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Forrester Exec: Strong Customer Experience Vital to Growing Revenue, Cutting Service Costs

MSPs can cut costs, charge more, and strengthen their brand preference by investing in customer experience, according to Forrester Research Vice President Harley Manning.

MSPs can cut costs, charge more, and strengthen their brand preference by investing in customer experience, according to a leading IT research firm.

Customer experience has grown increasingly important in recent years thanks to the rise of social media, an increased rate of technology change and a lack of control over the flow of information, according to Harley Manning, vice president and research director at Cambridge, Mass.-based Forrester Research.

"Customer experience drives revenue when customer loyalty drives revenue," Manning said Tuesday during an Autotask Community Live 2016 keynote address. "Customer experience can also drive a willingness to pay a price premium."

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Manning told more than 900 people in Hollywood, Fla., that institutions decades ago had the bulk of the power thanks to greater control over pricing, the flow and information and where consumers can get products or services. Nowadays, though, Manning said technology has swung that pendulum firmly in the direction of customers.

Companies with superior customer experience grow their revenue faster, lower their service costs, achieve greater pricing power and reduce risks around regulatory compliance, Forrester research found. A superior customer experience also improves retention rates and increasingly the likelihood of having current clients recommend you to others, Manning said.

For instance, Lincolnshire, Ill.-based CDW, No. 5 on the 2016 CRN Solution Provider 500, increased incremental revenue by $230 million in a single year simply by following up on sales leads identified through customer loyalty surveys, Manning said.

Customer experience is most relevant in situations where clients can easily shift their business among competitors and where there's a clear differentiation between companies with superior customer services and companies with inferior customer service, Manning said. As customer experience strengthens, Manning said the percentage of clients willing to pay a price premium increases.

In the event a customer has a negative experience, Manning said that best thing a company can do is apologize, fix the problem quickly and be pleasant to the person making the complaint.

In addition to boosting brand preference and trust, Manning said an improved customer experience can reduce the cost of service.

A couple of years ago, former Cisco CEO John Chambers realized the San Jose, Calif.-based company was making it difficult for customers to do business with them. After collecting extensive customer feedback, Manning said Cisco fixed access and navigation issues on its support website, made ordering rules and platforms consistent, and sped up invoicing by making difficult-to-find tools more visible.


Thanks to those changes, Cisco was able to resolve 81 percent of its technical support issues online, Manning said, saving the company at least $750 million each year.

Employee satisfaction is a leader indicator of customer experience, so Manning urged MSPs to log onto Glassdoor and check out reviews of their company.

"If your employees are talking smack about you, your customer experience probably isn't as good as you want it to be," Manning said.

Mapping out the client's journey is one of the best ways to improve customer experience ratings, Manning said. MSPs can create a great customer experience by delineating what in the sales process is wholly visible to the client and what's taking place completely behind the scenes, Manning said.

Too often, Manning there are discrepancies between how those in the back office would assess the buying process versus how those who are directly interacting with customers would assess the buying process. The quality of the installation process is the single biggest factor in determining whether or not a customer will come back for repeat business, Manning said.

Companies should get high-level directors engaged in each stage of the buyer's journey to ensure customer expectations are being met and correct any problems that might arise, Manning said.

Gennix hopes to begin doing journey mapping and pay closer attention to and better analyze what clients are saying to improve the company's performance, according to Director of Client Services Erik Edge.

Edge said Manning's remarks provided a practical take-home lesson for the Langley, British Columbia-based Autotask partner. He anticipates that Gennix will adopt some of Manning's suggested practices.

"Sometimes you might like to," Edge said, "but you can't ignore your clients."

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