Blog to share our thoughts
Does customer satisfaction equal customer retention?
Published: 30 April 2018
Net Promoter Score (NPS) measures the willingness of customers to recommend you to their friends; overall measuring their satisfaction of the service that you’re providing. Based on a scale from -100 to 100, scores higher than 0 are considered good and scores above 50 are considered excellent.
As the Service Provider market continues to battle commoditisation; customer loyalty, satisfaction and retention rates are harder to maintain. As a Managed Service Provider (MSP) it’s in your best interest to understand why your customers are dissatisfied and address the necessary problems before they make the decision to go elsewhere.
Despite NPS still being widely used in the technology industry, especially by some of the biggest players such as Cisco and IBM, there’s dispute as to whether it’s an accurate measure of customer retention. Whilst a low NPS is a cause for concern, having a high score isn’t necessarily all good news, because even though customer satisfaction is vital, it’s not always enough to guarantee customer retention. Customers can be satisfied with your service, without thinking that’s it’s extraordinary or differentiated, and someone saying they would recommend your business is very different to them actually acting upon that recommendation.
Impressing and satisfying the influencers and decision makers is what matters the most. Executives that have the final say on whether to use your service rarely participate in NPS surveys - therefore reaching them and giving them a consistently excellent customer experience is a better way to achieve higher retention rates.
Tools that help give the right impression of your service and service delivery are key to managing perceptions and reaching these decision makers directly. They want responsive delivery, responsive applications that don’t make them wait, responsive networks that support high performance, business-critical applications, and responsive support people. When issues arise, they want them resolved quickly.
The value of your service needs to be demonstrated. Many tools hide information away from business-level users, who need to see and understand it to appreciate the quality of service you’re delivering. Impressing network engineers and IT operatives isn’t going to lead to renewals if nobody in a decision-making capacity knows about it.
So, as effective and precious as word of mouth recommendations are, for people to actually recommend you to their friends you have to be delivering something reliably remarkable – and ensuring that people at the right level know you’re doing that. In the business world, users and recommenders are often not decision makers. Bridging that gap, and communicating the quality of your service to people who might not actually be using it, should be a priority.
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