The FT Word
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to the November 2002 edition of the FT Word. Please pass it on to a colleague or two so they can have a chance to keep up with the wonderful world of support.
In this month’s issue:
· What percentage of the overall support budget should be spent on compensation?
· Exceeding customers’ expectations
· Special “pick 3” prices for FT Works booklets
What percentage of my budget should I spend on compensation?
In times of fiscal tightening, it quickly becomes obvious that people costs are a large proportion of support center budgets. So what’s a “typical” percentage for compensation costs? This is a common question I get from clients.
Depending on what’s included in the support budget, compensation costs may range from 60 to 90%. If the budget includes all costs including IT costs, rent, and overhead, the compensation percentage will be lower. And if IT and other overhead costs are accounted for separately in a shared account, as in common in smaller companies, the percentage will be higher.
I would question very high percentages: if compensation add up to more than 90% of the overall budget, then how are you training support staff? Providing them with appropriate equipment? And I would also question very low percentages: what are you spending non-compensation money on? Can you cut down on equipment? Travel? Perhaps you are counting outsourcing money as non-compensation? (This may not be such a good idea, think about it!) Are you seeing large cross-charges for IT services and the like? If so, what can you do to minimize them?
Actually, the real issue is not what percentage of the budget should be devoted to compensation. A much more useful strategy is to calculate your cost per case. Is it going up or down? Is it in line with comparable centers (that is, centers that support similar-complexity products)? And an even better approach is to calculate your cost per customer, since a low cost per case is pretty irrelevant if customers create loads of them. The cost per customer properly captures a meaningful cost to be watched closely. Over time, you want your cost to go down as products and customers mature and your support center gains experience. It’s ok to have temporary upticks around new releases and the like, but strive to decrease the cost per customer each year.
Exceeding Customers’ Expectations
Did you know that loyal customers purchase more, are least likely to switch vendors, are significantly more profitable, and also refer more new customers? Loyal customers are a gold mine, and the trick is that loyal customers are not merely satisfied with your products and services, they are *very* satisfied. To take a concrete example, if you measure satisfaction on a ten-point scale, the very satisfied customers are the ones that score at 9 or 10, the very top of the scale.
So how do you get very satisfied customers? By exceeding their expectations. Easier said than done, you say (and you’re right!) so here are some practical tips for creating the highest levels of customer satisfaction.
1. Understand your customers’ expectations.
Do you know what your customers want? This is important both at the macro level and at the micro (case) level. Does each support staffer take the time on each and every interaction to really listen for what the customer wants? Most customers will say not only what’s required to address the technical issue, but also what they want to handle their other personal and business concerns. Listen for the clues.
At the end of each conversation, summarize the customer’s expectations.
2. Make clear commitments
Once you know your customers’ expectations (see step 1), you can decide what’s needed to meet them. Make crystal-clear commitments at each stage of the process. No weaseling allowed, a la “I’ll try to work on this tomorrow”. Use crisp, clear deliverables instead: “I’ll test the problem and call you back by 3pm tomorrow with the results.”
Many of us resist crystal-clear commitments for fear we won’t be able to meet them. True, that’s a risk, but it’s a lot easier to manage deliverables against clear commitments than to handle customers’ unpredictable expectations based on vague or non-existing commitments!
End each customer conversation with a clear statement of what will come next.
3. Deliver on your commitments
Do what you say you will do. And if you cannot, promptly let the customer know what and when you can deliver. Each successful deliverable builds trust, just like each deposit in a checking account builds its balance. And if you have a large balance, you have more flexibility, as would be the case in a long-term account management relationship, unlike what many of us experience in a help desk setting where customers are assigned randomly and therefore have no built-in trust with the support staffer they work with.
Deliver what you promise.
4. Check that customers are satisfied
Most customers are not comfortable with confrontation. (We support people are much more comfortable with confrontation than the average customer because we have extensive experience with it, but we are not like most people). Customers are unlikely to tell you when they are not satisfied. Instead, specifically ask for a confirmation at the conclusion of an issue. “Did that take care of the problem?” should do it.
5. Stay on top of your backlog
Old issues get worse, not better. Define a reasonable target for aging and scrutinize all cases older than the target. Look at all cases, even if the ball is in the customer’s court or with another organization (maybe the engineering group). All cases are, ultimately, the responsibility of their owners, even if others are working on them.
6. Be early
You may think that all the steps so far are about meeting customers’ expectations, and strictly speaking that’s right. The sad reality is that customers so rarely experience having their expectations met consistently that they are often delighted to simply have a good experience, never mind a great one. But if you want to get to the next level, you need to do more.
Start with a very simple idea: be early. You said you would call back before 4pm? Call at 3:30. You said it would take two days to do the research? Speed it up to 1 1/2 days if you can. A big part of being early is setting up reasonable expectations to begin with, but even little things count. You have a conference call at 10am? Why not call at 9:59 rather than 10:01? Yes, a minute does matter.
7. Be personal
Support is about fixing technical or business issues, but as the old saying goes: fix the person first, then the problem. Customers appreciate and value an appropriate personal connection. For instance: use the customer’s name, give the customer your direct extension or your cell phone number, sympathize with how the particular problem affects them.
You’re a human being. Act like one; don’t be a robot. And don’t force staffers to act like robots either.
8. Give a little bit extra
Use policies and processes as guides, not as excuses not to deliver what the customer wants. It’s always good to be able to do a little more: point out another interesting knowledge base document, test the fix before shipping it off, offer to talk to the customer’s manager about the problem. An unexpected extra is a breath of fresh air.
Always look for the opportunity to do a bit more.
This should get you started. If you want to find out more about customer loyalty, the standard reference is Frederick Reichheld’s “Loyalty Rules”.
“Pick 3” Pricing
Want to make a small investment to learn about best practices in the industry? You can choose 3 booklets for just $100 (including shipping and handling), including
Managing Support Escalations (NEW! All about managing critical accounts)
Mix and match, or order multiples to share with your staff.
To order, [This offer has been discontinued.]. Descriptions of all the booklets can be found here. The special pricing is only available to newsletter subscribers and is not listed on the web site.
FT Works in the News
SupportWeek published an article I wrote entitled Taming the Escalation Monster, an overview of best practices in escalation management. You can read it at http://www.thesspa.com/sspanews/110502/article1.asp.
Curious about something? Send me your suggestions for topics and your name will appear in future newsletters. I’m thinking of doing a compilation of “tips and tricks about support metrics” in the coming months so if you have favorites, horror stories, or questions about metrics, please don’t be shy.
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