Why Offer Support?

C

Collabora

Account Disabled
At first glance that sounds like a crazy question. but let's think about this. Using plain arithmentic, is there anything to be gained by offering support? What if you did not offer support aside from some basic questions?

Let's imagine that all the customers who have submitted real tech support issues left your company and you never received a tech support request. would it be worth it?

Think about it.....
 
Alex - Ezpz said:
Customer satisfaction, customer loyalty.
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Your answer does not address the cost-benefit issue in my question. Its not enough to mention fuzzy niceties like "customer satisfaction" unless you know its actual value.

As long as your stuff is not broken what if you lose every customer that required technical support and kept all the others?

If you are a one man band, what happens to your profit margins when you assign a value to your time and factor that into costs?
 
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Your posts are always interesting to say the least, Collabora.

I cannot imagine buying anything (aside of food and clothing) without making sure I will get technical support if need be.

However, as far as I understood your idea, concentrating efforts on ensuring stable work of the equipment allows saving much time and money usually spent on providing support.

I think this is a worthy idea in case you truly are a hosting guru and can solve any technical issue yourself. Otherwise, paying skilled techs for keeping the equipment alive is vital for your business.

Unfortunately, sh1t does happen, and in our business it can happen really often. Losing clients every time will eventually lead to losing them all for good.
 
I am primarily referring to support that is not due to system/software malfunction or mis-configuration. That will occur from time to time and should be fixed (a support ticket is not required for that -- although you may receive one). I am referring to customer issues.
 
basic questions and answers should be placed in your FAQ or Knowledgebase. This allows clients to look these up without asking for support. If a client does contact you then you can direct them to the relevant KB/FAQ article
 
If you went to a car dealer to buy a new $30k car and the dealer told you we don't offer warranties nor answer any questions you may have after you purchase it.

You go to another dealer that has the same car for the same price that tells you we offer a 100% warranty on it and if you ever have any questions just give us a call.

Which dealer would you buy the car from and which dealer do you think would last the longest and have the most customers?
 
Collabora said:
Your answer does not address the cost-benefit issue in my question. Its not enough to mention fuzzy niceties like "customer satisfaction" unless you know its actual value.

As long as your stuff is not broken what if you lose every customer that required technical support and kept all the others?

If you are a one man band, what happens to your profit margins when you assign a value to your time and factor that into costs?
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That is the thing tho - you cannot precisely measure and put a price tag on it, because its not a straightforward effect. You cannot simply calculate how much money the "supported" clients would be moving away from the company because this does not address side consequences - being noncompetitive when compared to similar companies in the niche, receiving bad reviews from customers which would ultimately lead to lost future sales etc.

In any ways, I cannot imagine how the numbers would look for a really small host (a one-man-show if you wish) but I cannot imagine that lack of customer support would be very beneficial for anyone in this business :rolleyes2
 
For cost benefits, you can charge for technical support based on the level of the issues. Through this way offering technical support would be a lot more beneficial and customers will also think twice before raising tickets, which are out of the SLA.
 
I don't think you would get any new customers if support wasn't available.

That said, support does not always include doing repetitive mundane tasks because the customer cannot be bothered.

Support is explaining how it is done or pointing the customer to the correct resource to learn how it is done.
Once it moves into the "Can you do it for me?" then this becomes chargable work.

Most reasonable customers realise that labour has a cost, so it just a matter of them deciding whether they need to spend their time or their money on the solution.

Should our systems not be working as promised for instance, any support to fix this is of course free, and there's possibly a service credit to be paid for the customer for this lack of service availability.

But if a customer has an issue fixing their php code, debugging, or optimising their MySQL queries, we would manage this on a time and materials basis, where time is paid for upfront having given an estimate.

An hours engineers time is typically 15-30 times more expensive than a customers monthly hosting billl, so it tends to sort out the time wasters from the serious customers.

We believe the robustness of our systems and quality of our work deliver great value to our customers, and for that we deserve to get paid.

If you are looking for an easy life where you never have to engage with customers, but just sit back and take their money, I'm not sure hosting is the business you should be in.
 
Collabora said:
If you are a one man band, what happens to your profit margins when you assign a value to your time and factor that into costs?
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The price of your plans should consist of an element to cover support. I am a one man band and manage to provide support at a good level and still make a profit. support comes in many forms and complexities, so you cant give a value on support.
 
You can't put a value on support until you know what kind of support that is.

If we say that an average customer needs 0.5 hours support per month so add £30 to everyone's account, that will not go down well.

We are a web host, we host your website, we do not develop it for you, but we can help for a price.

If you need help with unix permissions etc, that's a one off 10 minute job, we will not charge you for that.

If you've got a problem that will take 2 hours to fix, we cannot undertake to do that without charge.

If customers want that godaddy / hostgator / justhost price, then they can't expect the Rackspace type service.

We separate the two, you decided if you need both.
 
ughosting said:
You can't put a value on support until you know what kind of support that is.

If we say that an average customer needs 0.5 hours support per month so add £30 to everyone's account, that will not go down well.

We are a web host, we host your website, we do not develop it for you, but we can help for a price.

