The Hotline Magazine
The Redefinition of Customer Support
The SaaS & Success Project

Thursday September 9, 2010




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From “Free” to “Fee” – The Challenge of Unbundling Support

Amongst the common challenges that all companies and their customer contact centers face as they mature, one of the most serious is the transition from "free" to "fee" based support services. During an Office Hours conversation, a CEO from an established software house stated the problem succinctly: "For some years now, I've been bundling some of my support costs into the price of my software product and then charging an annual maintenance fee for support & upgrades. But I've never been sure

More on page 106

A Litmus Test for Customer Centricity

The decision to transform a company, to recode its essential DNA for customer centricity, is not something to be considered lightly. The shift is not about changing what you do or merely improving how fast you do it for your customers; true customer centricity begins with the very definition of who you are and why as a company. The effects of such a profound reinvention of company identity necessarily will be global, touching every aspect and level of the organization's strategy, process, people

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Aligning with the SaaS/Cloud Profits-Realization Strategy

In the traditional perpetual-license model of selling software, the manufacturer takes the majority of their profit up front from the sale of the licenses. In the Software As A Service subscription model, that large up-front influx of revenue and profit goes away, replaced by a more predictable monthly membership arrangement. SaaS profit is realized incrementally instead of all at once. There are variances -- some manufacturers require a 12-month commitment and payment in advance while others do

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SaaS/Cloud: Tsunamis Are Not Small Things

I had a conversation with the CEO of one of my oldest software manufacturer clients. He's a veteran, having successfully weathered a number of industry changes over the years with his company, but he made a comment that concerned me. "We can go SaaS at any time," he said. "We've got the code already revised and in place, so it won't be a big deal if we decide to offer that model." Unfortunately, the reports of those who have undertaken the journey to SaaS show that it will be a big deal, and the

More on page 101

SaaS/Cloud & The Future of Customer Support

CEO's of SaaS companies are beginning to notice a couple of vital aspects of their customer support operations. Their first wake-up call is the realization that they can't afford to staff their support team in the traditional way. The economics of an incremental income stream profits-realization model has no room for a cost-center support operation. The second realization is that they don't need as much of a support team. But in the space between those two realizations, there is a significant ri

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By Mikael Blaisdell
Part of Series

I’ve been reviewing position announcements posted on LinkedIn and other services seeking potential employees for customer support roles. The typical job description is explicit. VP or Director of Customer Support/Service/Care. Must have 5-10 years experience in all aspects of technical support operations. Must have [insert technical expertise details.] We are a startup On-Demand software company, and you will be responsible for building our Customer Support team from the ground up, etc.

Major Concerns

There are some major concerns in the above position requirements. First, there aren’t any available candidates with 10 years’ experience in running a customer support contact center for a SaaS firm because SaaS hasn’t been around that long. Therefore, the people who meet the time length requirement will be those that have run support departments in traditional perpetual-license companies. Will they be able to make the transition to the SaaS/Cloud world? Or will they expect to recreate what they know from the old model and impose it upon the new? With all that the SaaS community has come to understand about trying to turn traditional model organizations and individuals into SaaS players, such an expectation is a recipe for disappointment.

Second, the next questionable requirement is the technological expertise specifications. While fluency in a particular technology may be useful in communicating with customers, SaaS is supposed to be about selling productivity and value from a service rather than technology for its own sake. It is seldom that a good technologist turns out to be equally valuable in coaching customers in how to obtain increased productivity. The skills that make an individual a good break/fix technician are not the same that are needed for effective management of a customer support contact center for a SaaS company — or even for a perpetual license software manufacturer.

Next, hiring a builder to construct your house based only on what they’ve done in building other people’s homes is risky. There are three separate and different skill sets involved in a successful custom home project, those of the Architect & designer, the Builder, and what will be needed for property maintenance afterwards. While there are people who can do all three, such people are uncommon — and they generally prefer to specialize in one.

It might seem appropriate to look for a candidate with a good background in professional services, but that expertise may not be exactly what will be most needed for an on-demand software company. In traditional model technology manufacturers, the Professional Services group is about implementation. While such can be very profitable, it is also heavily transaction-oriented rather than being based in the maintenance of a mutually profitable long term relationship structured around an income stream profit realization strategy.

SaaS is a different model, and the difference, the SaaS DNA, must be consistently expressed in every department of the company and on every level. The success of an On Demand organization depends on hiring the right people for each role, who are SaaS players throughout. They won’t be found by searches using old model specifications.

Series Table of Contents