Beyond Tickets: 10 MSP KPIs You Should Actually Track Every Week

We've all been there. It's Friday afternoon, and your PSA dashboard shows 847 tickets closed this week. The team crushed it. Then you check your bank account, and reality hits. Revenue is flat. Margins are slipping. Three technicians have casually mentioned they're "exploring other opportunities."

This gap between activity and profit is what quietly kills MSP businesses. According to Service Leadership Index Q4 2024 data, 18% of managed service providers reported operating at a loss, even while handling thousands of tickets every month. The problem isn't effort—it's measurement.

Ticket counts have become the vanity metric of our industry. They tell you something happened, but nothing about whether it was profitable, sustainable, or worth doing in the first place. If you want to build an MSP that actually thrives, you need to track the MSP KPIs that matter for profitability and growth.

These are the 10 metrics that separate MSPs struggling to make payroll from those commanding valuations at 6-14x EBITDA in the current M&A market.

Why Do Traditional Ticket Metrics Miss the Mark for MSP Profitability?

Traditional ticket metrics fail to measure what actually matters for MSP business health: profitability, efficiency, and client value. Before jumping into the metrics that drive growth, it helps to understand why default PSA dashboards lead you astray.

Traditional ticket metrics focus on volume and velocity: tickets opened, closed, average resolution time. These numbers have their place, but they create three blind spots that will hurt you.

First, they treat every ticket the same. A 15-minute password reset and a 4-hour network troubleshooting session both count as one ticket. This hides the true cost of service delivery and obscures which clients are draining your resources.

Second, they ignore revenue completely. Your PSA knows how much time your team spent, but it rarely connects that time to money earned. You could close 1,000 tickets and still lose money on a client.

Third, they encourage the wrong behavior. When teams optimize for ticket counts, they cherry-pick easy wins and push off complex issues. When they optimize for resolution time, they rush through problems without fixing root causes. Neither approach builds lasting profitability.

MSPs achieving 18-20% profit margins have moved past these activity metrics. According to Service Leadership data, only about 25% of MSPs are best in class, achieving service gross margins over 50%, total blended gross margins of over 42%, and subscription recurring revenue of 50-60%. They track business health metrics instead of just operational outputs.

What Is Effective Hourly Rate and Why Is It the Most Important MSP KPI?

Effective Hourly Rate is the single most important metric for MSP profitability. It reveals how much you actually earn for each hour of service delivery, cutting through the noise to show true business health.

How to Calculate EHR:
EHR = Total Client Revenue / Total Hours Spent on Client

Unlike billing rate (what you charge), EHR shows what you earn. This distinction becomes massive with managed service agreements where clients pay a flat monthly fee regardless of how much support they consume.

Why Effective Hourly Rate Matters for MSP Profitability:
Industry guidance suggests the hourly rate an MSP needs should be roughly 4.5 times the hourly burdened salary rate, which includes taxes, benefits, insurance, and overhead. If your average technician costs $35 per hour fully loaded and you're achieving an EHR of $100, you're in good shape. If EHR drops to $60, you're barely covering costs.

Target Range for EHR: $100-150 per hour for general managed services, higher for specialized security or compliance work

Warning Signs to Watch:

• EHR declining over time for specific clients often signals scope creep
• Wide EHR variance between clients reveals pricing inconsistencies
• EHR below $75 per hour usually means unprofitable service delivery

Track effective hourly rate weekly at the client level. The clients pulling down your average are eating into your profitability, even if they pay their invoices on time.

What Is the Ideal Technician Utilization Rate for MSPs?

The ideal technician utilization rate for MSPs falls between 65-80%, balancing productivity with sustainability. Rates below 65% indicate inefficiency, while rates consistently above 85% predict burnout and turnover within 6-12 months.

The Formula:
Utilization Rate = (Billable/Productive Hours / Total Available Hours) x 100

Why Technician Utilization Matters:
Your team is your biggest investment. An MSP paying $150,000 annually for a technician who achieves only 50% utilization is effectively paying $300,000 per productive hour compared to industry benchmarks. That math destroys margins fast.

