5 ways MPS providers can build customer loyalty and reduce churn
Quocirca’s MPS Customer Loyalty Report reveals that 60% of organisations definitely or potentially plan to change providers at the end of their current MPS contract.
MPS market maturity
In a mature and competitive market, managed print service (MPS) providers are facing growing pressure to differentiate their offerings to satisfy the demands and priorities of a customer base whose loyalty to incumbent suppliers is weakening. Providers face challenges on several fronts, both operational and strategic. Persistent supply chain shortages across the technology sector may have affected MPS delivery and fulfilment, particularly new engagements for early-stage MPS adopters. Quocirca research shows these are most likely to consider changing suppliers at the end of their contract. Pandemic-induced changes also continue to impact. Customers now seek MPS engagements that support home and hybrid workers and deliver more valuable digital workflow services. Undoubtedly, the pandemic has prompted re-evaluation of major supplier contracts and greater willingness to move away from the status quo. This represents a risk for MPS providers. They must evolve their current provision to defend their existing customer base and develop novel, diverse services to attract new customers. Clear differentiation around the solutions and services that support today’s agile, hybrid workplaces will be crucial.
Half of MPS customers are very satisfied with contracts
On a superficial level, customers are satisfied with the service delivered by MPS providers. Almost half (47%) say they are very satisfied, while a further 44% are quite satisfied. Levels of satisfaction vary between industry sectors, with finance and retail customers more satisfied than their counterparts in the public sector. Nevertheless, overall, 24% are definitely planning to change providers at the end of their current contract, and a further 36% are potentially planning to change. This indicates that the inertia often surrounding long-term contracts is diminishing. Having had change thrust upon them throughout the pandemic, organisations have grown less change resistant and more open to making decisions that support agility. Quocirca’s research shows that midmarket organisations, for which procurement processes are typically less onerous than those in large businesses, are particularly in favour of changing supplier – 30% confirm that they will change, while 33% say they will potentially do so. Nevertheless, MPS suppliers should not overestimate loyalty among their biggest customers. Although only 18% of large companies will definitely change providers, 40% say they may do so. This should give providers cause for concern.
The MPS satisfaction gap between performance and customer priorities
To identify areas where MPS providers should focus, Quocirca asked organisations to rate their current provider’s performance across a range of areas and the importance of those areas to their business. The results show that MPS providers are close to matching performance with importance in key areas such as improved service quality and reliability, as well as enhanced security. In some areas, such as delivering innovation, improving analytics, and reducing IT staff burden, performance exceeds importance. However, around value-based business goals, such as improving business process efficiency, reducing environmental impact, and reducing consumables costs, services do not match the importance placed on those criteria. Providers offering multi-vendor fleets should also be wary. Those operating a mixed- rather than single-vendor fleet are most likely to change MPS provider, with 40% saying they definitely plan to change and 24% saying they will potentially change. In single-fleet environments only 17% plan a definite change. Complexity in managing mixed fleets may be at the root of this issue, and MPS providers that need to deploy multi-vendor fleets should focus on implementing third-party print management solutions that can standardise user experience across a range of hardware.
Five ways to strengthen customer loyalty
At this critical time, MPS providers need to act strategically to retain existing customers and attract new. These five tactics build loyalty and deliver greater satisfaction:
- Build strategic partnerships. In a mature market, incremental service improvements will not shift customer perceptions. Providers need to offer new and different services such as cloud, business process management, sustainability, and data security. These will require engaging in partnerships with specialists that can contribute to a wider service portfolio.
- Link innovation to outcomes. Providers are exceeding expectations on innovation, but customers are failing to give it the same importance. Providers must focus on developing advanced services that clearly link innovation to business value. They should shift to value- and outcome-based engagements with clear SLA and KPI metrics. Ultimately, MPS can drive business value and lay the foundation for business and digital transformation.
- Leverage analytics to derive deeper customer insight. Providers should use analytics – an area in which they are over-delivering – to gain deeper customer insight and devise propositions that link to buyer business goals, whether these are cloud, sustainability, security, or business process efficiency.
- Future-proof MPS by positioning standardised environments for which hardware portfolios are a good fit. Many organisations are still using multi-vendor printer fleets and/or multi-vendor MPS providers. Approaching these organisations with messages around the benefits of consolidation, optimisation, and a single-supplier contract can encourage them to move to a standardised environment.
- Develop industry specialisms. Providers should consider best-practice playbooks for each industry vertical, identifying what is working in sectors in which customers show the highest satisfaction and lowest propensity to change supplier. They must differentiate with industry solutions and consultancy-led approaches to, for example, discover and optimise.
Find out more in Quocirca’s MPS Customer Loyalty Report.
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