The FT Word
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Welcome to the April 2010 edition of the FT Word. Please forward it to your colleagues. (They can get their own subscription here.)
This month, lots of support marketing topics – and making internships work for you as a recruiting tool:
- Selling to high-end customers, to celebrate the release of Selling Value, my latest book about support marketing, a discussion on how to sell to high-end customers – and an invitation to join me at the upcoming TSIA conference for a one-day workshop on growing your support revenue.
- Tech Support internships, a practical guide for support executives.
- And, as always, an invitation to attend the Third Tuesday Forum , which will welcome Devra Struzenberg of Genesys on April 20th to discuss KCS audits. Sign up now.
Selling to High-End Customers
High-end customers bring a large chunk of revenues and an even large chunk of profits to your company – and their loss would likely be crippling. Having the right support offerings available for them and convincing them to invest in the high-end offerings is critical to maintain revenue, shore up your support profit margins (high-end customers, despite their higher needs, are more profitable than others), and ensure their loyalty. What’s a high-end customer? A good start is to look at the top 10% of customers but the best strategy is to look for differentiators at the top end. Do you have “power” users? Do the larger customers routinely use the product in different ways? Do you have a few customers who provide a significant chunk of your revenue? Are big customers demanding certain support features (like a dedicated support engineer) that others do not? Do you find yourself delivering extras to big customers even if they are not on the regular menu of support options? Positive answers to these questions are clues that you do have a differentiated set of customers at the high end and that you should consider catering to them.
It could be that you have a completely homogeneous set of customers and that you do not need to design special processes for them, but that’s not likely. In my experience most support organizations find that the top-end of the customer base, whether it’s 20%, 10%, or 1% of the overall base, has significantly different and higher needs when it comes to support. And here are strategies to meet their needs.
1. Aim high
When creating support offerings for the bulk of the customer base, you want to design for the average customer. But high-end customers constitute only a small fraction of your customer base. Moreover, the largest customers are quite different from the average customers, with vastly more complex product installations, widely distributed operations, fiendishly complex hierarchical structures, and perhaps a need to throw their weight around with their vendors. So don’t worry about your high-end offerings being a good fit for your average customers. They should not. (And if they do, the offerings are not high-end enough!) Don’t worry about the high-end offerings being overpriced for average customers. They should be. And don’t worry about the high-end offerings being unappealing or even bizarre for average customers. They should be. A smaller customer has little needs for onsite visits or regular review sessions.
2. Aim even higher
It often makes sense to create both a premium set of offerings to target, say, the top 10% of customers and also a set of super-premium offerings to target the top 1%. Just like the top 10% of customers are different from the rest it’s often the case that the top 1% have special and unique needs – even compared to the top 10%. Why bother creating special offerings for that rarefied sphere? Because they are the most profitable segment of your base and because ensuring their loyalty is critical to the survival of the company.
Besides, the mere existence of super-premium offerings makes it easier for customers to justify purchasing the premium offerings. So even if you don’t sell but a few super-premium offerings (or perhaps none) they could serve as useful foils for your other offerings.
3. Think personalized and proactive
While all customers like personalized support and like proactive support, high-end customers pretty much demand it. Typical premium offerings include:
- Access to a designated support engineer (or dedicated group) to resolve issues. Having a designated contact means that resolution is expedited since the contact is already familiar with the customer’s environment so can often skip over the basic checks to attack the problem faster. The support engineer will also be able to suggest solutions that are better adapted to the customer’s specific requirements.
- An array of proactive support options ranging from weekly calls to regular onsite visits through which the customer will receive product roadmap information, technical suggestions on how to make the best of the products or services they have purchased, and recommendations on how to leverage support.
- Special online services that are either exclusive or personalized for premium customers. So for instance premium customers may be able to use chat to request service while other customers cannot, as an exclusive offer, or they may be able to use completely-personalized portals that include all the contacts they have with your company, both sales and support.
- Non-support features such as consulting days, training allowances, attendance to the users’ group meetings, etc.
Before including any specific feature in a premium offering, test it with your customers. A training allowance makes no sense if your larger customers typically handle their training in-house!
