The FT Word – December 2003
The FT Word
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Welcome
Welcome to the December 2003 issue of the FT Word. Please forward it to colleagues you think may enjoy it.
In this month’s issue
· computing ROI for supporting third-party products
· “I’m not the right person to help you” – How to tell customers they need to talk to someone else
· an online version of the “CRM and other Support Tools” workshop coming in January
ROI for Support Third-Party Products
Thank you to Donal de Paor for suggesting this topic.
If you support third-party products, I bet you’ve asked yourself more than once whether it’s all worth it. Here’s a way to find out, along with some rules of thumb on what to expect.
1. Are you making money?
ROI analyses are pretty straightforward as long as you can get the numbers, which can be a real challenge for third-party product support. Start with the revenue: how much support revenue are you getting for the product? Sometimes it’s easy to find out (when each product is itemized), sometimes you will have to come up with a reasonable allocation (usually based on product cost).
2. How much are you spending?
Are you paying any royalties on support? This is not unusual. If you are, just examine the bill and you will know the answer.
How much are you spending in support costs? This is a really difficult computation for most support centers because, although determining the average cost per case is not hard (total costs/number of cases), tracking the cost of specific cases or even categories of cases is often miserably difficult.
If you track cases by products or categories, you should be able to figure out what cases are related to the particular product you are interested in. Try to figure out whether a portion of “mixed” cases should be included as well, but don’t make it complicated.
Then, determine whether cases related to the third-party product are different in significant ways from your average case: longer? shorter? require special expertise? involve customers that need more or less hand-holding?
For example, let’s say you find that 10% of your cases are related to the third-party product, and that they tend to be a little easier than other cases. If your average case costs $100 (not an unusual figure with complex software), then you may decide that your third-party product cases cost about $90 a piece, and therefore constitute 9% of your total cost.
3. Are you generating any profit?
At this point, compare your costs (royalties plus cost of support) to your revenue for the product. You will have your profit margin (or loss, perhaps).
4. Can you do better?
Many support centers lose money on supporting third-party products. Why? Because the customer base for third-party products is often small compared to the other products, so they generate little revenue. Furthermore, few support reps know the “marginal” products, which increases support costs. Finally, the third-party may be poorly set up to handle second-line support, creating all kinds of headaches for escalated cases.
This is not to say that you can never make a profit, even a large one, by supporting a third-party product. You should be in good shape with third-party products that are:
· mature and stable (so generate few problems)
· widely used so that you are getting a good stream of cases and support reps can keep their technical knowledge sharp
· supported with a sturdy process by the third-party company
If you want to move from unprofitable to profitable, assess the customer base. If it’s tiny, you should be better off unloading the support (and the tiny revenue) on the third party, at least if it’s capable of delivering it, and if your customers will accept a disjointed support approach. If the customer base is large or growing, work with the third party to organize training for your staff and smooth out the escalation process. Your accountant will thank you.
“I’m not the right person to help you”
There are times in the life of a support staffer when we know we’re not the right person to help the customer. How do you preserve a good customer experience while redirecting to someone else?
1. Explain the need for change
Don’t just say “You need to talk to Bob” or “This is an Accounting issue”. Customers don’t care about who does what in the company: they just want help. Position the other person or group as better able than you to solve the problem: “You need to talk to some who specializes in networking. I’m going to ask my colleague Bob to take over at this point.” or “This is an issue that the accounting team can handle best. Let me put you in touch with them.”
2. Relay information
Customers hate having to repeat information to new players. Take careful notes and make sure the next person gets them. This is where a tracking system is handy. If you are transferring the issue by phone, take a few minutes to brief the next person on what the customer wants.
3. Set expectations
If you cannot immediately connect the customer with the next person, tell the customer when they will hear back. Be conservative to avoid disappointment.
4. Check that it worked
Don’t just drop the customer after you make the referral. Check that the contact was made with the next person. If something went wrong, call the customer, apologize, and fix the problem. Retain responsibility until someone else has safely confirmed they got it.
Yes, it’s hard to do when you are very busy, but it’s the only way to make sure that the customer did not fall into a black hole.
This technique and many others are described in Don’t Play Go Get a Rock: A Complete Guide for Flawless Technical Support Skills. For more information and to purchase the booklet go here.
FT Works in the News
SSPAnews published an interesting article about staff utilization rates by John Alfonso of FRx Software Corporation that quoted techniques from The Art of Software Support. Thanks, John! You can read the article at http://www.thesspa.com/sspanews/111103/article1.asp
The “CRM and Other Support Tools” hands-on workshop I presented at San Jose State University this month was a success. If you’d like to catch its first online version, join me starting on Monday January 12th, 6-9am Pacific Time, from anywhere around the world! Please email me for more information.
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.
Regards,
Françoise Tourniaire
FT Works
www.ftworks.com
650 559 9826
