is that clients would need some time to find a new service provider and make the transition. You never know when you’ll have a chance to earn their business again in the future, so don’t burn bridges over the termination clause.
You’ll see in the Term & Termination section that each of our agreements would automatically renew for an additional one-year period on the anniversary of the Effective Date.
Instead of setting our terms based on user or device count, we loop everything into one fee, which customers love because they only have one set amount to worry about each month. In the notes, we would say, “fees up to X servers, X users, and X locations.” The number would account for a small buffer of growth room, but offer flexibility for us if the client experienced exponential growth.
Over a 3-year period of your contract, your expenses will rise, whether that’s due to inflation, salary increases, or other operating costs. So in each of our contracts, we include a note that “fees are subject to an increase of up to X% per year.” We typically start this rate at 5%, but that gives us negotiation room to actually end at a 3% annual increase on each agreement.
BONUS: As you start building your MRR, this 3% increase is a huge deal - it can easily cover your team’s salary increases!
NOTE: From our experience, less than 10% of our clients even question the annual increase, so give it a shot and you’ll see how easy it is!
Make it easy for people to sign up! Your contract shouldn’t be filled with legal jargon that people can’t understand because those are just hurdles. Instead, make your contract a marketing document: your terms and conditions should easily spell out what is included and covered in the agreement.
TIP: Make sure you specifically explain the value that the client will get, and not the techie speeds and feeds that don’t mean anything to most of the people responsible for signing the contract.
IMPORTANT NOTE: On the pages that follow, you’ll see an agreement template that is based on the exact version used in our former MSP. Please make sure to update with your pertinent details and to always consult with a professional attorney.
Are you familiar with the Pareto Principle, or the 80/20 Rule? It’s basically the idea that 80% of your sales come from 20% of your customers.
With that in mind, it’s easy to see the value in putting more effort into retaining your current client base than in obtaining new clients (note that we said MORE effort, not ALL effort).
Long-term client relationships are so essential for a business’s growth and development. How do you work towards nurturing those relationships?
In our experience, it comes down to 2 key ingredients:
When you prove yourself to be trustworthy and reliable, a client is more likely to stick around and be willing to pay you for your services. The alternative is them wasting time and resources looking for another provider. Your goal should be to never give a client a reason to wonder why they are paying you. Instead, they should see so much value in you that they’re willing to pay you even more for your services.
A surefire way to establish a foundation of trust is to always make it a point to be transparent with your clients. Share everything with them. The good, the bad, the ugly. When you take assumptions out of an equation, you make room for credibility.
Transparency shows that you’re doing what you say you’re going to do. It shows you’re delivering on that contract (or Managed Services Agreement or Service Level Agreement) that you’ve put into place. Being direct and honest ensures that expectations are properly set.
Over time, it’s easier to “take your word for it” because you’ve proven yourself by being consistently transparent, and so trust in you becomes second nature. It’s a beautiful circle.
So what’s a good way to be transparent and show that you’re trustworthy? In our opinion, it doesn’t get much more powerful than sending consistent client reports.
Client reporting is the key to showing your clients that your services are valuable. Since reports are based on hard data and facts, they eliminate any presumption of “smoke and mirrors”. What your client sees is the true picture.
Client reporting also acts as an itemized receipt of your work. Instead of just saying “we never miss a deadline” or “we got this done”, a report will actually visually break down what’s been going on. Once an MSA is signed, your client doesn’t have much visibility into your day-to-day, but reports help change that in a valuable manner.
Reports also do a lot to show a client how you’re helping them. Certain actions you take and the data that is generated based off of those actions will help your clients meet their KPIs, maybe much more quickly or efficiently than if they had been on their own. Your willingness to act in their best interest will establish you as a valuable partner, not just another service provider.
We’ve already mentioned how repeat business can be wonderful for an organization. Let’s put that into context. If you’re earning one’s business time and time again (which client reporting can help you do), that means you’re lowering your churn and increasing growth. Reducing churn by even 1% over the course of 5 years can add as much as $500,000 to your profitability.
By the way, it should be noted that reports are not just useful in a client-provider setting. Your team members and executives can benefit from status updates. Sending internal reports is an awesome way to keep your team on the same page, accountable, and productive.
It’s plain to see why client reports matter. Let’s get into the ins and outs of creating reports and sending them out.
When sharing executive reports with your clients, who on the client side should receive those reports? The simple answer here is to send all reports to your main point of contact. This is the person you interface with on a regular basis and who is ultimately vouching for you on their end.
