How do you find new customers? And how do you keep the ones you have?
The cloud business is booming and thousands of managed service providers (MSPs) are entering the market in droves. In fact, according to ChannelE2E, the global market for MSPs is expected to reach $229.59 billion by 2020, a 10.2% increase in just a few years.
That is a lot of opportunity, as well as a lot of competition.
So, how much is it worth to you to ensure your customers stay loyal in this brave new world dominated by cloud providers and SaaS startups? And how do you plan to compete with hundreds of other MSPs who are targeting your customers as we speak?
In today’s digital world, where immediate gratification is a common expectation, there is really only one way to ensure both: a focus on customer satisfaction.
The real value of customer satisfaction
You are probably already familiar with the most common metrics used to track customer satisfaction:
- Net Promoter Score (NPS)
- Customer Effort Score (CES)
- Customer Satisfaction Score (CSAT)
But which one matters most and why?
The Net Promoter Score (NPS)
The Net Promoter Score (NPS) answers the question:
“Would you recommend this company?”
Knowing whether your customers would recommend you to their colleagues is a good way to gauge customer loyalty, but it’s only one step on the way to determining their overall satisfaction. It tells you “how” they feel but not “why” they feel the way they do.
The Customer Effort Score (CES)
The Customer Effort Score (CES) answers the question:
“How easy was it to resolve your complaint?”
According to the Harvard Business Review, reducing customer effort is becoming the most crucial factor in determining customer behavior.
Do you provide solutions quickly and efficiently or do you make your customers jump through hoops to find what they are looking for? Turns out, resolving your customer complaints may be more important than the quality of your product or service.
The Customer Satisfaction Score (CSAT)
The Customer Satisfaction Score (CSAT) is a product of both the NPS and CES and answers the most important question of all:
“How satisfied are you with your customer experience?”
A good CSAT score implies high customer loyalty and low customer effort. It is an extremely relevant metric, one that many companies strongly consider before choosing to do business with you.
If your business relies on word of mouth (and all do), then your CSAT score is your secret weapon to keeping your customers loyal.
But what does that mean for your bottom line?
Customer satisfaction and sales
Loyal customers are more easily convinced to try new products and services, and willing to spend more for them when they do. In fact, according to market research, an increase of 5% in customer loyalty can increase profitability by 25-95%.
That’s a lot of bang for your buck but it begins with keeping your customers satisfied. By increasing your customer satisfaction, you will not only see an immediate increase in sales, but a lower cost of ownership.
Customer satisfaction and cost reduction
Did you know, it costs more to attract a new customer than it does to keep an existing one?
Think about all the costs associated with finding and nurturing new leads:
- Sales teams
- Marketing campaigns
- Follow-up calls
The list goes on. Improving your customer satisfaction not only means higher revenue by increasing customer loyalty, it also means higher profitability by reducing the time, effort, and cost associated with nurturing new leads.
This is great news for companies that are well-established and don’t need to invest in building a customer base. But what about new companies that have to compete with them?
Customer satisfaction and brand differentiation
Many MSPs pitch themselves as silent partners, connecting companies and customers without ever being seen. As a result, they tend to focus more attention on sales than brand differentiation. That may have worked in the past but it won’t work anymore.
According to “Customers 2020,” a B2B consumer study by Walker, customer experience will soon overtake price and product as a key brand differentiator. In fact, some argue that we are already there.
Alex Allwood, CEO of The Holla Agency and author of “Customer Experience is the Brand,” says, “Today’s marketplace has become very competitive and commoditised. There is little differentiation between one brand and the next.”
“If you are already competing on price, technology or innovation,” she continues, “what is going to differentiate you from your competitors? What is going to be your point of difference?”
Simple questions, if you know the answers. The “best” product or service is meaningless unless you are providing the “best” customer experience.
The future success of your business depends on exceeding your customer expectations. By focusing more attention on customer satisfaction, you will reduce customer churn, increase ROI, and give your brand a competitive advantage.
For more insights on what customer satisfaction can do for your business, take a minute to download, “10 Ways Customer Satisfaction Is Affecting Your Bottom Line,” and learn how to succeed by keeping your customers happy!