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How MSPs Can Boost Profits by Increasing Customer Satisfaction

/ ~ 9 minutes read


According to Invespo, it is five times more expensive to get new customers than retain old ones. Keeping clients becomes crucial, especially when trying to avoid high customer acquisition costs. Here is where customer service plays a vital role. 

Tracking customer satisfaction allows MSPs to measure efficiency and improve retention. A recent study noted that only 38% of MSPs track satisfaction compared to other metrics like profit and revenue. Hence, ensuring your MSP has high customer satisfaction creates a great opportunity not only to increase profits but gain a substantial competitive advantage.

Reasons why MSPs face challenges while improving customer retention

MSPs face distinctive challenges when it comes to satisfying and retaining clients. For instance, an MSP must work harder to help customers as every service gets tailored to them, and no customer needs are similar.

Another challenge MSPs must face is keeping track of what the competitors are offering and for what price. Always offering lower or undervalued prices do not drive maximum profit. Increasing the cost to market value during contract renewal as customers resist can negatively impact satisfaction levels. 

Furthermore, providing high-quality services consistently on time within the specified budget is a big challenge. For example, a cloud MSP delivers services to a wide range of services. To offer such services, an MSP must work with many internal systems, resulting in a multitude of communication and operational complications resulting in inconsistent quality. With automation and investment in management tools, MSPs can deliver good services every time.

Why MSPs should track customer satisfaction 

With a subscription-based model, revenue comes in every month. When satisfaction levels go down, customers stop subscribing, and that directly impacts profitability. Tracking satisfaction helps MSPs identify what improvements to make to retain customers.

A study by Khoros revealed that 83% of customers are loyal to companies who listen and resolve their complaints. Tracking is the only way to stay on top of customer complaint resolution and reduce the churn rate* in the long run. ____________________________________________________________________

*Churn Rate: It is the rate of which customers stop doing business with a specific company.

Invespo found a 60-70% chance to sell to existing customers compared to new customers where there is only a 5-20% chance. So tracking customer satisfaction must be a top priority. In addition, by monitoring, satisfaction MSPs can differentiate themselves from the competition by gaining a loyal customer base.

How to track and improve customer satisfaction

The concept of customer happiness is complex, and every customer has unique needs. It is not as simple as measuring revenue. Given below are a few ways to track satisfaction levels effectively.

Analysing churn rates:  

A churn rate measures the number of customers who stopped subscribing to an MSP's services in a specific time frame. Such a metric can be calculated monthly, quarterly, or yearly. Comparing the churn rates for two consecutive periods can help in finding the satisfaction level. For example, checking how many customers left in July 2019 compared to July 2020 can show if an MSP is retaining existing clients. The lower the churn rate, the higher the satisfaction rate. A report by Deloitte noted that churn rates are as high as 30% among the global markets.

Starting Net Promoter Score (NPS) Program: 

The NPS metric measures customer experience. It indicates whether a customer is happy and willing to suggest your MSP to other peers. The NPS gets calculated by subtracting the number of detractors from the number of customers eager to promote the brand; the higher the score, the better.

How it works is that customers give a rating between 1 (not likely) and 10 (most likely); depending on their answer, respondents get categorized as promoters are enthusiastic and loyal clients (9-10 score), passives are satisfied with the service but not happy enough to promote the brand (7-8), and detractors are dissatisfied customers(1-6 score). 

For instance, 20% of customers are detractors, 20% passive, and 60% promoters. The NPS score would be derived from subtracting the percentage of detractors from the total percentage of promoters (60%-20% = 40%). 

NPS scores help find areas of improvement and allow MSPs to make a better impression on dissatisfied customers.

Customer sentiment analysis: 

With the help of artificial intelligence, it becomes easier to gauge what customers are saying about a brand on social media, email, and chats. It helps in getting an overall picture of how people perceive that specific brand. 

Customer Surveys: 

 It involves asking for feedback right after providing a service in the form of a survey. The survey can be done through email, live chat, or phone call. The best way to ask for feedback is not to make it the main objective but to ask for it after resolving an issue or introducing a new helpful feature. Above all, ensure it doesn't take too much of your client's time.

