Problem Client Scorecard: A Free Template to Grade Your Client Base

After discovering that three of his highest-revenue clients were actually losing money, Marcus knew he needed a systematic way to evaluate his entire client portfolio. He had 47 active clients, and manually calculating detailed P&L statements for each would take weeks. What he needed was a screening tool—a way to quickly identify which clients deserved deeper analysis and which were clearly problematic.

The solution was a client scoring system that combined easily accessible metrics into a single, actionable score. Using data from his PSA and basic financial information, Marcus developed a scorecard that ranked every client from 1-100. The results were eye-opening: his intuition about "good" and "bad" clients was wrong about 40% of the time.

This scorecard became the foundation of his client portfolio management strategy. Within six months, Marcus had terminated relationships with his five lowest-scoring clients, renegotiated contracts with ten marginal ones, and doubled down on serving his highest-scoring accounts. His EBITDA margin improved from 11% to 18%.

Here's the exact scoring framework he developed, refined, and used to transform his MSP's profitability.

The Framework: Three Categories, Weighted by Impact

The Problem Client Scorecard evaluates clients across three dimensions that directly impact MSP profitability:

1. Financial Impact (50% of total score) - Metrics that directly affect your bottom line
2. Operational Impact (35% of total score) - Factors that influence team efficiency and resource consumption
3. Strategic Fit (15% of total score) - Long-term compatibility and growth potential

This weighting reflects the reality that financial performance is the primary concern, but operational efficiency and strategic alignment create compounding effects over time.

Financial Impact Metrics (50 Points Maximum)

Metric 1: Effective Hourly Rate (EHR) - 20 Points

The Effective Hourly Rate measures how much revenue you generate per hour of work for each client:

EHR = Monthly Recurring Revenue ÷ Monthly Support Hours

Scoring:

• 20 points: EHR > 3x your fully-loaded labor cost
• 15 points: EHR 2.5-3x your fully-loaded labor cost
• 10 points: EHR 2-2.5x your fully-loaded labor cost
• 5 points: EHR 1.5-2x your fully-loaded labor cost
• 0 points: EHR < 1.5x your fully-loaded labor cost

Example: If your fully-loaded technician cost is $75/hour:

• Client with EHR of $240 scores 20 points (240 ÷ 75 = 3.2x)
• Client with EHR of $95 scores 0 points (95 ÷ 75 = 1.27x)

Metric 2: Payment Reliability - 10 Points

Consistent, timely payments indicate financial stability and respect for your business relationship.

Scoring:

• 10 points: Always pays within terms (0 late payments in 12 months)
• 8 points: Occasionally late (1-2 late payments in 12 months)
• 5 points: Frequently late (3-5 late payments in 12 months)
• 2 points: Chronically late (6+ late payments in 12 months)
• 0 points: Currently past due or has required collections action

Metric 3: Project Profitability - 10 Points

Projects reveal how well clients respect scope and budget constraints.

Scoring:

• 10 points: Projects consistently come in under or on budget
• 8 points: Projects occasionally exceed budget by <10%
• 5 points: Projects regularly exceed budget by 10-25%
• 2 points: Projects frequently exceed budget by >25%
• 0 points: Projects consistently lose money or require significant scope concessions

Metric 4: Revenue Growth Trend - 10 Points

Growing accounts indicate expanding business relationships and future opportunity.

Scoring:

• 10 points: Revenue increased >20% year-over-year
• 8 points: Revenue increased 10-20% year-over-year
• 6 points: Revenue increased 5-10% year-over-year
• 4 points: Revenue remained flat (±5%)
• 2 points: Revenue decreased 5-15%
• 0 points: Revenue decreased >15%

Operational Impact Metrics (35 Points Maximum)

Metric 5: Ticket Volume Efficiency - 10 Points

This measures ticket volume relative to the client's size and complexity.

Calculate: Monthly tickets ÷ (Number of users + Number of devices)

Scoring:

• 10 points: Ratio < 0.15 (highly efficient)
• 8 points: Ratio 0.15-0.25 (efficient)
• 6 points: Ratio 0.25-0.40 (average)
• 3 points: Ratio 0.40-0.60 (high maintenance)
• 0 points: Ratio > 0.60 (extremely high maintenance)

Example: A client with 25 users, 30 devices, and 8 monthly tickets: 8 ÷ (25 + 30) = 0.145 = 10 points

Metric 6: Scope Creep Frequency - 10 Points

Tracks how often clients request work beyond their agreement scope.