According to industry research, the Kaseya 2024 MSP Benchmark Survey found that the predominant challenge affecting MSP workload is the inability to fully utilize software solutions, with technicians frustrated by time spent switching between applications. This inefficiency directly impacts utilization rates and profitability.

Target Range: 65-80%

This range seems low, but it's intentional. The myth that 100% utilization is ideal is exactly that—a myth. Some industry guides suggest 85-90% as a target, but this ignores reality. Beyond causing burnout and turnover, near-maximum utilization means no time for training, documentation, process improvement, or proactive work that prevents future fires.

Warning Signs to Watch:

• Technician utilization below 65% suggests overstaffing or inefficient workflows
• Utilization above 85% consistently predicts burnout and turnover within 6-12 months
• Variance between technicians reveals training opportunities or workload imbalances

Review utilization weekly by technician. Look for patterns. Is utilization low because of poor dispatching, too many meetings, or not enough demand? Each cause needs a different fix.

How Should MSPs Track Monthly Recurring Revenue and MRR Growth Rate?

Monthly Recurring Revenue forms the foundation of MSP business health, providing the predictability needed for hiring, investment, and planning. Track both absolute MRR and growth rate weekly to catch client departures and contract changes before they snowball into cash flow problems.

The Formulas:
MRR = Sum of all recurring monthly contract values
MRR Growth Rate = ((Current MRR - Previous MRR) / Previous MRR) x 100

Why MRR Is Critical for MSP Success:
MSPs with strong MRR growth are 27% more likely to achieve profitability within three years. Industry benchmarks suggest targeting 80% or more of total revenue from MRR, with 70% as the minimum threshold for stability.

Investors and potential acquirers use MRR as a key valuation metric for MSP businesses. Growing, predictable MRR reflects business stability and long-term revenue potential—essential for successful exit planning or securing growth capital.

Target Benchmarks:

• MRR as percentage of revenue: 70-80%+
• Monthly MRR growth rate: 2-5% for mature MSPs, 10-20% for growth-stage
• For companies under $10M revenue, top quartile achieves 115%+ annual MRR growth

Warning Signs to Watch:

• MRR decline week-over-week signals client churn or contract downgrades
• MRR concentration in a few large clients creates risk; no single client should exceed 15% of total MRR
• Gap between MRR and recognized revenue may point to billing or collection issues

Tiered pricing strategies can increase conversion rates by up to 50%, while bundled services can boost sales by 10-30%, making these tactics worth considering for MRR optimization.

How Do You Calculate Client Profitability Score for MSPs?

Client profitability score measures the actual profit each client generates by subtracting service costs and allocated overhead from revenue, revealing which clients strengthen your business and which ones drain resources despite paying on time.

Not all revenue is equal. A client paying $10,000 per month while consuming 150 technician hours is worth far less than one paying $5,000 per month who only needs 25 hours. Client profitability scoring puts a number on this difference.

The Formula:
Client Profitability = Client Revenue - (Hours x Technician Cost) - Allocated Overhead

More sophisticated versions factor in software costs, license allocations, and risk. But even a basic calculation changes how you make decisions.

Why Client Profitability Analysis Matters:
One MSP discovered that almost 80% of their tickets came from just 10 clients, and 8 of those were receiving near white-glove service without covering their costs. This is the 80/20 rule at work, but most MSP owners can't identify their problematic clients because they don't track MSP profitability metrics at the client level.

Industry benchmarks indicate that just over a third of MSPs achieve gross service margins of 60% or greater, while 35% are in the 50-60% range, and 27% are getting 30-50%. Aiming for 60-70% gross margin is considered ideal for MSPs.

Target Benchmarks:

• Gross margin per client: 50-65%
• No clients with negative profitability
• Top 20% of clients should generate 50%+ of total profit

Warning Signs to Watch:

• Clients with declining profitability over consecutive weeks need attention
• Negative profitability clients need price adjustments or, honestly, termination
• Profitability variance between similar-sized clients reveals standardization opportunities

What Should MSPs Charge Per Endpoint or Per Seat?

MSPs should charge at least $100 per endpoint for basic managed services and $125-200 per month per seat for all-you-can-eat models. These benchmarks ensure profitability while allowing investment in quality staff, security operations, and scalable growth.

