This may come as a surprise but not all QBRs should be created equally. By trying to apply the same uniform process to all of your clients, you’ll be faced with a never-ending loop of adjustments in order to create a repeatable QBR process. To avoid this, you can use client size, complexity and capacity to determine if an account qualifies for a low, medium or high touch QBR.
By trying to apply the same uniform process to all of your clients, you’ll be faced with a never-ending loop of adjustments in order to create a repeatable QBR process. Meanwhile, all of this extra work can eat up a lot of valuable time and can feel overwhelming as you try to stay on top of the constant changes.
To avoid this, you can use client size, complexity and capacity to determine if an account qualifies for a low, medium or high touch QBR.
On one hand, your clients have a need based on their size and complexity. On the other hand, your MSP has a certain capacity for each client based on the MRR the client pays. These elements need to be matched to produce just the right amount of value for your QBRs while ensuring maximum results.
For example, if you have a large client but you can’t put in the needed facetime, planning or account management, that's going to lead to a drop in client engagement which can contribute to churn. Meanwhile, if you put a lot of effort into a small client, you’ll end up overserving them and you won’t be able to generate profit on the contract.
As a quick rule of thumb, your account management cost should be around 5% of each account’s MRR. Meaning, if you have an account that’s bringing in $1,000 MRR, then you have $50 of your team’s time to invest in that client. This would work out to roughly 30 to 60 minutes of account management activities per month.
The key thing here is to have a framework in place so you know precisely how much time you should be spending on an account so it won’t eat into your margins and will keep you profitable.
To properly prepare for each client’s unique QBR, you need to analyze and classify which of the following three QBR categories they fall into.
Keep in mind that while client size will typically determine which category a client falls into, don’t forget that complexity will play a part too. For example, a professional architecture firm with 50 seats could be far more complex than a digital marketing agency with 75 seats — so plan accordingly.
For accounts bringing in less than $1,500 in monthly recurring revenue or those that have approximately 10 seats, these clients would fall into the low touch QBR category. As a result, you should only be spending around one to three hours per month in QBR prep time and the three-point assessment combined.
Keep in mind that these clients shouldn’t require as much work as their complexity is low. Additionally, your budget can’t afford to spend as much facetime with them in terms of your own margins.
For low touch clients, it’s best practice to have an official, long session every year with a shorter session in the midterm. You can also supplement these sessions with quick check up calls every once in a while.
If an account brings in between $1,500 to $10,000 in monthly recurring revenue, it would classify as a medium touch account. When it comes to QBR prep time for these accounts, you should anticipate dedicating around three to seven hours per month, including the time needed for your three-point assessment.
For clients in this middle range, one formal QBR per quarter should be sufficient and you’ll most likely be engaging with just one individual. To keep these sessions engaging and short, you may want to consider distributing the agenda items across all four quarters.
Accounts in this category should be bringing in a minimum of $10,000 in MRR or have at least 70 to 80 seats. These clients are large and their complexity is high so they will need more attention from you.
As a result, your QBR prep time and three-point assessment should be around eight hours combined per month.
These QBRs might involve a lot of people from multiple departments and there may be multiple decision makers with internal politics at play. As a result, it might be best to do QBRs more frequently or to have longer sessions to cover multiple agenda points.
By creating your QBRs based on client size, complexity and capacity, you’ll be able to rely on a winning strategy for your process without the need for constant changes or any guesswork involved. With set guidelines for how much time you should dedicate toward your QBR prep, you can have added peace of mind knowing your margins will be protected. Regardless of which QBR category an account falls into, just be sure to set proper expectations both internally and with your client.