How to Measure Company Benchmarks in Managed IT Services

By Raymond Vrabel

In my last blog, I discussed next steps and tactical tips to keep in mind now that you have made the move to managed IT services. I focused on areas of change, such as reviewing client contracts, outsourcing vs. insourcing, and of course, how to hire the right talent. Another area you may want to change is how you measure company benchmarks, specifically when it comes to techs, salespeople and help desk staff. If you think you can use the same measurement tools you were using before you implemented a managed IT services model, then you are doing yourself – and your employees and customers – a disservice.

I’ve seen many MSPs fall into this trap and think of metrics measurement in a cookie-cutter way. You need to look at the bigger picture, and not simply pack everything into one small vacuum and leave it to set.

Here are some important metrics to think about, and what changes you should be making for each as you settle into a managed IT services model.

1. Technical Staff Benchmarks. With this group, think about average revenue per user (ARPU); don’t just look at device counts. Employ a W-2 or wage multiple, which uses this basic formula: If you have four techs and each manages a set of clients, bundle all of the revenues that these clients are bringing in for each of the individual techs. Then, take each individual tech’s base salary and divide that by the overall amount of revenue that’s being brought in by that specific client group.

Basically, the number you come up with is how much each individual tech is bringing in to the company in terms of revenue. Getting these numbers down to a science shows (not tells) your techs the specific amount of individual ROI they are bringing in. This way, you can praise them if they are surpassing their benchmarks, and if they are not meeting the benchmarks, you can have a candid discussion with them to find out why, and come up with a game plan for improving their numbers.

2. Sales/Marketing Benchmarks. These benchmarks are a bit more cut and dried than what you would come up with for your technical staff. Take the number of contracts and new client acquisitions and add up how much revenue each salesperson is booking. You can also break this down a bit more granularly by examining the types of contracts and new business. Is it all straight project work? Is it cloud or managed services contracts? The new benchmark goal is to focus on selling multiple long-term contracts. While this can be more challenging to sell, in the long run, it is more profitable from a business standpoint. Also examine how many new contracts they are selling vs. how many current contracts they are upselling.

While it might at first be a bit of a challenge for salespeople to adjust to the new managed services model and benchmarks, they need to understand the value proposition and make sure they are offering the right incentives. Are they trying to make a quick sale, or are they now focusing on long-term contracts, rather than a one-time hit? Have salespeople think in terms of volume: How long is the customer’s sales cycle? Are they closing deals in three months or 10 months? How is customer satisfaction; are they happy with the current services they are receiving? It’s also important to know the customer’s purchasing cycle.

3. Help-Desk Staff Benchmarks. With help desk staff, the two most important elements are critical time to response and first-call resolution. How often does the customer’s issue get resolved with just one phone call? Don’t run your help desk like a call center, where you are counting on the quickest responses and getting as many calls out as you can. This is especially important if you have a client list that is diverse in size and vertical market. When examining help desk metrics, look at items like the size, vertical market, average handle time, length of the call and caller abandon rate. With help desk metrics, it’s more about quality control, customer service and response time, rather than call volume and speed.

Now that you’ve embraced a managed IT services model, it’s all about evolution and long-term, committed monthly revenues. Above all, put these new metrics-driven practices into play for techs, salespeople and help desk staff – and enjoy long-term stability company-wide.

Raymond Vrabel is Continuum‘s director of technical account management and participates in product and service growth initiatives. He manages Continuum’s Technical Account Management team which supports more than 3,500 partners worldwide. Vrabel has more than 15 years of experience in the IT industry, specializing in managed IT services, disaster recovery and cloud solutions.