If you need help with unix permissions etc, that's a one off 10 minute job, we will not charge you for that.

If you've got a problem that will take 2 hours to fix, we cannot undertake to do that without charge.

If customers want that godaddy / hostgator / justhost price, then they can't expect the Rackspace type service.

We separate the two, you decided if you need both.
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i agree, small jobs i tend to do FOC, but anything relating to 3rd party scripts etc. i charge.

I have 1 client who moved to me and then come to me asking how do they change nameservers. I pointed them to our KB article for their registrar which gives simple instructions, they come back to me saying they could not understand them, so could i do it if they gave me access. I said yes i can do that and my rate is £25 a hr with a min. £25. Strange how they come back to me 15 minutes later to say they have managed to do it themselves, on the other hand i have had clients contact me asking me to do some work and just invoice them once i am finished ( not even asking what i charge). I also have some long term clients that have never asked for support
 
Exactly, so why charge the customers who are happy to do thing themselves and just make use of the infrastructure.

Tips and hints and quick jobs are not a problem, but if engineers are spending hours solving customer problems for no money, then you would soon be out business as the day to day jobs of maintenance etc don't get the attention they need!
 
ughosting said:
Exactly, so why charge the customers who are happy to do thing themselves and just make use of the infrastructure.

Tips and hints and quick jobs are not a problem, but if engineers are spending hours solving customer problems for no money, then you would soon be out business as the day to day jobs of maintenance etc don't get the attention they need!
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i find by saying you charge £25 an hour, most clients will try and sort the issue themselves. Personally i think this is a good thing as then clients get to learn how things work rather than having to rely on hosts all the time, which benefits them in the long run.
 
Collabora said:
Your answer does not address the cost-benefit issue in my question. Its not enough to mention fuzzy niceties like "customer satisfaction" unless you know its actual value.

As long as your stuff is not broken what if you lose every customer that required technical support and kept all the others?

If you are a one man band, what happens to your profit margins when you assign a value to your time and factor that into costs?
Click to expand...

You're looking at cost-benefit from a post sales perspective.

This really boils down to what your competition is offering, and in how your services are perceived in that mix.
 
By the same token, I guess ANY service after you've made the sale is overhead.

I think that competent, responsive support gives customers the feeling that they'll be looked after if things go really sideways. Webhosting is victimized by the very thing that makes it successful. If you make software simple enough that anybody can do it, anybody WILL do it. This must create a very confusing state for customers. Basically every company is offering the same thing with a slightly different twist on price. The ones who are offering something truly unique are doing so on technicalities that don't really matter to customers (uh... Cray supercomputer hosting you say? does it send email?)

The people with nothing to lose (i.e. not having to worry about keeping the lights turned on and food on the table through their business venture) must be making it maddening because they can afford to offer service so cheap that customers can't ignore the price.

So I come back around to my original point. In my amateur opinion, support is the X factor between (a) just plugging a box into a blue wire and letting it fly v.s. (b) providing a complete solution that gives a customer some comfort that they've bought from somebody who will solve their business problem through competence and not add to their list of problems through incompetence.
 
Its presumably cheaper to keep a valued customer than it is to acquire a new one.

My point here is that no one seems to have any metrics, as if the slogans of customer service are real measurements. Profit margins are thin. When does keeping a customer cost more than acquiring a new one?

Customer service is important but its not charity either.

Has anyone gone further than copying what others are doing and saying and done some real studies or calculations? For example, assuming you are a one-man band, if you assigned a value of $30/hr to your time what is the cost of customer service and how does that compare to sales revenue.

(I am assuming here that you are paying all your bills with sales revenue and not actually drawing a salary)
 
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It's demonstrably cheaper to keep customers than churn them.

I have a very robust model for quantifying the costs of customer support but it's still insufficient to even start to answer your question. In order to go down that road you have to start making assumptions about customer decision drivers and the model becomes bogged down with subjectivity. i.e. did that customer leave because they found a better deal? Was the better deal including support or not... or just better support? Did support even matter? What did it cost me to support this customer incoming... then what outgoing? Was it the same "team" who provided onboarding support? What does reputation cost and what does potential damage to reputation for bad support cost? etc etc etc.

Your cost drivers are going to be all over the place and not really consistent between any two customers so you'd have to deal with them in aggregate then assume what the costs of a departing customer are and what factors you can link them to.

I don't think there is simple math for this problem. To me the answer to your question looks a lot more like an actuarial table.

If you do get the question answered, let me know because I have other burning questions that will probably share an answer. At top of mind,"how long is a piece of string"? :D
 
Collabora said:
assuming you are a one-man band, if you assigned a value of $30/hr to your time what is the cost of customer service and how does that compare to sales revenue.

(I am assuming here that you are paying all your bills with sales revenue and not actually drawing a salary)
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their you go again assuming how others run their businesses.

I am a one man band and for out of normal support i charge £25 an hour. all my plan prices have a percentage that is a support element. i still manage to pay all my bills, make a profit and take a wage otherwise i would not be doing it.
i also run offline businesses which also make a profit
 
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