This metric normalizes revenue across different client sizes, making comparisons meaningful. It also works as a pricing health check across your client base.

The Formulas:
Revenue Per Endpoint = Total Client Revenue / Number of Managed Endpoints
Revenue Per Seat = Total Client Revenue / Number of Users Covered

Current Industry Pricing Data:
According to recent MSP pricing research, the ideal pricing range to enable a profitable business and faster scaling is $125-200 per seat per month. At this price range, MSPs can afford to hire high-tier employees, maintain a SOC team, and bring in CISO expertise as needed.

Pricing models vary across the industry. 32% use per-device pricing, 20% per-user, 5% per-seat, and 3.5% flat rate. The largest percentage (40%) use a combination of models. Just over half (54%) of MSPs use a blend of value-based and cost-plus pricing approaches.

Target Benchmarks:

• Per endpoint: $100-175 per month
• Per seat (AYCE model): $125-200 per month
• Higher for specialized security or compliance services

Warning Signs to Watch:

• Legacy clients often have lower per-endpoint revenue thanks to outdated agreements
• Variance between clients with similar service levels indicates pricing inconsistency
• Declining per-endpoint revenue suggests scope creep without corresponding price adjustments

Track this weekly to catch erosion. When you add endpoints to a client without adjusting price, this metric immediately flags the dilution.

What EBITDA Margin Should MSPs Target?

MSPs should target EBITDA margins of 15-20% for operational health, with top performers exceeding 20%. This metric directly determines your MSP valuation, with every percentage point of margin improvement translating to enterprise value.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin is the ultimate measure of operational profitability. It strips away financing decisions and accounting choices to reveal how much cash your operations actually generate.

The Formula:
EBITDA Margin = EBITDA / Total Revenue x 100

Why EBITDA Margin Determines MSP Value:
This metric determines your MSP valuation. According to current M&A data, the median EV/EBITDA multiple in H2 2024 stands at 11.4x, reflecting a return to pre-pandemic levels after the post-COVID tech boom peaked at 17.5x in H1 2021.

Valuation multiples vary significantly by size:

• Small MSPs (under $1M EBITDA): 4-5x multiples
• Mid-sized MSPs ($1-2M EBITDA): 5-6x multiples
• Larger MSPs ($2-5M EBITDA): 6-8x multiples
• MSPs with $5M+ EBITDA: 12-14x multiples

Current Industry Benchmarks:
According to Service Leadership Index Q4 2024 data:

• Average adjusted EBITDA for MSPs worldwide: 11.1%
• Private equity-backed MSPs achieved 18.7% adjusted EBITDA in Q2 2024 (their highest in eight quarters)
• 18% of MSPs reported a loss in Q4 2024
• Managed service gross margin average: 46.2%

Target Range: 15-20% for healthy MSPs, with top performers exceeding 20%

Warning Signs to Watch:

• Consistent margin decline demands immediate investigation
• Margin variance between months reveals seasonality or operational inconsistency
• Compare against service gross margin to identify whether overhead or delivery costs are the problem

Daily or even weekly EBITDA numbers bounce around, but tracking the trend line weekly helps you catch margin compression early.

What Is a Good Client Retention Rate for MSPs?

A good client retention rate for MSPs is 90% or higher annually, with top performers achieving 95%+. Industry data shows average churn at 12% annually, but nearly a third of MSPs have retention rates below 50%, forcing them to replace half their clients yearly at significant cost.

Acquiring a new MSP client costs between $1,500 and $3,000. Losing one costs far more when you factor in relationship investment, tribal knowledge, and the predictable revenue that walks out the door.

The Formulas:
Retention Rate = ((Clients at End of Period - New Clients) / Clients at Start) x 100
Churn Rate = 100% - Retention Rate

Why Retention Is Critical for MSP Profitability:
According to Harvard Business Review, acquiring new customers costs five to twenty-five times more than keeping existing ones. Increasing retention rates by just 5% can boost profitability by 25% to 95%.

