Reengineering Customer Success for Managed Service Companies
As service-driven companies, managed service providers (MSPs) need to focus on client retention and happiness over everything else.
However, the desire for new customer acquisition and high deal values sometimes overcomes this priority. That is why the role of customer success (CS) teams in managed services is so important. It forms a robust and sustainable foundation to support the business and unlock positive outcomes for client accounts, which translates into greater profitability for your MSP.
Breaking Down the MSP Customer Experience
The first step to providing a high-quality service is understanding the points in the MSP CX where you need to come in. There are three key processes where customer success teams can make a real difference:
● Pre-onboarding: This stage is considered the bottom of the funnel in the sales pipeline, and the client is somewhere between conversion and the actual sign-up process. The MSP is trying to do two things here: it will convince the client of the benefits of the services and the unique value it brings. Two, it isseekso gather information about the client to help CS nurture and grow the relationship later in the journey.
● Onboarding: This process is an opportunity for MSPs to impress their new clients and is often the initial first-hand experience of the managed services they will receive. Through automation, guided playbooks, 24/7 support, and personalised services, MSPs can create an onboarding experience that “sticks” — i.e., the client doesn’t immediately start looking for alternatives before a period of managed service lock-in can begin.
● Post-onboarding: The relationship right after onboarding can go through turbulence, such as a high number of service tickets, a steep learning curve, etc. These are teething troubles that need handling with the utmost attention. The benchmarks you set regarding speedy response, resolution times, and availability will inform the rest of the customer experience. That’s why CS teams need to be highly active at this stage.
How Customer Success Helps Grow MSP Revenues
In addition to smoothening client onboarding and removing friction in these initial stages, CS teams are central to your continued growth. Managed service providers make a mistake when deprioritising existing CS efforts only in favour of new customer acquisition. Instead, CS teams can help grow managed service revenues by:
● Driving adoption: A great customer success manager can dramatically simplify the solution adoption experience. Clients find it easier to discover and understand new features. There is someone to advocate for the client’s needs; implementation often happens faster when overseen by CS.
● Cross-selling and upselling: Cross-selling and upselling require you to come across as aggressive, which is one of the critical functions of customer success teams in MSPs. They are acutely aware of client’s needs and what new features might address them. They can even help translate hidden needs into technical recommendations for the product team to build new features and services.
● Encouraging renewals: Customer success will work throughout the year, not just when renewal season comes around. It can provide clients with such a value-adding, frictionless experience that they are much more inclined to renew their contracts. The CS manager can identify and resolve SLA issues before they become challenging during renewals.
● Mitigating risk: Managed service providers may sometimes incur a threat to their bottom lines by holding onto specific client contracts. For example, service delivery and scaling costs may outpace the revenues earned. Specific clients may compel the MSP to diversify beyond an economically feasible point. A great CS manager will always have their eye on the ball and help service providers find the right balance.
Key Customer Success Levers for MSPs
To improve customer experiences and establish a scalable customer success function, MSPs need the following levers:
● Automation: There are many ways in which automation can improve the daily service experience for an MSP client. For example, automated chatbots can take over L1 ticket resolution. Automation of observability, monitoring of critical transactions and remediation will lead to better control and command in cloud infrastructure environments. Test automation can also help in software-managed services.
● Stand operating procedures (SOPs): An SOP helps the client transition into the new managed services operating model with minimum friction. It establishes how to transfer work responsibilities, handle tickets of different severity, and execute processes in a repeatable manner. SOPs enforce a degree of standardisation in both metrics and procedures that the client, as well as the MSP, appreciates.
● Teamwork: The human factor behind customer success is critical. By cooperation, we discuss leadership development, team collaboration processes, and continuous training, including onsite rotation for some CS and technical teams.
Betting on CS for Managed Service Providers
Managed service providers were investing heavily in customer success even before the pandemic. Nearly 70% of MSPs had or planned to assemble a dedicated CS team. In 2023, MSPs will be crucial in managing enterprise infrastructure, including the cloud, remote working systems, security defences, and artificial intelligence/data programs.
By recognising the importance of this role and providing CS with the levers they need, managed services can continue to grow even in complex economic conditions. Let me know your thoughts about customer success in the comments below. You can also email me at Arvind@AM-PMAssociates.com.
