how to keep the customer

© 2016 Information Services Group, Inc. All Rights Reserved.

Retention as a Growth StrategyHow to Keep the Customer

Lisa Borden

© 2016 Information Services Group, Inc. All Rights Reserved 33

Methodology

182 deals from the past 24-36 months

All deals involved the incumbent Data comes from ISG advisors

Client DataDeal Data

85 accounts reviewed in detail Results encompass 18 unique

service providers Data comes from clients


Incumbency is not the advantage it once was.

Sole source 34%

Competitive

renegotiation

66%

• Deals are smaller. • Transition risk is lower. • Choice is increasing. • Capability is changing rapidly. • Incumbent lost 47% of the

time.182 deals


What triggers a competitive renegotiation?

Secure better contract

Change in scope

Better market capability

Poor service provider relationship

Incumbent poor performance

Secure better commercials

9%

10%

13%

15%

24%

29% They are not delivering value for money. We are

not getting the services we paid for.

“ “The service provider is not

delivering on our basic requirements. We should just rip up the contract and start

again.

“ “


Secure better contract

Change in scope

Better market capability

Poor service provider relationship

Incumbent poor performance

Secure better commercials

9%

10%

13%

15%

24%

29%

What determines the outcome?We have no evidence that the incumbent could move

into the new world. They had five years to do this and

didn’t.

“ “I am surprised they let it

come to this. We have been able to learn a lot about the skills and capabilities that

others have.

“ “23%

18%

14%

30%

6%

4%


Client perspective: engagement lifecycle

Transition Stabilization Maturity through to renewal

Time

Clie

nt sa

tisfa

ction

Manage expectations

Manage transition closely

Deal signing

Stabilize services quickly

12

3

Client expectations

Typical client satisfaction during lifecycle


TimeTransition Stabilization Maturity through to renewal

Clie

nt sa

tisfa

ction

Deal signing

Incumbency: an asset or a liability?

They came to renewal promising all these enhancements. We

wondered why we didn’t see any of this thinking in the previous

four years.

““

Incumbency is an advantage

Incumbency can

become a liability


The evidence is compelling.

Client expectations

Typical client satisfaction during lifecycle

Transition Stabilization Maturity through to renewal Time

Clie

nt sa

tisfa

ction

Deal

Strong CI91% retention

Limited CI50% retention

Poor CI24% retention


Elements of a successful retention strategy

Mid-contract 12-18 months to renewal

• Start immediately.• Think incrementally.• Learn about the

business.• Package it. Deliver it.

Measure it. Advertise it

• Present thought leadership.

• Present advanced capabilities.

• Share client case studies.

• Pilot change.


Begin retention strategies early.Mid contract 12-24 months to

renewal6-12 months to

renewalDon't become apathetic, slip into a steady state and not

bring new energy and thought leadership to the

account. - Advisor

Services have been stable for a while. Now I want to see them deliver some of the

innovation and value add we need. – Client

Now, in the current contract term, is the time to try and prove your future capability

through innovative activities.- Advisor

Things always lift before contract expiry, but we know that it won’t last. We should have been getting value add

far earlier.- Client

Don't promise the world for an extension. You should

have already been laying the foundation for it.

- Advisor

They should be looking at the evolution of technology,

the market and their own capacity, and telling us about

it. It’s now or never.

- Client


Summary

1.Incumbency is an advantage, but it has a limited shelf-life.2.Do not squander the opportunity, or incumbency will

quickly become a liability. 3.Invest mid-contract to optimize the advantage of

incumbency

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