High renewal rates are the lifeblood of managed services providers and quality firms understand that customer satisfaction often means the difference between growing revenue or losing clients to their competition.

But determining how happy existing customers are with a business’ performance is a problem as old as commerce itself and has been a subject of debate for nearly as long.

Given the stakes, some MSPs are embracing the Net Promoter Score (NPS) approach, forsaking lengthy and time-consuming questionnaires in favor of a system that asks a single question: “How likely is it that you would recommend our company to a friend or colleague?”

Respondents provide scores from 0-10, which are grouped to generate a firm’s NPS.

“Our entire existence is grounded in a great customer experience,” said Martin Gossen, healthcare practice lead for managed services provider Synoptek, which recently adopted the NPS measurement framework. 

“Without a methodology, we are running blind as it relates to understanding how well we are performing,” he told MSPmentor. “We cannot assume or guess that we have a real handle on how good or bad a job we might be doing.”

For MSPs seeking to increase revenue through lucrative subscription pricing models, brand loyalty is a vital component, made all the more important in an era of public social media feedback by customers.

“Your brand means more than cost to many of them, as they want their businesses to be running, worry-free,” Dr. Prasad Akella wrote in a blog post for ChannelPro Network. “Successful MSPs focus their management team on building the customer experience and a trustworthy brand in the market.”

Constant measurement of customer satisfaction is a key component of an effective MSP brand development strategy.

“Such programs ... help them identify and proactively address issues, so they can continually improve their customer's experience with their service,” Akella wrote.

NPS was introduced in a 2004 Harvard Business Review article by Fred Reichheld, which asserted a proven link between increasing scores and a firm’s success.

“Extensive research has shown that your (NPS) acts as a leading indicator of growth,” according to a website for the Net Promoter Network, an advocacy group for NPS.  “If your organization’s NPS is higher than those of your competitors, you will likely outperform the market, and managing your organization to improve NPS will also improve your business performance.”

At Synoptek, managers used the initial NPS measurements to establish a baseline, then set specific performance goals throughout the company aimed at increasing the score.

“We like the MPS model because it allows us to assign very specific tasks to everyone in our company,” Gossen said. “Everyone has a role. It makes us accountable to increase that NPS metric.”

Send tips and news to MSPmentorNews@Penton.com.