But there are other people you should consider as well. After all, what if your main point of contact leaves? You don’t want to miss out on an important piece of business that you’ve worked hard to nurture just because of that.
Include your point of contact’s manager - this is the person who is saying yes or no when it comes to utilizing your services. Plus, in the case that your point of contact leaves, all client-agency communication will not go out the door with them.
Depending on how big your client’s company is or how closely your point of contact and the CEO work together, you may want to consider cc’ing the big boss on your reports, too. He or she is probably the person signing your checks, so don’t neglect that.
Your clients likely only have a few minutes to spend on reviewing your reports, so you want to make sure that you’re always creating the most impact in the shortest amount of time. Be thoughtful about the metrics you’re choosing to include.
For guidance, start by turning to your MSA or SLA. In it, you and your client set forth expectations for your working relationship, and you likely even set benchmarks for success. The parameters outlined in your MSA should give you an idea of the KPIs and metrics your client cares most about.
If it’s not clear, there’s nothing wrong with being direct and asking your client what exactly she would like to see in a report. Also, once you start sending reports, pay attention to the feedback you’re getting, which can help you refine and revise.
Your client is your best resource here, but over the years, we have found that certain KPIs are common across the board:
Use your MSA as a guideline for when to send your reports out. In it, you may have specified that you’d send monthly, quarterly, and annual reports to your client. Make sure to do that, as you don’t want to breach any part of your contract.
We have found that clients love receiving a daily report, when used correctly. Especially for clients who have a lot of devices to manage, or rely on you for time-sensitive issues, it’s helpful to get a daily snapshot of important metrics.
Whether your client prefers a daily, monthly, or quarterly report, we like to recommend that you send it to them at 8:00 a.m. (client time) so it’s in their inbox when they arrive at work for the day.
When you’re this consistent with your reports, you’re reinforcing how proactive, reliable, and trustworthy you are.
You’re committed to sending reports to your clients and keeping them in the loop with the metrics they are paying you to keep track of. But how do you get them to be an active participant in the discussion about data and metrics?
Making it a point to get together a few times a year for a live, robust chat about your work and their data can really solidify that client trust and transparency you’re intent on fostering.
Organizing in-person meetings, such as Quarterly Business Reviews, can take you far.
Take the time to host Quarterly Business Reviews (QBRs), easily one of the best tools you can use when it comes to keeping your clients updated on all the work that you’re taking care of for them.
Otherwise known as Technical Business Reviews or Semi-Annual Business Reviews, QBRs serve as an excellent opportunity to touch base with clients, highlight the value of the services you provide, and create a strategic agenda moving forward.
Who should participate in QBRs?
It’s important to make sure that the right people are present in this meeting. Key stakeholders include:
If necessary, when planning the meeting you can always provide an explanation for why you would like each specific person to attend.
Your QBR isn’t the ideal time to get down into the nitty-gritty of daily operations. Instead, it’s a rare opportunity to have executives from the client side listen to what you have to say.
Take a high-level approach to discussions - focus more on strategy and results, rather than execution.
You want to come into the QBR armed with data. Show real-world returns from prevented problems (i.e., show your value). Make it a goal to deepen the trust your client has in you and further your relationship as a trusted business advisor rather than just another vendor.
The QBR is also a time to address roadblocks and obstacles that must be overcome in order to deliver ideal service. Identify areas where improvements can be made and take a big-picture approach to problem-solving. Make sure that you closely listen to client’s concerns.
In the end, both teams should align on ways to drive more value through your partnership.
Your goal during a QBR should be to provide a top-down view of operations, making sure that each discussion offers transparency and highlights the value that your MSP has provided in that specific area.
- Service ticket review
Include a comprehensive service ticket review from the past quarter that shows how your team is handling the volume of tickets coming in. It can be as simple as comparing open versus closed tickets.
- MSA/SLA review
Compare your agreement to the services that were rendered and highlight areas where you have gone above and beyond. If there have been disputes or issues, now is a great time to discuss the matter while decision-makers are present.
- Technical review
This will likely take up the bulk of your QBR. It’s an opportunity to put your value front and center while also providing insight into where improvements in processes can be made on both ends.
- Endpoint management
Clients rely on you to centrally deploy, update, and troubleshoot endpoint devices, which is why you’ll often hear MSPs saying that this is the “meat and potatoes” of their business. When done well, clients will rarely be aware of everything that goes into endpoint management, but here’s your chance to enlighten them on that value you’re providing.