Scoring:

• 10 points: No scope creep incidents in past 6 months
• 8 points: 1-2 minor scope creep incidents, easily resolved
• 5 points: 3-5 scope creep incidents or 1 major incident
• 2 points: 6+ scope creep incidents or multiple major incidents
• 0 points: Constant scope creep, difficult to contain

Metric 7: Technology Standardization Compliance - 8 Points

Measures alignment with your standard technology stack.

Scoring:

• 8 points: 95-100% compliance with standard stack
• 6 points: 85-94% compliance
• 4 points: 75-84% compliance
• 2 points: 60-74% compliance
• 0 points: <60% compliance

Metric 8: Communication Quality - 7 Points

Assesses how professionally and efficiently the client communicates.

Scoring:

• 7 points: Always professional, follows proper channels, clear communication
• 5 points: Generally professional with occasional lapses
• 3 points: Mixed communication quality, some difficult interactions
• 1 point: Often unprofessional, bypasses procedures, creates drama
• 0 points: Consistently abusive, hostile, or disrespectful

Strategic Fit Metrics (15 Points Maximum)

Metric 9: Business Growth Alignment - 8 Points

Evaluates whether the client's business trajectory aligns with your growth strategy.

Scoring:

• 8 points: Growing business in target industry with expansion potential
• 6 points: Stable business with some growth potential
• 4 points: Stable business with limited growth potential
• 2 points: Declining business but stable for now
• 0 points: Declining business at risk of failure

Metric 10: Reference and Referral Value - 7 Points

Considers the client's value for marketing and business development.

Scoring:

• 7 points: Excellent reference, has provided multiple referrals
• 5 points: Good reference, has provided some referrals
• 3 points: Willing to serve as reference but hasn't provided referrals
• 1 point: Neutral reference value
• 0 points: Would not serve as reference or might provide negative references

Using the Scorecard: Implementation Guide

Step 1: Gather Your Data

For each client, collect:

• Monthly recurring revenue and support hours (past 6 months)
• Payment history (past 12 months)
• Project performance data
• Ticket volume and user/device counts
• Technology stack inventory
• Communication incident logs

Step 2: Score Each Client

Create a spreadsheet with clients in rows and metrics in columns. Score each metric according to the criteria above, then calculate:

Total Score = (Financial Points) + (Operational Points) + (Strategic Points)

Step 3: Categorize Your Portfolio

Based on total scores, categorize clients into five tiers:

Tier 1: Premium Clients (85-100 points)

• These are your ideal clients—profitable, efficient, and strategically valuable
• Focus on expanding services and maintaining exceptional satisfaction
• Use these clients as templates for prospecting similar accounts

Tier 2: Strong Clients (70-84 points)

• Solid, profitable relationships with room for improvement
• Identify specific areas for optimization (standardization, process improvement)
• Monitor for any declining trends

Tier 3: Average Clients (55-69 points)

• Middle-tier clients that are neither exceptional nor problematic
• Evaluate potential for improvement vs. effort required
• Consider for process standardization initiatives

Tier 4: Problematic Clients (40-54 points)

• Clients with significant issues impacting profitability
• Require immediate intervention: contract renegotiation, process changes, or termination consideration
• Monitor closely with specific improvement timelines

Tier 5: Problem Clients (0-39 points)

• Clients that are actively damaging your business
• Strong candidates for termination unless dramatic changes occur quickly
• Calculate the cost of keeping vs. terminating these relationships

The 2025 Context: Why This Matters More Than Ever

In 2025's competitive MSP landscape, portfolio optimization has become crucial for survival. Industry data shows that MSPs average working with 20-25 different vendors, creating significant operational overhead. The most successful MSPs—those achieving 19%+ EBITDA margins—have learned to be selective about client relationships.

The vendor sprawl problem compounds client management challenges. When you're managing dozens of different technology platforms to accommodate non-standard clients, your operational complexity increases exponentially. The scorecard's standardization compliance metric directly addresses this challenge by quantifying the true cost of supporting diverse technology environments.

Real-World Implementation: Marcus's Results

After implementing the scorecard across his 47-client portfolio, Marcus discovered several surprising insights:

Revenue vs. Score Correlation: His three highest-revenue clients scored 23, 31, and 67 points respectively. Only one was actually profitable.

Hidden Gems: Two smaller clients (under $3,000 MRR each) scored 89 and 92 points, representing his most efficient and profitable relationships.

Industry Patterns: Clients in certain industries consistently scored higher due to better IT practices and more professional communication.

Size Sweet Spot: Mid-sized clients (15-50 employees) generally scored higher than very small (<10 employees) or very large (>100 employees) accounts.

