Ten Key Managed Services Delivery Metrics to Measure

Today’s business landscape is extremely dynamic. That’s why managed services have become integral to ensuring operational efficiency and scalability. However, the success of these managed services depends heavily on how well you track and measure their performance.

Managed services delivery metrics serve as a critical tool to assess the effectiveness of service providers, enhance accountability, and align services with business objectives.

From client satisfaction to operational efficiency, understanding the key performance indicators (KPIs) that matter can provide actionable insights to drive continuous improvement and ensure long-term success.

This blog will explore the top ten managed services delivery metrics to measure.

1. Service Level Agreement (SLA) Compliance

SLAs are performance standards defined by specifying metrics that measure the quality of your services and identifying penalties that are likely to occur if a specific threshold is not reached. It is crucial for managed service providers to measure the SLA Compliance KPI. Keeping track of SLA compliance can facilitate customer satisfaction and minimize turnover by delivering expectations.

It measures to what extent your MSP meets the performance targets and service levels that are agreed upon and outlined in the SLA with your customers. Calculating compliance with SLA enables your MSP to deliver service as promised, meet contractual obligations timely, and uphold client expectations.

SLA compliance rate can be calculated by dividing the number of SLAs met by the total number of SLAs and multiplying it by 100%.

2. First Response Time

The first response time measures the time it takes your MSP to respond to a customer when they report an incident or submit a request.

First response time is a crucial KPI for the service desk. It helps MSPs understand how adequate their customer and technical support is. Calculating this KPI also supports you in evaluating the effectiveness and timeliness of your support services. It directly impacts how satisfied your customers are as they need a prompt response to their queries and a swift resolution of their issues.

This metric must also be monitored closely to gauge how the implementation of new processes and technology is affecting your response time. Your objective must be to bring down the time it takes to establish the first response.

3. Mean Time to Resolution (MTTR)

MTTR is an important metric of customer satisfaction. It measures how long it takes for your MSP to resolve an issue entirely, from the beginning till the end.

MTTR means the average time it takes to resolve an issue or an incident. It includes various stages of resolution such as the time it takes to detect the issue, diagnose it, fix it, and the time invested into preventing it from happening again.

Calculating MTTR is crucial to evaluate the efficiency of the MSP’s systems, support teams, and processes. Managed service providers may also use it to establish the cost of equipment, services, procedures, and parts. The objective is to keep the MTTR low. This indicates that issues are resolved quickly and improves customer satisfaction and retention.

4. Customer Satisfaction (CSAT) and Net Promoter Score (NPS)

Keeping your customers happy is one of the most critical aspects of a successful business. Retaining existing customers costs significantly less than getting new ones onboard consistently. Testimonials and reviews also work as an effective marketing tool.

To measure customer satisfaction, you may use NPS. It is a metric that measures your customer’s satisfaction and loyalty and identifies how likely they are to recommend your MSP to others.

NPS can provide you with valuable insights such as your brand perception. It also identifies detractors and promoters and acts as a benchmark to track customer sentiment with time. You can calculate NPS by sending your customers a survey, asking them to rate how likely they are to recommend your MSP on a scale of 0 to 10.

5. Churn Rate

Customer churn rate is the number of customers who terminate their agreement or discontinue using the services of your MSP within a given period. It is also known as turnover or attrition rate. It provides insights into the health and satisfaction of your customer base and identifies potential gaps and areas for improvement. It also enables you to develop strategies and execute them to minimize the churn rate and improve customer loyalty and retention.

A high customer churn rate can cause serious concerns for your MSP if you are looking to increase profitability. It also affects your employees’ morale negatively. To maintain consistent profitability, especially in MSPs that have a subscription-based model, keeping the customer churn rate low is crucial.

The churn rate can be calculated by dividing the number of customers lost by the total number of customers during that period, multiplied by 100%.

6. Monthly Recurring Revenue (MRR)

MRR is one of the most critical sales KPIs since it reflects the health of your MSP’s business. It is the expected revenue from each month’s recurring services. The MRR growth rate measures the rate at which your MRR increases or decreases over a certain period of time. MRR represents the monthly revenue generated through recurring contract services, subscriptions, and renewals.

Calculating the MRR growth rate allows you to track your MSP’s financial performance and its business growth. It also gives you insights into how effective your current sales and marketing strategies are. You can also improve your customer retention strategies to contribute to MRR and the overall revenue projection. Based on your MRR, you can project your revenue more accurately and make data-driven projections.

7. Gross Margin

Gross margin is a critical KPI for sales revenue. This is your managed service provider’s revenue after deducting all costs such as office lease, hardware, staff, and overhead. It is the percentage of revenue that remains once you have deducted the direct expenses involved in service delivery. It reveals the profitability of your MSP and its services.

Gross margin also helps you analyze the cost efficiency of your service and operations. Through gross margin, you can monitor the financial health of your MSP and also make adjustments in pricing models, if necessary. Knowing your gross margin is crucial since it helps you identify a balance between production and labor costs and service delivery and pricing.

8. Technician Utilization Rate

The technician utilization rate is the amount of time that your technicians spend on billable tasks or activities as compared to the total number of working hours that they are available. It is crucial to track this KPI for your MSP as it enables you to evaluate the effectiveness and efficiency of your staff utilization.

It also enables you to optimize resource allocation, identify any potential restrictions on capacity, and ensure that your technicians maximize their billable hours.

Technician productivity measures the number of tickets or tasks your technicians complete within a specific period of time. It provides insights into their workload and how they are contributing to meeting client needs and requirements and SLAs. You can calculate this by simply counting the number of tasks completed.

9. Ticket Resolution Rate

The ticket resolution rate is a customer service metric in managed service providers that measures the total number of tickets resolved as compared to the total number of tickets received over a certain time period. You can calculate the ticket resolution rate for your MSP by dividing the number of tickets resolved by the number of tickets received, multiplied by 100%.

There are several factors that affect the ticket resolution rate. These include the team structure as different teams may have different levels of expertise and access to resources, the volume of self-service content on your website that can enable your customers to resolve simple issues by themselves instead of reaching out to you, and the quality of support workflow where a poorly designed one makes it difficult to resolve tickets quickly.

10. Cost per Ticket (CPT)

The cost per ticket is a metric used to measure the average cost it takes to resolve a ticket raised by a customer. The components of CPT include technology costs, labor expenses, facilities expenses, telecommunication costs, training, office supplies, and travel. It is calculated by dividing the total monthly operating expense of a customer service department by the total number of tickets resolved in that period.

The lower the CPT for your MSP, the better. You can reduce your CPT by empowering and educating your tier 1 agents, implementing performance analytics, offer self-service resources, introduce and execute strategies to retain support staff and minimize absenteeism, leveraging external expertise and skill by outsourcing, and automating workflows and processes.

Conclusion

Measuring the right metrics is the foundation of delivering high-quality managed services. By focusing on KPIs such as service level agreements (SLAs), cost optimization, client satisfaction, and incident resolution times, you can ensure that your managed services remain efficient and aligned with business goals.

Continuous monitoring of these metrics not only improves service quality but also strengthens your ability to adapt to changing needs. Ultimately, choosing the right delivery metrics leads to better decision-making, optimized service performance, and sustainable growth for your organization.