4. Scale up
Pricing support is as much art as science, but one rule is critical for premium support: scale up! Let’s say you want to provide access to a designated support engineer as part of the premium offering. To price the premium offering you may be tempted to add a fixed fee, representing said engineer, to the basic support fee, so 22% of the license price plus $100k (a support engineer can typically support several customers). Notice, however, that doing so means that you would be limiting the upside for very large customers – the very customers who are most likely to consume more than the typical share of an assigned support engineer. So a better approach would be to have a price that scales up rather than the fixed fee. Always model pricing with “typical” customer scenarios, in this case your very large customers.
5. Beef up the collateral
You may be able to sell the standard levels of support with a one-page, online datasheet, but for the higher levels of support it’s best to invest in a more elaborate description, with more details on exactly what the premium options represent. It’s hard to fit luxury into a one-page datasheet so scale up the format as well as the presentation.
6. Engage directly
Product salespeople do quite well selling standard support offerings but may struggle with premium support – and that with customers who expect more handholding. Expect to participate more directly in selling high-end support. Some vendors maintain a support sales team that focuses exclusively on premium deals and find that it’s a good investment.
And remember that many good prospects for premium support are existing customers that are currently enrolled in a standard support offering. Plan to reach out to them, and plan to do it in a more personal manner than through a standard renewal offer.
7. Be patient
Premium support offerings, even if perfectly designed, may take a while to start selling. The main reason is basic math: if only 10% of your customer base could reasonably aspire to premium support and if only 1/12th of the customer base renews each month, you are looking at a minuscule slice of the pie each month. Give it time – but ask tough questions if there’s no movement after 3-6 months!
For more tips about selling to high-end customers, see the brand new Selling Value book, now available for immediate shipment
Tech Support Internships
Many thanks to Steve Nye for suggesting this topic.
Internships can be a great way to recruit enthusiastic college grads, with the added luxury of being able to “try before you buy”. Relatively few support organizations use interns, especially in smaller support centers, but it’s not terribly difficult to organize an internship program. Here are some recommendations.
Know what you want
- Define the goal of the program. Some employers view interns as a cheap source of labor, others as a recruiting tool. Your goal will determine the strategy you will use to recruit, select, train, and deploy the interns so start with a clear vision for the program. For many high-complexity support organizations the main goal is recruiting. Once interns have had a taste of how interesting and fun it is to work with your company and your team they are more likely to sign on for a permanent job. Be realistic. If you would probably not, ever, hire a new college grad without work experience, why bother with an internship program at all?
- Define intern duties. It’s not likely that a summer intern will get to the point of being able to handle customer questions single-handedly. On the other hand, if you offer part-time internships during the school year that would be completely possible, and ideal to fill in those awkward shifts that other staff members may resist.
Either way, you need to define the tasks that interns can handle. If not full cases, a common choice is to have interns handle case reproductions, following the direction of the case owners. System administration duties for the reproduction environment, knowledge base maintenance, easier “cherry-picked” cases are also good candidates.
- Ally yourself with other departments. College recruiting works best if you can physically visit the college job fairs, which can be time-consuming. If possible, work with other departments in the company and join forces. Note that the HR department can be very helpful, but I’ve found that sending a youngish (or young at heart) tech head to the colleges you are targeting works much better than the standard HR rep who may not be able to spout off happily about the cool code they will be staring at.
- Start early. More competitive students expect to apply early in the year (if not before!) for summer internships. If you delay visits and advertising you may not have the best possible pool to draw from.
- Target the right colleges and specialties. For tech support internships the best targets tend to be reasonably close-by institutions with strong technical departments – but I have clients who recruit over the entire country as they need specific talent sets that may not arise locally. If you would recruit a new college grad from a particular institution you can also seek interns there. Or better: if you have people on staff right now who graduated from specific institutions, put those colleges on your list.
- Recruit in person. The best recruiting tool is the successful support engineer who graduated a few years back and is now basking in customer escalations (hmm.. technical challenges). Ideally, send graduates back to their college on job fair day to show their soon-to-be fellow alumni how great your company is.
- Bring presents. Food works. Company T-shirts work.
- Consider younger students. Having two children in college right now, I have witnessed how few companies recruit interns before the end of the junior year. It makes sense to obtain a higher level of skills, but if you can consider sophomores or even freshmen you get a shot at even more affordable and loyal talent, while eluding the competition.