- Infrastructure management
Take the time to explain why infrastructure management is a big deal for your client’s business. Cover areas such as network uptime, server backups, domain admins, and server patch status.
- Network security defense
It’s more important than ever to protect your client’s networks against viruses and other threats, so you’ll want to focus on your security efforts (maybe touch upon your GDPR compliance measures).
- Strategic planning
You have a room full of decision-makers and executives at your disposal. This is the perfect time to dive into big-picture strategy and proposals to improve the business relationship moving forward. Make sure everyone has a solid understanding of what you’re working on, what is planned for the future, and any recommendations you have.
- User-training
Show your clients that you’re invested in improving their operations and that you’re taking the time to analyze what their data means. Based on support tickets you’ve received, you may have recommendations about which of your client’s employees could benefit from additional training. This is another way to prove your value as a trusted advisor and partner.
Clients who see and truly understand your value are likely to keep you around for the long run and recommend you to their peers and are unlikely to wonder, “why am I paying you?”
QBRs require time and effort, but they are well-worth it for all parties involved. It’s your chance to bolster your reputation and show why you are an integral part of your client’s business and it also helps your clients see the power of their investment in you.
Try not to feel overwhelmed at the thought of QBRs. It just takes a little organization and planning, but once you’ve hosted your first one, the rest will be a breeze. To help you get started, please feel free to follow our template for QBRs, which our founders used at their former MSP.
IMPORTANT NOTE: This template serves as a guide. Please make sure to update with your pertinent information.
ABC Company
Quarterly Business Review
Table of Contents
The purpose of this document is to provide an overview of the State of IT for ABC Company, provide management with metrics detailing historical performance in contracted areas, and provide recommendations intended to aid in ABC’s goal of improved support and services. looks forward to a continued, productive partnership with ABC.
ABC Company, a leading provider of widgets technology and services, recently contracted , an IT Services Provider with XX years of experience in the market, to manage their Information Technology Infrastructure on an ongoing basis. The Managed IT Services (MITS) partnership between ABC and was executed on , with the official ‘go-live’ date of . The stated goals of this partnership were Refer to MITS contract:
Currently, is helping ABC Company manage and maintain:
Based on a technical review of the last two quarters, all segments of services offering have been Good. reports show improvements in the areas of endpoint management, infrastructure management, and network security.
has encountered some challenges while supporting ABC’s infrastructure. Some of the challenges and their responses are listed below:
Substandard data cabling and Network layout
ABC has recognized that the current physical cabling of the office requires remediation. has been engaged to redo the office cabling. This effort is scheduled to start on . In conjunction with the cabling project, will be deploying new Enterprise-class Network Switches in a best practice configuration.
Hardware / Application performance
Several systems are currently running o older hardware that is not on manufacturer support. This has led to delays in replacing failed parts as well as degraded performance for key applications. An upgrade leveraging Server Virtualization has been recommended to correct this issue.
Email – Web Based / Mailbox Size
The current web-based email solution does not allow for the central management of Smartphone devices. Concurrently, the size of user’s Outlook PST files had led to frequent support calls. Migrating to Microsoft Exchange Server 2016 along with the enforcement of Mailbox Quotas and Email Archiving policies has been recommended.
Recurring Power Outages
ABC’s building has experienced frequent loss of power. A migration of production systems to a secure Collocation facility has been recommended.
In reviewing Service Requests for the last 3 months, the relatively even volume of open and closed tickets show that support requests are being handled quickly.
Service Level Agreements (SLAs) are one way that measures their Support to ABC. According to the chart below, for the last 3 months:
While the Resolution time goal for Normal and Scheduled tickets is just under our target of 90%, this could be attributed to certain requests, specifically those involving the restructuring of large PST files, being more time consuming than most standard support issues.
Client Satisfaction Surveys
Upon successful resolution of a Service Request, sends out a short survey to the user, asking to rate the quality of service provided by pertaining to that specific request. For the previous 3-month period, has been averaging 87% in Client Satisfaction.
The following sections provide a technical overview of the areas contracted with . Those services are:
1) Endpoint Management
2) Infrastructure Management
3) Network Security Defense
4) Strategic Planning
For services 1-3, we will rate the state of each respective component as follows:
Excellent: Component is technically sound across all areas.
Good: Component is technically sound across most areas; some areas require attention.
Fair: Component is technically deficient across multiple areas and requires attention in the near term.
