Successful customers remain loyal due to the more value they achieve from the incumbent service. Gartner research shows that a customer success practice is valued for helping show the full value of a product and service. In addition, enterprises value customer success managers for creating a closer relationship that drives the relationship above. Hence, a traditional customer support practice won’t be enough to retain future customers. Above all, a transactional and reactive approach to client engagement results in a high cost of sales and is inefficient. As a result, managed service provider (MSP) must establish a customer success mindset and lead with continuous innovation to keep clients engaged in the long run.
Clients Start Engaging Differently With MSPs
While supporting their digital business initiatives, more and more enterprise buyers are moving their engagement approaches with managed infrastructure service providers toward transformational outsourcing, and agile workshop-based selection process rather than traditional RFPs. (see “Infrastructure Managed Service Providers Must Lead With Innovation and Co-Creation to Convince Enterprises Who Shift to Agile Infrastructure Deals“) The reason behind this is that the problems being solved are tough and clients themselves do not know what the right solutions are. Hence, they utilize co-creation to get provider input in designing the solutions. Since these are high-value business problems, clients want providers to contract in a different way — for business outcomes. While this shift in selection process creates a challenge for MSPs that are only reacting to the market, it also opens a large opportunity for MSPs that are changing their habits and engagement approaches.
Digital Business Transformation Is Entering a More Challenging Phase
Digital business transformation is entering a more challenging, urgency-driven phase. Business leaders feel the ever-expanding pressure to provide customers with digital solutions. As part of this transformation, enterprises have many drivers for utilizing an MSP:
- They may already rely on the technology capabilities of a service provider and want to exploit the additional capabilities available.
- They may be looking for continuous innovation delivered by the service provider rather than just managing an infrastructure environment.
- They may know they have a digital business problem and need advice on the best technology solution to deploy.
The solution process for a digital business solution becomes more agile and business-outcome-driven rather than a standard one-size-fits-all, out-of-the box solution. Hence, enterprises are looking for a close association with service providers to co-create new use cases and the related infrastructure environments.
On top of that, Gartner observes three key market dynamics among MSPs:
- The trend of enterprises engaging a “do-everything” MSP continues to grow.
- Budgeting of professional services is shifting to more long-term spend.
- The leading MSPs are investing heavily in professional services development for their teams.
Hence, leading MSPs already provide more than only operations of customer infrastructure environments. (see “Infrastructure MSPs That Only Offer Operational Management of Internal Enterprise IT Environments Will Fail to Grow“) But while this is just the foundational element for an MSP to create a continuous and proactive engagement process, establishing a customer success mindset is critical to execute and deliver on this process successfully.
Customer support is a well-known discipline in service provider organizations, making sure to be more customer-centric and provide better customer experiences. Still, despite varied investments in customer service technologies, many MSPs struggle to maintain a holistic customer experience, employee engagement and operational excellence.
Customer success is still not a well-established practice across MSPs. The basic idea of customer success is quite simple: The product or service should not only satisfy the customer but make the customer demonstrably more successful. MSPs should actively support the customer in making the best use of their service in order to achieve individually agreed-upon goals.
In our research note “How MSP Tech CEOs Drive Customer Success Through Continuous Engagement and Innovation” we discuss the key market trends that MSP tech CEOs must consider for their customer engagement strategies to adapt to changing customer requirements, win modern outsourcing deals and keep clients engaged in the long run.
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