Rampant Referrals for MSPs – Part 3

Recap from last Time.
Last time we saw that to complement the statistics we saw in session 1, the main benefits to MSP owners for optimising referrals were identified within the categories of :

– Cost (or lack of it)
– Feedback (both internally and externally)
– Trust – we looked at all the stakeholders along the trust-train.
– Morale – we finished off looking at reviews and referrals in terms of recruiting and retaining your most important asset – i.e. your talent.

In this section, we’ll look at how referrals can be sabotaged. In my experience, this falls broadly into five separate categories, namely Service, Motivation, Personality, Environment and Communication, so let’s look at these in turn.

Service Sabotage

The reason I’ve started with service is because of course your service is the fundamental aspect of your business that people rely on. You’re in the service industry, which means that people need, want and expect just that – service. But they won’t necessarily tell you if they don’t get it. In fact, there’s one well-cited study (it was from Forbes I believe) which found that 96% of people would leave a supplier if they were unhappy with the service. Okay, perhaps that’s not that shocking because of course people will leave if they’re unhappy. Yet the same study also found that 91% of clients won’t tell you if they’re unhappy with their service – they’ll just leave you and go somewhere else.

Think about that for a moment … 91% of people won’t tell you if they’re unhappy, according to that study!  But you can bet they’ll be willing to tell other people – in fact around 15 other people according to some sources. Imagine you’re a restaurant owner. Customers come in and try your food and because we’re all very polite, we don’t want to cause a scene or hurt people’s feelings, and so 96% of us will leave that restaurant due to bad service and 91% of of us won’t even tell the restaurant-owner or staff that we were unhappy with them. But then off we go and tell 15 of our friends.

Well, there it is, that’s what we’re up against. That’s why making sure your service is excellent and not only that it has to be seen to be excellent too – and these are of course two slightly different issues which people forget.

I think it’s fair to say that being good at what you do is a pretty fundamental aspect of being in business. As an aside, when I speak to most MSP owners and ask if they have a USP, their typical reply is along the lines that their customers really relate to them and that they’re better than most of their competition. These are not a USPs of course, they’re simply the entry price of the ticket to the party but that’s a conversation for another day. I’ve yet to hear the owner of a business say that they’re not very good and they hope nobody finds out and that most of their clients hate them. Funnily enough it never crops up in conversation! So, let’s just assume that being good at what you do is taken as standard.

So, just to reiterate for the sake of getting the point across, there’s a difference between being good at what you do and making sure your clients see and hear that you’re good at what you. However, we’ll cover that in the section about communication-sabotage.

So, if everyone has the opinion that they’re good at what they do and that they’re better than average, then where is the average MSP hiding out? The answer is the same place that the ugly babies hang out, because of course there must be ugly babies out there (but not our own of course, it’s always someone else’s)!

We’ve already covered the Dunning-Kruger Effect where we have a cognitive bias in which people with limited knowledge or competence in a domain overestimate their own ability, while those with more expertise underestimate it.

But this is just one bias out of dozens; there’s Illusory Superiority (or ‘above average’ effect), then there’s Confirmation Bias, Hindsight Bias, Anchoring Bias, Availability Heuristic, Attribution Bias … the list is a very long one with literally dozens and dozens of effects and prejudices and biases. Don’t forget that’s just for those people who are largely unaware of their own blind-spots, let alone those staff members who are wilfully sabotaging their work … it’s a wonder anyone ever gets anything done!

Okay, so if we all think we’re above average then how can we see the reality of our service levels because if we can’t trust our own senses and our own thoughts, then what can we do? This is where numbers come in handy because they deal in absolutes. I know we probably live in an infinite universe and there’s life on other planets and we could all be part of some great hologram and I’m not really here and so forth. But here’s the thing; even if we’re all in someone else’s dream, I simply cannot conceive of a reality where 2 plus 2 doesn’t equal 4. Pi (π) will always be the ratio of a circle’s circumference to its diameter because otherwise the circle isn’t a circle.

So, numbers, like facts,  are a form of truth and that’s because in and of themselves, they can’t lie. But somewhere between the raw numbers at the source at one end all the way through to (say) political statistics  and the interpretation of what they mean, we have a vast gulf of possibilities. So for the purposes of service-satisfaction, I think it’s important to keep it as clear and simple and unadulterated as possible. Remember that when I start rabbiting on about feedback scores such CSAT and Net Promoter scores later.

So, we know that on an individual level, people have countless biases whereby they think that their skills and abilities and outputs are better than they are and so we need to guard against it with objective feedback and data. And that’s exactly the same when it comes to people working on a team level or organisational level, so let’s have a look at some of these :

No benchmarking at all. This is directly in line with what I’ve just said about the need for feedback processes. If you don’t have any numbers in place or any controls apart from a general feeling, then you’re flying blind and hoping for the best.

Benchmarking Against Weak Competitors: If a company only compares itself to weaker competitors, it may think its service is superior, without recognising areas for improvement or acknowledging stronger competitors.

You’ll probably appreciate this from a different (but better known) perspective. If you tend to regularly play golf or tennis or chess or whatever with your friend (or friends) and they’re a bit worse than you, then perhaps you’ll soon enough find it a bit dull or not challenging enough.

Equally if you play against people who are better than you, you’ll find it more difficult, yet much, much more rewarding when you win. Of course, (once again) we might not say anything out loud for fear of being seen to be obnoxious. Not that I’m personally crippled with modesty myself because whenever I catch more trout that my friend, I’ll cheerfully crow about it for what I’m sure seems like forever afterwards, however I digress. If you keep scores in your business – and you should – then it pays to benchmark yourself against other people that can pull you up rather than those who drag you down, as the saying goes. Hopefully, that’s where MKLINK can help our MSP members.

Misinterpretation of Success Metrics: Companies might focus on metrics that reflect well on them (such as the number-of-services-sold or short-term customer satisfaction (like a CSAT score) while neglecting more critical, long-term metrics like customer retention or lifetime value or NET promoter score or referral rate.

Keeping metrics is all very well but technical people can very often be focussed on technical things because that’s what they like. But the trouble is, whatever business you think you’re in, the fact is that you’re in the people business. This used to make me laugh when I used to work for an ISP back in the nineties. They’d cheerfully promote the fact their customers’ websites would have an uptime of 99.5 %. But what they didn’t tell people – unsurprisingly – was that their engineers never got to work before 10.00 in the morning and the lead techie was smug and used to frustrate the clients so that they’d hate dealing with him and I’d have to end up dealing with some of the service calls. In short, they were looking through the wrong end of the telescope when it came to their numbers.

We’ll look at some simple numbers later on in this series around customer-feedback but for next time, we’ll finish off with how MSPs are self-sabotaging their referrals in terms of the service component.