According to MSPCFO, The largest driver of growth in MRR is not new customers. The largest driver in increased MRR is the growth of existing customers.

Reference:  THIS BLOG POST FROM MSPCFO

Consider this — if only 40% of your growth is going to come from net new business, you absolutely need to be considering how you’re going to keep your current clients and encourage them to make longer and larger commitments to your partnership.

People often begin to consider and plan their client retention strategies near the end of a client engagement.  However, client retention begins far in advance of contract end date.  Some would say that client retention begins the day you make the sale.  I believe client retention begins when your relationship with your prospect begins.  Everything you do, from that moment forward, will contribute to your ability to keep your clients.

So, how do you begin retaining business before you even sign that new business?  We have spent thousands and thousands of calls learning how and why MSPs lose business to their competitors.  Most of the time they don’t lose them over one major incident.  They lose them over a series of let downs over the course of relationship.  You can make your client relationships much closer to poach-proof if you begin from the very beginning.  So, after analyzing hundreds of wins for our clients – the “why” of how we were able to get an appointment in the first place, here  are some of the things MSPs should consider to increase their chances of successful client renewals.

  1. Sign the right kind of business.

I can’t stress this one enough.  You know what environments you work well in.  You know where you shine.  I’ll give you an example from our own experience.  Early on we took on a small project that wasn’t in our wheelhouse.  We were young, and we needed the money.  The project didn’t go well, and the client wasn’t happy.  We not only lost that client, but we lost the trust of the vendor that paid for that project, and it took us years to earn that back.  This is not to say you shouldn’t take on projects that aren’t going to be challenging.  We do this all the time, because we learned lesson number two:

  1. You can learn by doing, but not on my dime.

I was browsing the Reddit MSP boards a few days ago and came across a post where an MSP asked the group if they should they take on a client using a system they weren’t familiar with.  Well, sure you should – but you can’t expect a client to pay you for the honor of being your test subject, and you shouldn’t mislead them as to your level of experience.   If you’re going to take on projects that are a stretch for you, set your prices and your client expectations accordingly.  When we want to take on a new project – say in a foreign market, or in a vertical we have limited experience with – we are honest with our clients about our level of experience, and we offer to share the risk with them.  Be honest and upfront with clients who are out of your comfort zone if you want to take on new kinds of work – and make it worth their while to work with you.

  1. Keep your promises from the very beginning.

When you are prospecting, you set the tone for the entire relationship. When you say you’re going to follow up with a new prospect on Thursday, make sure you do.  If you can’t keep a commitment when you’re wooing me, you likely won’t keep your commitments to me after you’ve cashed my cheque.

  1. Charge appropriately.

Price-focused prospects aren’t loyal. If you want to keep clients for the long haul, work with companies that understand the value of your services and will pay what you’re asking them to.  How much should you charge?  Charge what you need to in order to do the job right, plus whatever margin you want.  Everyone is in business to make a profit.  I am.  I’m not apologetic about it, and you shouldn’t be either.   With the exception of the earlier point on charging less if you don’t know what you’re doing, don’t discount your services to win business.   People buying on price don’t see you as a partner, they see you as a commodity.  In their minds, there is no difference between your services and the service they are currently buying. When yet another company comes along and discounts even further, your services will no longer be required.

  1. Say NO when you need to.

Honor your on-boarding processes, your timelines and your capabilities. If you can’t on-board in two weeks, and the client wants to on-board in two weeks, you have a choice.  You can rush it and potentially mess up, or you can tell them that it’s not possible, set the right expectation and do it correctly.   Your client won’t remember you told them you could maybe do it in two weeks if everything went perfectly, they’ll remember you told them you could do it in two weeks.  Full stop.  Clients who are disappointed from their first interaction with you are clients who begin counting down the days to a relationship with someone else.

6.  Create Consistent Client Experience.

Does everyone answer their phone the same way when a client calls you?  Do you have an SOP around that?  Do your clients know what to expect when a tech comes on-site?  How about when someone calls your support line?  Do you know that Joe in accounting and Susan in HR – who had the same exact issue – received the same exact experience when they contacted your team?  Whether that’s a cheerful voice answering your phone with the right message, or your techs taking someone step by step through the exact same remote support experience,  your user experience should be one that doesn’t leave people frustrated, even if the problem is frustrating.  Your SOPs will make or break customer service experiences and your documentation processes should ensure no company is  frustrated by the same issue twice.

7. Find ways to delight people. Repeat constantly.

It’s not enough to be great at what you do.  Especially in Managed Services.  Most of what you do won’t ever be seen or appreciated by your client.  You need to find ways to keep your name on your prospects or clients mind all the time.  Sponsor their charity events and fun runs and buy their kids girl guide cookies and send treats to their office and hand written thank you notes and and and.  There are so many non-expensive ways to delight people.  We were interviewing for a new vendor this summer.  Company one took several weeks to return my call, because the rep in “my” territory was on vacation.  Rightly so, it was July.  With company two, however, the CEO personally returned my call because his sales rep was on vacation.  He brought donuts to our first meeting, which I didn’t eat, telling him I was on a diet.  The next day a fruit basket showed up at my office.  Delightful!  When rep 1 came back from vacation, he didn’t have a chance.

It doesn’t stop there, however.  You can’t stop wooing.  There is a saying; “Work all of the time like someone else is working 24/7 to take it all away from you.”  This is true!  Your competition is coming for your client roster – it’s the only way to get managed services business now.  There is no land grab left – you’re all just waiting each other out.  Make sure that when your competition calls, your client is still basking in the memory of that last delightful thing you did for them.