 |
Rob Addy Research Director 3.4 years at Gartner 17 years IT industry. Rob Addy is a research director in Gartner's Technology & Service Provider Research division, focusing on software and hardware support services ...
Why Gartner Analysts Research Events Consulting About Sign In Register Rob AddyA member of the Gartner Blog Network Select a Gartner Site Gartner.
17 years IT industry Rob Addy is a research director in Gartner's Technology & Service Provider Research division, focusing on software and hardware support services across EMEA. Mr. Addy also covers the provision of desktop support services in an outsourcing context within the region ...
Coverage Areas: ? Love is? Never Having to Say You?re Sorry There Are Holes in Your Bucket?by Rob Addy | February 19, 2012 | Submit a CommentMany vendors rely upon their support annuity stream for their very survival. Renewal revenue is also the foundation of growth. Without it, vendors must find and win a continuous flow of new business just to stand still. ?Service stickiness? is a measure of the ability of a provider to retain its customers. Minimising revenue leakage is essential.
Non-renewals mean that vendors must find new business to replace the lost revenue due to customer attrition. Studies have shown that the costs of sale associated with attracting new business are significantly higher than the costs associated with retaining existing customers.
But that?s not all. There are even more potential triggers for non-renewal. Given the previous and following list it?s a wonder we manage to keep any customers at all :
There are no magic pills or silver bullets that can prevent customers cancelling contracts. Providers must diligently deliver the contracted services to satisfy and delight their customers day in and day out if they are to remain loyal. But more than that. They must be seen to be delivering value on an ongoing basis. If the customer sees no value; there is no value!
Whilst there are no fool proof formulae or recipes for achieving ?service stickiness? the following have been observed in the field and often seem to get a good reaction:
It?s always nice to be nice but sometimes it?s as important to be careful. There is much talk of the ethics of locking customers in. Free will is obviously a wonderful thing and we wouldn?t want to eliminate that. But this is a business and we want to be sure to influence the free will of our customers to our advantage as much as is ethically possible. Implementing exit barriers such as the following list can help dissuade customers from making the switch:
Increasing your level of strategic influence within your customer base is crucial. Expanding ones sphere of influence and changing the nature of the conversations that you have with your customers is paramount. This can be done by:
Increased customer dependency is a good thing. If the customer is uncomfortable about thinking of a scenario without you in it then that is fantastic. Customers can be made more dependent in a variety of ways:
The tools and techniques outlined above are only a sample of what can, could, and should be done to improve the stickiness of your support services. Product / Implementation lifecycle plans must also be baked into the plan to accomodate value perception dips in years 2, 3 and 4. There has to be a continuous stream of tangible business benefits and the value must be recognized and accepted by customers if they are to keep the faith.
Alternative Support Providers Analytics Communications competitive advantage Customer Constituencies Customer Experience Customer Perceptions Customer Service Gartner?s Fantasy Football Product Support Squad Gartner Product Support Maturity Scale Hardware Maintenance Internal perception Maintenance Market Perceptions Pre-emptive Predictive Proactive Processes and Methodologies Product Support Reactive Break / Fix Renewals Response Plans role of support self-assessment Service Definitions Software Support Status Updates Stickiness Support support as a weapon Support Consumers Support Quality Support Tax Support Technologies Support Value Chain The Red Kipper Flies at Midnight TRKFAM valued contributor Value Proposition where does support fit in?