Template Download: Your Client Scorecard Spreadsheet

Here's a basic Excel template structure to implement the scorecard:

Column Structure:

• A: Client Name
• B: Monthly Revenue
• C: Monthly Hours
• D: EHR Score (20 pts max)
• E: Payment Score (10 pts max)
• F: Project Score (10 pts max)
• G: Growth Score (10 pts max)
• H: Ticket Score (10 pts max)
• I: Scope Score (10 pts max)
• J: Standard Score (8 pts max)
• K: Comm Score (7 pts max)
• L: Growth Score (8 pts max)
• M: Referral Score (7 pts max)
• N: Total Score
• O: Tier Classification

Formulas:

• EHR Calculation: =B2/C2
• EHR Score: Use IF statements based on your scoring criteria
• Total Score: =SUM(D2:M2)
• Tier: Use nested IF statements to classify based on total score

Action Planning: What to Do with Your Results

Once you've scored all clients, develop specific action plans for each tier:

For Tier 1 Clients (85-100 points):

• Schedule quarterly strategic reviews
• Proactively propose expansion opportunities
• Ensure they receive your best technicians
• Request case studies and testimonials
• Ask for referrals to similar businesses

For Tier 4-5 Clients (0-54 points):

• Conduct immediate profitability analysis
• Calculate termination costs vs. continuation costs
• Develop 90-day improvement plans with specific metrics
• Prepare professional termination procedures if needed
• Document all interactions for legal protection

The Ongoing Process: Quarterly Reviews

The scorecard isn't a one-time exercise. Leading MSPs review and update scores quarterly, tracking trends and identifying early warning signs. This proactive approach prevents good clients from becoming problematic and identifies struggling relationships before they become significant drains.

Key Trend Indicators:

• Scores declining over 2+ quarters
• Scores improving after intervention
• New clients' initial scores vs. expectations
• Correlation between scores and actual profitability analysis

Taking Action: Start with Your Top 10

Don't attempt to score all clients at once. Start with your top 10 clients by revenue and score them using this framework. The results will likely reveal surprising insights about which relationships are truly valuable to your business.

Remember that in 2025's competitive MSP market, success isn't about serving the most clients—it's about serving the right clients well. The scorecard helps you identify who deserves your best efforts and who might be preventing you from achieving your full potential.

The MSPs achieving 19%+ EBITDA margins aren't just better at delivering IT services—they're better at choosing which clients to serve. This scorecard gives you the systematic approach to make those crucial decisions based on data rather than intuition. For detailed financial analysis of your client relationships, use our guide to calculating client profitability, and for understanding broader patterns in your portfolio, review our analysis of the 80/20 rule in MSP businesses.

Your scorecard results might be uncomfortable, but they'll also be liberating. When you know which clients are truly contributing to your success, you can focus your energy where it matters most and build a more profitable, sustainable MSP business.

Frequently Asked Questions

What is a Problem Client Scorecard for MSPs?

A Problem Client Scorecard is a systematic framework that ranks clients from 1-100 across financial impact (50%), operational impact (35%), and strategic fit (15%) to identify which relationships are profitable and which are problematic.

How do you score MSP clients for profitability?

Score clients using weighted metrics: EHR performance (20 points), payment reliability (10 points), project profitability (10 points), revenue growth (10 points), plus operational and strategic factors totaling 100 points maximum.

What are the client tier classifications in the scorecard?

Five tiers: Premium Clients (85-100 points), Strong Clients (70-84), Average Clients (55-69), Problematic Clients (40-54), and Problem Clients (0-39 points). Each tier receives different strategic treatment and resource allocation.

How often should MSPs update client scorecards?

Leading MSPs review and update scores quarterly, tracking trends and identifying early warning signs. This proactive approach prevents good clients from becoming problematic and identifies struggling relationships early.

What metrics are most important for MSP client scoring?

Effective Hourly Rate (EHR) is most critical, measuring revenue per support hour. Also important: payment reliability, scope creep frequency, technology standardization compliance, and communication quality patterns.

Can small MSPs benefit from client scoring systems?

Yes, client scoring is especially valuable for smaller MSPs with limited resources. Start by scoring your top 10 clients by revenue to identify surprising insights about which relationships truly contribute to business success.

What should you do with low-scoring clients?

For Tier 4-5 clients (0-54 points): conduct immediate profitability analysis, develop 90-day improvement plans, calculate termination vs. continuation costs, and prepare professional termination procedures if improvement fails.