Industry data reveals concerning trends. According to JumpCloud 2024 SME IT Trends report:

• The percentage of SMEs outsourcing entire IT management dropped from 42% to 29%
• 28% stopped working with MSPs due to affordability concerns as 75% of SMEs report rising licensing and subscription fees
• 26% believe they've outgrown their MSP offerings
• Nearly a quarter terminated relationships due to poor customer service

However, 76% of SMEs still use MSPs for some level of IT support, and 67% plan to increase their investment over the next six months.

Target Benchmarks:

• Annual retention rate: 90%+ (95%+ for top performers)
• Monthly churn: Less than 0.5%
• If churn exceeds 10% annually, it signals a serious issue requiring attention

Warning Signs to Watch:

• Any client termination notice should trigger root cause analysis
• Declining engagement metrics (fewer QBRs attended, slower responses) often predict churn
• Track retention by client segment to identify at-risk categories

Weekly review of retention indicators catches warning signs before formal termination notices arrive.

How Should MSPs Calculate ARPU and Customer Lifetime Value?

ARPU (Average Revenue Per User) and CLTV (Customer Lifetime Value) are forward-looking metrics that help MSPs understand not just current revenue but the full value of client relationships over time, informing acquisition spending and retention priorities.

The Formulas:
ARPU = Total Revenue / Total Users Served
CLTV = Average Monthly Revenue x Average Client Lifespan (months)

Why These Metrics Drive MSP Strategy:
Top-performing MSPs tend to have ARPU above $250, combined with staff utilization rates of 76%+. This shows that commanding premium prices while keeping operations efficient is the key to profitability.

Only about a third of MSPs track Customer Lifetime Value or churn rates, even though these metrics directly tie to retention and recurring revenue. This represents a real opportunity for MSPs willing to measure what matters.

Target Benchmarks:

• ARPU: $200-300+ for fully managed services
• CLTV: 36-60 months of average monthly revenue (reflecting 3-5 year average client relationships)
• CLTV to Customer Acquisition Cost ratio: At least 3:1

Warning Signs to Watch:

• ARPU declining while client count increases signals you're winning smaller, potentially less profitable clients
• CLTV declining indicates either pricing pressure or retention problems
• Compare CLTV to Customer Acquisition Cost; CLTV should be at least 3x CAC

What SLA Compliance Rate Should MSPs Maintain?

MSPs should maintain SLA compliance rates of 95% or higher across all priority levels. Research from Gartner found that MSPs using structured SLA tracking and regular KPI reviews saw a 25% reduction in client churn over two years compared to those without formalized metrics frameworks.

Service Level Agreement compliance directly affects client satisfaction, retention, and your reputation. Beyond client-facing implications, SLA tracking reveals operational efficiency and capacity constraints.

The Formula:
SLA Compliance = (Tickets Resolved Within SLA / Total Tickets) x 100

Why SLA Compliance Drives Retention:
SLA compliance is not just about meeting contractual obligations; it is about building the operational discipline that drives retention. Given that nearly a quarter of SMEs terminated MSP relationships due to poor customer service, maintaining high SLA compliance directly protects your revenue.

Target Benchmarks:

• Overall SLA compliance: 95%+ across all priority levels
• Critical/Tier 1 outages: 2-4 hour resolution
• Standard tickets: 1 business day resolution
• Service uptime: 99.9% minimum, with top performers pushing for 99.99%

Warning Signs to Watch:

• Compliance dropping for specific clients may indicate scope issues or environment complexity
• Compliance dropping for specific technicians reveals training or workload problems
• Pattern of breaches at certain times indicates capacity constraints

Weekly SLA review by client and technician identifies problems before they become client complaints.

How Should MSPs Track Ticket Age Distribution and Stale Tickets?

Track ticket age in buckets (0-3 days active, 4-7 aging, 8-14 at risk, 15-30 stale, 30+ critical review) to catch client satisfaction issues before they escalate. Target 90% of tickets resolved within 7 days and zero tickets over 30 days without documented justification.

This operational metric serves as a leading indicator for client satisfaction, team accountability, and process health. It catches problems that slip through other metrics.