- Cultivate professors. Professors are always happy to recommend their top talent. Make friends with the professors at your chosen institutions. This is another opportunity for recent graduates to help out.
- Provide a good online environment. College students are critical of online processes that don’t quite work. Provide detailed descriptions and an easy way to apply online.
- Say no if you cannot say yes. The main complaint of would-be interns is that no one responds to their candidacy (wait a minute, that’s also the main complaint of job seekers in general, weird, huh?) If the goal of your internship program is to recruit you can’t just discourage future involvement! Students will remember their bad experience for years. Be professional and decline candidates you do not choose to keep.
- Select for skills and enthusiasm. Ask about classes taken and GPA and give technical tests, but take personality into consideration. Will the intern volunteer for tasks or hang back? Will the intern bring a sense of effort and pride to the work or just collect a paycheck?
Use interns smartly
- Offer training and a mentor. Interns behave much like new college hires, only more so. They do not know how to behave in a professional environment. They may not understand that they must adhere to specific work hours, that short shorts are not acceptable in the workplace, or that overt playing of videogames is frowned upon even if they are waiting for an assignment – or whatever rules prevail where you work. Ideally install the interns within immediate distance of a mentor who can provide judicious feedback when needed.
- Be clear and flexible about logistics. Interns may not have cars to go attend the training class in the building across town. They may need to register for Fall classes on June 18th between noon and 3pm, no exceptions and no kidding. They may have to be at school on August 16th for the start of the Fall semester. Understand that interns will have unbending commitments that may not mesh perfectly with your goals for the program and address the discrepancies early and often.
- Include interns in meetings and group projects. Interns are there to get a feel for what real work is like. This means they should go to case review meetings, staff meetings, brown bag lunches, new release training, etc. An intern who’s locked in a cube all day is a very unhappy intern.
- Expose interns to executives. One of the great recruiting tool for college grads is to show them that their work matters. The opportunity to meet executives and ideally present their contributions is cherished. A simple roundtable lunch can work.
- Give them meaningful work. Interns understand that they cannot be in charge of critical projects but they want to do more than mindless work. At least part of their week should be spent working on non-routine, challenging assignments.
- Provide frequent feedback. Students get grades. Interns should get frequent feedback, as often as every week for summer interns. What went well, what they should focus on, plans for next week. If you have a year-long intern you can go to monthly feedback.
- Get their feedback. Debrief departing interns on what worked for them so you can improve the program.
- Reach out to them. Returning interns are much more productive. Stay in touch with past interns. Track their graduation plans and actively woo the best ones. This will help you attract both long-term hires and more interns.
It’s not too late to give internships a try for the coming summer. Give it a try!
For a comprehensive guide to hiring, see The Complete Guide to Hiring Great Support Staffers
FT Works in the News
Grow your Top Line: Designing, Marketing, and Selling Support Packages (at the TSIA Conference)
Want to improve your support sales? Create an effective support portfolio (or fix an ailing one)? Price support offerings? Minimize discounts? Join me on May 6th in Santa Clara, CA. Click here for more details. And YES, you can attend the workshop even if you don’t attend the conference!
Third Tuesday Forum
Are you based in the San Francisco area (or will you be there on Tuesday April 20th)? That morning, David Kay and I will be hosting The Third Tuesday Forum, a roundtable for support executives to discuss the topics we embrace and wrestle with every day. Our presenter will be Devra Struzenberg will share with us how Genesys Support created a quality assessment for their KCS effort to regularly measure the maturity of KCS in the organization and to drive improvements year after year. It should be fun and informative – and as always, PowerPoint-free! To register or for more details, click here. Space is strictly limited to ensure an interactive session.
If you cannot make it this time but would like to be on the mailing list, sign up. You will be the first to know about new events. You can also join the Third Tuesday Forum groups on LinkedIn and Facebook.
Selling Value is shipping
My support marketing book, Selling Value: Designing, Marketing and Selling Support Packages, is in my proud hands and contains 12 case studies to illustrate all aspects of marketing and selling support. It ships immediately. You can order it here
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.
650 559 9826
About FT Works
FT Works helps technology companies create and improve their support operations. Areas of expertise include designing support offerings, creating hiring plans to recruit the right people quickly, training support staff to deliver effective support, defining and implementing support processes, selecting support tools, designing effective metrics, and support center audits. See more details at www.ftworks.com.