For generations of customers and customer support representatives alike, the experience of trying to work together to resolve a problem over a phone line has often been extremely frustrating and unsatisfactory even when ultimately successful. I remember countless episodes from my own days many years ago as a support rep, telling customers “Now enter this command, and then tell me what the screen shows.” Unfortunately, in far too many centers, these costly and difficult conversations are still going on today. The inefficient communication means that the case will inevitably take much longer to resolve. Worse, the chances for failure are also much higher. The result is substantial amounts of unnecessary wasted time, confusion, expense and frustration. Fortunately, there is an effective solution to this problem.
There are vital clues and indications in the search strings that bring readers to The HotLine Magazine from around the world every day. “What is the Definition of Customer Support?” “What is the profitability of customer retention?” “Define the SaaS support model.” “Usual customer retention rate for a SaaS company?” “How to profit from SaaS support?” All of these are indicators of the same fundamental problem. Every so often, an inquiry comes along that goes to the heart of the issue and begs for an immediate reply. “Fixing a broken customer support group” is a perfect example, prompting two immediate questions in return. What do you mean by “broken?” And how would you define “fixing?” Almost invariably, the source of serious problems with a customer support group is external to the group itself; they are inevitably strategic errors. Until the senior management team and the support executive or manager understand each other, and work together, producing a truly effective and lasting resolution for the broken group is unfortunately unlikely.
There is a tendency for some SaaS/Cloud vendors to think that Customer Support is the same as it was in the traditional sector, only with less demand and therefore a significantly lower staff. The core of that misperception is that Support is an unfortunately necessary evil, the group that only deals with problems resulting from breaks and interruptions in service after they occur. That’s a serious mistake for a company to make. The result is substantial losses from overlooked revenues, lower customer retention rates and wasteful utilization of expensive human resources within the organization. But if treating Support as an old-model reactive break/fix cost center is not the way to win in the new era, what is? The first step is to completely redefine the role of Support. The second is to align your organizational structure and management metrics for Customer Success.
Preliminary results from The SaaS & Support Project’s 2010 research show that some aspects of the software industry haven’t changed much despite the accelerating shift to SaaS. In the 1st survey for the year, TSSP participants are asked to rate the level of importance to a range of issues. “Managing Customer Relationships in a Cost-Effective Manner” is being overwhelmingly rated as of “Critical” concern both by all respondents and specifically by SaaS-only companies as well. When asked to identify how their customer support teams were chartered, nearly half across the board are saying that theirs were set up as cost centers, with another significant bloc of companies landing in the “Not Sure or It’s Complicated” camp. Less than 25% of the respondents so far have indicated that they run their customer support teams on a Profit-center basis. But regardless of business model and accounting status, the responses indicate that a serious problem which has plagued the industry all along is still with us. Two thirds of respondents say their need for a method for calculating the costs of providing support is either Critical or Serious. How can a company authentically determine its return on customer retention without accurately knowing the costs?
As the SaaS tsunami continues to roll out at a dizzying pace, staying current on developments is a considerable challenge for people in all sectors of the SaaS/Cloud community. One of the best sources I’ve found for vision, information and ideas throughout my career has been the quiet conversations that happen at well-run industry conferences. Yes, travel budgets are tight and the time is a concern — but you hear things at those events long before they appear on the web or in other news outlets. For the past several years, there have been a handful of such gatherings on my personal “must attend” list, and the SaaS Summit event has always been at the top of the page. Now renamed “All About The Cloud” and produced in association with the Software & Information Industry Association, this fast-approaching conference in San Francisco should not be missed.