The Framework:
Track tickets by age buckets:

• 0-3 days: Current/Active
• 4-7 days: Aging
• 8-14 days: At Risk
• 15-30 days: Stale
• 30+ days: Critical Review Required

Why Ticket Age Distribution Matters:
Stale tickets erode client trust and often signal deeper problems: scope disputes, resource constraints, or technical debt nobody wants to touch. Best practice suggests tickets should ideally never exceed 7 days, and setting an expectation that technicians update their tickets every 3-4 days creates accountability.

Target Benchmarks:

• 90%+ of tickets resolved within 7 days
• Less than 5% of tickets older than 14 days
• Zero tickets older than 30 days without documented justification

Warning Signs to Watch:

• Rising stale ticket counts predict client dissatisfaction before you hear complaints
• Stale tickets concentrated on specific clients indicate relationship or scope issues
• Stale tickets concentrated with specific technicians reveal capacity or skill gaps

Review ticket age distribution weekly. Setting a target for tickets over 30 days and reviewing them weekly creates a process that prevents the backlog buildup damaging client relationships.

How to Build an Effective Weekly MSP KPI Dashboard

An effective weekly MSP KPI dashboard organizes metrics into three tiers: financial health metrics reviewed first, operational efficiency metrics second, and leading indicators third. This structure ensures you address profitability issues before they compound.

Knowing what to track is only half the work. The other half is building a sustainable review process that turns data into action.

Dashboard Structure

Organize your weekly dashboard into three tiers:

Tier 1: Financial Health (Review First)

• MRR and week-over-week change
• EBITDA margin trend
• Client profitability alerts (any client below threshold)

Tier 2: Operational Efficiency

• Average effective hourly rate across all clients
• Technician utilization by team member
• SLA compliance rate

Tier 3: Leading Indicators

• Ticket age distribution
• Retention risk flags
• Revenue per endpoint changes

What Is the Best Weekly KPI Review Schedule for MSPs?

The best weekly KPI review schedule includes a Monday morning 15-minute triage, Wednesday 10-minute client profitability check, and Friday 30-minute deep dive with week-over-week comparisons and action items.

Monday Morning (15 minutes): Quick scan of all 10 MSP KPIs. Flag anything outside normal ranges. This is triage, not deep analysis.

Wednesday Check-in (10 minutes): Review client profitability and EHR for active projects or heavy support weeks. Catch problems while you can still course-correct.

Friday Deep Dive (30 minutes): Full dashboard review with week-over-week comparisons. Document trends. Identify action items for next week.

Data Sources and Integration

Most MSPs can pull these metrics from tools they already have:

• PSA (ConnectWise, Autotask, Syncro): Ticket data, time entries, SLA tracking, revenue by client
• Accounting Software (QuickBooks, Xero): Cost data, EBITDA components, cash flow
• RMM: Endpoint counts, device health metrics
• Business Intelligence Tools (BrightGauge, MSPbots): Automated dashboards and reporting

The challenge is connecting these data sources into a unified view. BI platforms like BrightGauge offer over 4,200 pre-built metrics and templates with PSA and RMM integration. Even without dedicated BI tools, a well-structured spreadsheet updated weekly can provide the visibility you need.

Common Implementation Pitfalls to Avoid

Tracking too many metrics: Start with the 10 listed here. Resist adding more until you have mastered these.

Inconsistent data collection: Automate wherever possible. Manual data entry creates gaps and errors.

No action triggers: Define in advance what each metric means. What effective hourly rate triggers a client pricing conversation? What utilization rate triggers a hiring discussion?

Review without accountability: Assign owners to each metric. Someone should investigate anomalies and propose solutions.

How to Turn MSP KPIs Into Operational Improvements

Data without action is just overhead. The most successful MSPs create action triggers for each metric, responding to EHR drops with client analysis and pricing conversations, utilization issues with workflow or staffing changes, and profitability problems with contract renegotiation or offboarding plans.