Poor: Component is deficient or in a critical state; immediate attention required.
Upon reviewing the latest reports, we rated the workstation patch management to be Excellent. Nearly all Endpoints are within the 5-patch threshold. As of this report, there were 25 Endpoints missing more than 5 patches. Those workstations missing patches are typically Endpoints that were not powered on during the last installation window and will be patched at the next available window.
The virus threat report for workstations has an Excellent rating. The report shows all endpoints fully protected with all threats in Quarantine.
The trending report for alerts has a Fair rating. The majority of the alerts for the last 3 months are related to performance alerts for the Beacon Server.
The success rate for backups have been Excellent. Since implementing Cloud Backup Solution on , there has been a 100% success rate. The following is a summary of the backup configuration.
Domain Admins Audit
The Domain Admins group is a security group in which all members are allowed administrative privileges for the entire domain including resources such as servers, workstations, and file shares. Given the breadth of access enabled by being a member of this group, it is essential to monitor and audit this group on a frequent basis.
Server Patch Status
Upon reviewing the latest reports, we noticed that the server patch management was Good. Most servers were fully patched.
Server Virus Protection
The trending report for server virus alerts has an Excellent rating. There were no reported viruses across all servers.
has been managing ABC’s Email Security utilizing McAfee SaaS. This solution filters both inbound and outbound email for Spam and Viruses. The graphic below displays the status of ABC’s email security for the past 3 months.
Current Projects Review
ABC Company is in the middle of the project. This includes . The project should be completed before the end of July.
Scheduled Projects Review
There are no projects currently scheduled.
The availability of ABC’s key systems, specifically Exchange Email, is critical to the support of their growing business. Due to recent power outages, along with again hardware and Single Points of failure at the application level, ABC has expressed an interest in investing in a secure Collocation Datacenter.
Date:
We’ve heard a lot of MSPs shy away from creating client reports or from hosting QBRs simply because they are tedious and time-consuming task. Some of our customers tell us it takes 8-10 hours a week just to generate one report.
Those are precious hours that could have been spent on revenue-generating tasks.
But there’s no need to go through the trouble of using Excel to visualize, interpret, and formulate your data into a readable report.
Instead, use an automated client report generator that provides professional, interactive reports in just a few clicks.
Regardless of the datasource you integrate with BrightGauge, your account will come pre-loaded with template reports that you can use right away. Choose your client recipients, personalize your reports, and send them on their way.
Plus, you can schedule reports to go out on a recurring basis to the clients you want on the dates and time you choose. Literally set it and forget it and rest easy that you’re doing a whole lot to win your client’s trust.
With BrightGauge dashboards and reports, it’s also simple to set yourself up for QBR success, as the data you’ll want to include is right there at your fingertips.
A huge part of business development starts within your own organization. Hiring and retaining the right people should be one of your high-priority growth strategies.
What retention practices do you have in place to incentivize your team members and keep them around for the long-term?
While fun perks like game rooms can make a workplace exciting, they are generally not the reasons an employee wants to keep working for you.
In our experience, investing in an employee’s development is a much more powerful way to secure their loyalty. Ways to do this include giving them plenty of opportunity to participate in trainings or classes, mentoring and guiding them to reach the next level in their career, and ensuring they have full visibility into the company.
Teaching your team members skills and values that they can carry with them throughout their career is also a compelling driver of motivation.
One such skill is learning to be accountable. Few things are less appealing than an employee who refuses to play their part or acknowledge how their actions affect the big picture. Accountability is key in keeping individuals focused and aligned, and it comes from the top down.
How can you go about instilling an accountable nature in your workforce? Try establishing a goal-setting system.
Without a goal-setting system in place, there’s no true objective or target to work towards. Sure, you can still be successful and get plenty done, but it would be hard to know exactly why you’re doing what you’re doing. Plus, no one would be on the same page.
With a goal-setting system that’s consistently followed, everyone in the organization remains aligned and sharply focused.
Goals should inspire and create healthy competition among your teams while driving the business forward. They should push everyone to strive for more.
What’s more, a goal-setting system encourages team members to be collaborative, which plays an important role in your company’s culture.
When it comes to how goals and accountability are linked, it’s a beautiful circle. Goal-setting drives accountability and accountability makes it more likely that a goal will be met.
In a 2007 study from the Psychology Department of the Dominican University of California, Professor Gail Matthews examined the effectiveness of accountability, commitment, and writing down goals.
