As I say all the time, in the Managed Services business, great retention is almost implied. Most MSPs are able to lock customers into multi-year contracts and renew those contracts multiple times over. This concept of “baked-in” retention has its benefits, but it presents challenges as well. When relying on a customer’s fear of change to drive retention and increase their value, it can be very easy to get complacent. It’s also difficult to differentiate yourself from the herd of your competitors making the exact same claims around “customer satisfaction” and the like.
This where the concept of rewards can change the way your customers perceive you and your business. In reality, rewarding behaviors that make the relationship more valuable (and profitable) over its entire lifetime will benefit you far more than it benefits the customer, but that doesn’t make them any less satisfied. People just love to be recognized for their contributions.
Here are few ways that you can use this to your advantage to keep your clients constantly engaged and earn their retention as a result:
Reward Their Utilization
If you have all-you-can eat contracts in place, then you ideally want to keep the usage of these contracts relatively low. We have all had that customer that seems to open a ticket for even the smallest issue, with no regard for how this effects you, your team, and your bottom line. If you have several of these clients that over-utilize your services (with no profit to be had) it can be difficult to stay adequately staffed, creating a snowball effect that disrupts all of your customers as a result.
If you want to get your clients to stop creating an excessive amount of tickets, then consider rewarding them when they don’t. For example, you could set a target utilization of 20% and offer some kind of discount or reward when they drop below that. This means that if the client has 100 endpoints, that they would have created 20 or fewer tickets over this period. As you start to track this, you may even be able to introduce multiple tiers based on common utilization rates, and increase the reward as the utilization decreases.
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Track Best Practices
Outside of user behavior, the next biggest cause of over-utilization is the failure to comply with best practices. As an MSP, this is one of the most difficult things to manage. These standards are constantly evolving and we are forced to drag our clients along for the ride along, whether they want to come or not (most don’t). If you are successful in getting your clients to follow suit, you will not only be able to sell more IT Projects, but you can benefit from a lower utilization of your support team, which is a compounding benefit to say the least.
If you have a well established (and documented) set of best practices, you can easily compare your clients against them and see how they stack up. We broke up our recommendations into different tiers and offered clients a discount on project labor as they progressed through the tiers. This meant that as they completed major projects to move up to the next tier, the next project would be further discounted, creating a constant cycle of improvement that aligned both party’s goals into one.
People often track “streaks” as a way of manufacturing motivation. It is a way of reflecting backward on an accomplishment, but at the same time creating added pressure to surpass the next milestone or achievement. As the streak gets longer, the probability of it ending doesn’t necessarily change, but people become more motivated to continue it, simple to not “break the streak.”
This same concept can be used to reward your clients for their retention. I would recommend establishing an “anniversary” for every one of your customers and surprising them with some kind of tangible gift or reward each year on this date. As the years go by, you can make these rewards larger, even further reinforcing the incentive to keep the streak alive and renew the relationship.
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Dedicate A Month
While discounts, gifts, and other tangible incentives can be effective, sometimes recognition is all your client needs. This can be done through a “customer of the month” program where you use your platform to spotlight their business and what makes them unique. Not only will the customer enjoy the free advertising and public recognition, but other businesses and prospects will see this and realize how great you treat your customers.
I would recommend coming up with a nomination process for this program to make it more meaningful for the recipient. If the customer realizes that your entire company voted for them to be recognized, it will carry more weight than if it is simply one person making the decision. Also consider putting context to the decision, (such as recently completed projects or low utilization), so that the customer knows the behaviors that are being rewarded.
Refer Them Business
No matter who your customer is and how they use your services, you should always try to refer them new business. Not only will this help them grow (which leads to more endpoints under management for you) but it will also yield more inbound referrals as they reciprocate. By acting as the hub between tens, hundreds, or thousands of businesses, you actually have a substantial amount of referral power and can connect customers with each other to produce win/win/win scenarios.
In order to become an effective referral partner, you have to learn as much as you can about your client’s business. This includes who their target customer is, where they are located, and what makes them buy. As you or your sales team are out connecting with people and looking for new business, you should also be seeking opportunities for them as well. The more you give, the more will receive and in this case, you will win no matter what end of the transaction you are on.