When EHR Drops Below Target

1. Identify the specific clients causing the decline
2. Analyze ticket patterns for those clients (volume, complexity, root causes)
3. Determine if the issue is pricing, scope creep, or environment instability
4. Schedule a client conversation to address root causes or adjust agreement terms

When Utilization Falls Outside Range

Too Low (below 65%):

• Review dispatching efficiency
• Check for bottlenecks in project scheduling
• Consider cross-training to expand assignable work

Too High (above 80%):

• Immediately assess burnout risk
• Accelerate hiring or contractor engagement
• Review automation opportunities for repetitive tasks (89% of MSPs say automation is critical to their future profitability)

When Client Profitability Turns Negative

1. Verify the data (make sure all revenue and costs are properly allocated)
2. Document the specific cost drivers
3. Build a case for contract renegotiation with clear data
4. If renegotiation fails, develop a professional offboarding plan

When Retention Metrics Decline

1. Identify at-risk clients through engagement indicators
2. Schedule proactive QBRs focused on demonstrating value
3. Document and address service delivery gaps
4. Consider client success programs for high-value accounts

The Path Forward for MSP Profitability

MSPs achieving 18-20% profit margins and commanding premium valuations share something in common: they manage by metrics, not instinct. They have moved past ticket counts to the financial and operational MSP KPIs that actually drive business health.

With the managed services market projected to reach $731 billion by 2030 and over $400 billion in private equity dry powder targeting technology services for acquisitions, the stakes for getting this right have never been higher. MSPs that master these metrics position themselves for both operational excellence and attractive exit opportunities.

Start with these 10 metrics. Build a weekly review habit. Create action triggers for each one. Within 90 days, you will have visibility into your business that most MSP owners never achieve.

Ticket counts will always have their place. But they are just one data point among many. The MSP owners building sustainable, valuable businesses are the ones tracking what matters, acting on what they find, and continuously improving operations based on real data.

Your PSA dashboard might show 847 tickets closed this week. The question is: what did those 847 tickets actually earn you?

Now you have the framework to answer that question, along with every other question that determines whether your MSP thrives or just survives.

Frequently Asked Questions

What is the most important KPI for MSP profitability?

Effective Hourly Rate (EHR) is the most critical MSP profitability metric. It reveals true revenue per hour of service delivery by dividing total client revenue by hours spent servicing them. Industry benchmarks suggest MSPs should target EHR of $100-150 per hour, with rates below $75 per hour typically indicating unprofitable service delivery.

What is a good technician utilization rate for MSPs?

Aim for technician utilization between 65-80%. Below 65% suggests inefficiency or overstaffing, while consistently above 80-85% predicts burnout and turnover within 6-12 months. The 100% utilization myth ignores essential time for training, documentation, and proactive work that prevents future fires.

How often should MSPs review their KPIs?

Weekly reviews of core operational and profitability MSP KPIs help owners spot trends and problems before they spiral. Best practice includes a Monday morning quick scan, Wednesday mid-week check-in on client profitability, and Friday deep dive with week-over-week comparisons. Monthly analysis adds strategic context.

What EBITDA margin should MSPs target?

Healthy MSPs target EBITDA margins of 15-20%, while top performers exceed 20%. According to Service Leadership Index Q4 2024 data, the average adjusted EBITDA for MSPs was 11.1%, with 18% of MSPs reporting a loss. EBITDA directly determines MSP valuation, with multiples typically ranging from 6-8x for smaller MSPs up to 11-14x for larger providers.

How do you calculate Effective Hourly Rate for MSP clients?

Divide total monthly revenue from a client by total hours spent servicing them. For example, a client paying $5,000 per month who needs 40 hours of service has an EHR of $125 per hour. Industry guidance suggests EHR should be approximately 4.5 times the technician's fully burdened hourly rate including taxes, benefits, and overhead.

What is a good client retention rate for MSPs?

Top-performing MSPs maintain annual retention rates of 90-95% or higher, with monthly churn under 0.5%. Industry averages show 12% annual churn, but nearly a third of MSPs have retention rates below 50%, requiring them to replace half their client base yearly at significant cost.

How much should MSPs charge per endpoint or per seat?

Industry benchmarks suggest MSPs should charge at least $100 per endpoint for basic managed services. For per-seat pricing, the profitable range is $125-200 per month per user, with some MSPs charging $150-200 for comprehensive services. Charging $50-75 per seat may work for startups but limits long-term profitability and scalability.