Participants were asked to set goals and then were put into one of 5 groups, all with varying levels of commitment and accountability. At the far ends of the spectrum, Group 1 was asked to just think about their goal but not write them down, while Group 5 was asked to write the goal down, formulate action commitments, and send a friend a weekly progress report.
Unsurprisingly, the participants in Group 5 performed better than all other groups by a wide margin. Being tasked with having to put out a progress report (aka being accountable) seemed to make them more likely to stick to and achieve their goals.
By making it a priority to establish a work culture built on accountability, you’re investing in your staff and in the overall effectiveness of your organization.
How do you go about setting the right goals for your business?
Goals are proven to keep established companies moving on the right track. So why are so many organizations skipping out on this?
It’s probably because it can feel a little daunting to know how to set the right goals and how to track them. But, with a little guidance and practice, it can come to feel like second nature.
It’s important to remember that goals should measure success, improve direction, and focus one’s attention. With that in mind, let’s dive in a little deeper.
Goals are meant to set a high bar and should be challenging. We’re supposed to always strive for more. The key is finding a balance between a goal that’s always reachable and one that requires you to stretch. After all, if we’re completing 100% of our goals, 100% of the time, is growth even happening?
The key is to strike a balance between goals that are lofty, yet still achievable.
One of the most well-known methods for setting goals is the SMART system. It lays some ground rules for setting effective goals for organizations, teams, or individuals. SMART is an acronym, which stands for:
Here’s a very simple example of a SMART, inspiring goal. Rather than having a sales tech say, “I want to close more accounts next quarter,” a SMART goal will be something like, “by the end of next quarter, I want to bring in 10 new accounts that will result in a higher commission for myself and will contribute to the overall revenue goals of our company; I’ll do this by increasing the amount of calls I make each week from 100 to 150.”
Aim for 3 challenging goals per individual per quarter, always tied to overall company KPIs. And collaborate with those individuals on setting these goals - that way, everyone feels like their input matters and they’re all in it to win it.
We mentioned that it’s important to set a firm completion date for your goal. This should be a reasonable due date, yet still require a high effort. Keep these things in mind:
Due dates chosen should encourage your team members to be productive and efficient, but not make them feel so overwhelmed that they are discouraged from making a worthwhile attempt.
Ask yourself how long this goal would normally take to complete. It’s important to understand the increased effort that will be required when you set tighter deadlines for tasks. Use your current expectations to come to an achievable timeframe.
Also ask yourself if this increased goal focus will lead to poor performance in other areas. Setting difficult goals is important, but definitely not if your team’s overall performance is going to suffer as a result.
If you set a goal to secure appointments with 10 prospects, there’s a big difference between reaching that goal in a month versus a year. By tying your goals to specific timeframes, you set the tone and the window for goal completion.
You want to make sure that everyone in your organization has a personal stake in completing goals. If goals are more team-oriented than individually-oriented, the best choice is usually to assign the team manager as the owner. The important thing is to make sure to assign goal oversight to someone, so things don’t fall through the cracks (accountability, remember?).
As you’re deciding who will own a goal, make sure you speak with that person about the achievability of it. A reasonable goal to one person may be unrealistic for another, based on timeframe, their other duties, lack of resources, or other reasons. Work together to agree on the right workload.
The idea is to give the owner something to strive for, without forcing them to commit to something that will hinder their work in other areas. Giving a person too many goals to be responsible for, or connecting them to unrealistic standards, can completely undo any of the benefits that you hope to achieve through goal-setting. You could end up producing a net negative for the company.
Always ensure the following:
Establishing your goal-setting process is just the first step in creating a culture of accountability. If you’re not checking on employee progress on a regular basis, you’re missing a key step and negating any long-term growth.
Keeping track of team progress holds everyone to well-defined standards. And it’s worth pointing out that everyone at every level of the organization should be in the habit of checking in on goals. Change and implementation happen from the top down!
Make sure you check in with teams and individuals on their progress several times before the end of the goal completion period. The exact frequency of check-ins will vary and you can always tailor your timing until you figure out what works best for you and your team. Our recommendation is to have a weekly check-in.
Whether this is accomplished through one-on-one or team meetings, or through written progress reports, the important thing here is to get started and make it a habit.
These regular check-ins have another positive benefit: they keep things transparent between every person in the company, which we have found to be a key factor in growth and success.
Regardless of one’s progress, it’s important to boost morale by being positive about the achievements made, even if it seems like the goal may not be completed.
Which brings us to our next point.