When trying to improve, it is essential to consider customer feedback. For instance, if a customer feels tech support is not responding quickly or at all, it requires working with the team to improve it.

Updating and evolving to customer needs is necessary to exceed expectations. For example, if they require or ask for features that you don't yet offer, it's time to add such elements for company growth.

Furthermore, It's important to constantly engage with your clients about any issues or expectations they might have. A study by Hubspot noted that 90% of consumers consider a quick response for customer service-based questions, and 60% believe short to be 10 minutes or less.

5 strategies to increase customer retention 

According to Bain and Company, increasing customer retention rates by 5% can increase profit by more than 25%. Below are five main strategies to help you improve customer retention: 

  •  Create visible Value:

 In the beginning, customers of MSPs understand the value as they can avoid significant upfront capital costs through software-as-a-service agreements. However, over time, even the monthly subscription will not hold the same value it did at the start. When renewing their subscription, most clients tend to ask for a decrease in monthly price or pay the same fee for more added services. 

By sending monthly reports that highlight ROI returns of customers creates visually consistent value. Additionally, reviewing such reports with primary stakeholders to ensure they get the message.

  •  Improving KPIs related to customer service: 

 Key performance indicators (KPI) are the measurable values that help companies gauge whether they are meeting their business goals. It acts like a roadmap to visualize the future and which direction for a business to move forward. By carefully ana KPIs, MSPs can understand when customers are happy or unhappy. For example, metrics like lifetime value and NPS can help in tracking satisfaction.

  • Creating Communication Calendar: 

A communication calendar helps in staying connected with customers regularly. The calendar would program sequences of events like phone calls, emails, customized offers, and even handwritten notes and send them to customers through automation software. Many companies already use marketing automation to communicate with customers.

  • Overdeliver promises: 

Promises raise customer expectations, and if MSPs do not deliver on the customers will get annoyed and unsatisfied. For instance, if you promise to provide a service in 20 minutes rather than offer it 5 minutes later, customers would complain as if it was an hour late. A study by displayed that when a customer is unhappy, they are likely to tell twenty more people about it, which could tarnish reputations. Therefore, it is better to underpromise and over-deliver.

  • Building trustworthy relationships: 

Building trust and business relationships take time, but consistently providing high-quality services is a good start. Trust is fragile, and instant customers lose trust; they tend to switch to competitors. Using customer behavior data to deliver value to products and services is very helpful. It is good to be diligent with trust as nothing drives customers away like a bad experience.    

Customer retention: use cases for automation

Marketing Automation ensures all customer touchpoints are relevant and time-specific, which prolongs customer retention. Such automation software allows messages to get sent to the right people through the most effective channel. Below are two use cases of automation in improving customer retention:

1. Feedback: 

Collecting customer feedback plays an essential role in the long-term growth strategy. Using automation here can make the whole process more efficient and quick. For example, collecting feedback manually takes longer, and there is a possibility to miss friction points and risk losing a customer.

It works by automating the feedback loop, considering which points you want to check in with clients, schedule feedback requests after those check-in times with added context where relevant. Additionally, it can analyze feedback and derive insight automatically.

Furthermore, neutral or negative responses to feedback must trigger a notification to the customer success representative to take over and resolve issues or reply to a review to improve satisfaction level.

2. Onboarding customers: 

The onboarding process of customers is vital, and an automated welcome email series can reduce any perceived risk in an MSP workflow. It also allows customers to remember an MSP just before the actual project begins.

According to a 2021 study, almost half of the customers left an MSP feeling less appreciated. Therefore, onboarding is a valuable process in appreciating customers and ensuring constant engagement. By scheduling, email helps in never missing an excellent chance to stay engaged with customers.


Automation helps in staying in touch with your customers and ensures a high level of retention. ElectroNeek's automation solutions can help MSPs

  • Reduce churn rate.
  • Effectively engage management across different platforms.
  • Seamlessly connect with customers on various channels.
  • Guarantee higher return on Investment.
  • Better analyze customer service metrics.

The platform allows room for flexibility and customization for your MSPs' marketing and customer retention needs. If interested to know more, please contact our expert team.

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