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To paraphrase Jane Austin, it is a truth universally acknowledged, that an MSP in possession of a good fortune, must be in want of happy customers. The fact is, happy customers tend to be more profitable than those who are either just ‘ok’ with what they receive or are actually unhappy. Happy customers are also more likely to renew their services without much convincing and tend to be more open to cross-selling and up-selling.

Happy workers drive improved customer satisfaction

Yet, happy customers are still dependent upon everything working in the way that they expect, both from meeting expectations set through the sales process to day-to-day experiences with availability, support and the rolling out of patches, updates, and new functionality.

Much of this is then also dependent on the MSP’s own workforce – which brings us to the point that happy customers are pretty much dependent on a happy workforce.

For an MSP, this may require that they alter how they deal with the workforce to create an environment where everyone has bought into ensuring that customer expectations are met.

A ‘simple’ way to ensure worker happiness is to provide an environment that meets your employees’ needs.  This may involve being flexible about where an employee works from, and how long they work. The COVID-19 pandemic has demonstrated that it is possible for effective working from home – and with MSPs, there is little requirement for many people to be on-site for most of the time.  Remote working can be easily arranged for most workers – if they want it.  Those who desire part-time work can also be accommodated – for example, those wanting parental leave or having disabilities that make full-time work less feasible.

Employee incentives help to promote service excellence

The next area is where a lot of firms have struggled – pay.  This is not generally about the salary, but more about how to create an environment that creates an incentive for employees to work to best support the customer and prospective customers.

Overall, the focus has been in using incentives on the sales side, which can bring in problems when it comes to an end of quarter and salespeople haven’t quite met their quota.  Promises may be made that the MSP may struggle to fulfil; deals may be made that are less profitable (or even non-profitable).  Instead, a system that enables all to gain when customers are happy could be a better way to do things.

The following steps can provide such an environment:

  • Calculate the existing lifetime value per customer. Based on knowledge of how you are doing, look at renewal rates and base profit margins, excluding cost of sale. This will provide an idea of how much an ‘average’ customer is worth to you.  Define the percentage profit your company needs or wants to make across this and then you will be left with as a possible pot of money that can be set aside for incentives.
  • Review existing salary structures. Salespeople should be paid sufficiently so that they are not a risk to your company during any sales process. You want to ensure that they are incentivised, but not to the point where they need to make sales to maintain a basic lifestyle. Likewise, backend staff such as support, developers, and engineers, should also be paid an acceptable salary.

This will require a review of the first point: it will impact that calculation as to what the baseline costs are and so what amount is available for further incentivisation of the workforce.  However, it is still worthwhile doing things in this order to provide the initial baseline and then the new working hypothesis.

  • Educate. Ensure that the employee base has bought in to the idea.  Lay out what is expected of them in how they deal with customers.  Explain the goals of the programme in optimising customer retention rates, reducing help desk calls, increasing customer conversion rates or cross-selling and up-selling.
  • Allocate incentives against acceptable policies. Different employees will be paid at different rates, which is normal.  The idea here is not to create a level playing field where everyone gets paid the same amount, but to provide an environment where everyone accepts that the more they are able provide a fully supportive customer environment, the better off everyone will be.  Overall, a percentage of salary as an additional payment against things going well should keep everyone happy.  To begin with, this percentage does not have to be high: educating the employee base as to what they can expect as time goes on should make them aware of both expectations on them and what they may get in the future.
  • Monitor, measure, and report. Ensure that every interaction with a customer is monitored and ensure that the customer can provide feedback – positive and negative.  Gather the feedback together and report this back to all employees so that they can see what is happening.
  • Learn and educate. The previous step will probably reveal where customers are unhappy.  This may not be down to individuals in the organisation or even teams.  It may come down to policies and procedures that need changing.  Do this as soon as possible and ensure that the customer is provided feedback on what has been done – this will keep them happier knowing that you are responding.
  • Monitor progress. As time goes by, are you gaining more customers; are renewal rates improving; are calls to the help desk decreasing?  These KPIs will show how well the approach is going and will then show how profit margins are increasing.
  • Review. The approach will hopefully result in greater lifetime customer value – which will ultimately lead to greater profits for the organisation, greater incentives to the workforce and even lower prices to customers to create a more competitive stance in the market, so enabling greater chances of attracting yet more customers.

Photo: oatawa / Shutterstock

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Clive Longbottom

Posted by Clive Longbottom

Clive Longbottom is a UK-based independent commentator on the impact of technology on organizations and was a co-founder and service director at Quocirca. He has also been an ITC industry analyst for more than 20 years.

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