When it comes to annual performance reviews, many managers’ first instinct is to focus on employee’s goal performance. While goal performance should be taken into consideration, it shouldn’t be directly tied to review outcomes.
It’s important to realize the purpose and place of goals within your business. Well thought out goals support the larger strategic plan and push companies in the right direction.
However - and this is the crucial takeaway here - goals should represent ideal outcomes, NOT basic expectations for the people they include.
Here are some considerations to take into account regarding goals and their place in performance reviews:
This being said, goals do have a place in performance reviews. Ultimately, the result of the goal is not as important as the job performance towards reaching that goal. Performance reviews should:
Goals should motivate teams to try really hard to reach ideal company outcomes. But by using their completion (or lack thereof) as the defining factor in reviews, you misconstrue what makes goal-setting effective for all organizations. They cease to become goals and instead become expectations. As a result, your teams will set increasingly less aspirational goals to help ensure they get positive reviews.
BrightGauge makes it easy to get a handle on data by putting KPIs on dashboards and custom reports. But it also makes it easy to establish and stick to a goal-setting system.
BrightGauge Goals is a way to give an entire organization visibility into goals and progress being made on them.
It’s like one big scorecard that everyone can interact with. Basically, an individual is assigned a goal (which can even be powered by KPIs you’re already tracking) and is asked to check-in on a weekly basis to mark whether he or she is on- or off-track.
These goal lists are visible to everyone in the company, which creates a really strong sense of transparency. It also motivates team members to be uber-productive and accountable, because everyone likes to look good in front of their peers.
If you’ve been unsure about how to go about implementing a goal-setting system, this is an easy way to get started and get buy-in from all your team members.
We’ve covered a whole lot in this handbook. Growing a business takes focus and discipline, and we hope we’ve provided some steps for getting you on the right path.
It can feel overwhelming to come up with your “plan of attack” so to speak, but consistency is key here. Implement some really good business practices, stick to them, work with people who share your vision, and you’ll be set up for success.
If you remember nothing else, keep these things in mind:
There are so many moving parts when it comes to managing or owning an MSP or other business. It’s easy to see how one can get bogged down in a bunch of different business solutions that can feel like a second full-time job to manage.
The truth is, we do need a little help making our day-to-day run optimally. The founders of BrightGauge, who previously owned an MSP, felt that and sought out a streamlined solution that fit their operational management needs. Ultimately, they decided to build that solution themselves.
BrightGauge can help you manage your data, strengthen your business relationships, and establish a goal-setting system all at once.
BrightGauge takes the datasources you’re already using - your PSA (like ConnectWise Manage), your RMM (like Continuum), your finance tool (like QuickBooks), your security solution (like Webroot), your CSAT monitoring tool (like SmileBack) - and compiles all that data in one place. That way, you don’t have to waste time logging in and out of multiple accounts or toggling between tools to get the metrics you’re looking for. You can find it all in a glance, in one dashboard, so you can get back to your work. No matter what datasource you integrate with, you’ll get default dashboards that show you your KPIs as soon as you open an account.
Based on the KPIs you’re already tracking through BrightGauge, you can create really powerful, professional client reports in a matter of minutes, so you can easily share your metrics with clients and practice that transparency we talked about. All datasources available in BrightGauge come with pre-built report templates, so you can choose to start there or start from scratch. Once created (which literally takes a few minutes), the reports can be set to automatically distribute themselves to a target list with updated data at regular intervals. The best part is that you don’t have to lift a finger to update the data in them — it’s all automatically pulled from the same sources as the dashboard view.
The proprietary goal-setting system in BrightGauge gives you a simple way to assign goals for every member of your team and have them check-in on a weekly basis. There’s really nothing better for getting all employees focused, aligned, and on the same page. Plus, the culture of accountability that is created is invaluable to your organization and to an individual’s career development.
We’re not saying that BrightGauge is a magic wand that’s going to solve all your problems for you. But when you have a handle on your data and you have a simple way to prove your value to clients, it opens up a lot of room for you to focus on revenue-generating tasks that will ultimately grow your business.
By the way, when you become a BrightGauge customer, you get the support of our awesome customer service team, there to help you with any roadblocks you encounter along the way. Most of our customers say our support services alone make BrightGauge worthwhile.
We truly want to help you grow and succeed. So let us know what we can do to make that happen.
There’s no need to take our word for it. Contact us today to see for yourself how our tool can be your partner in growth.
Emails us: sales@brightgauge.com. We’re happy to chat!
