Let’s start by acknowledging that the support field uses the word escalation to mean two things:
- out-of-organization handoffs (as in, I need a bug fix and I need someone in the Engineering team to create one)
- out-of-process situations (as in, the customer is yelling at the sales rep to get the issue resolved, already)
I insist on using the word escalation only for the latter, but it’s your lucky day: this post discusses both.
You may be surprised, indeed entirely unconvinced that escalations can cost $10,000, but let’s inventory the costs:
- Costs to get to a technical resolution: the time of the support engineer who owns the case, the time of the subject-matter experts that may need to assist, time from the Engineering team to help troubleshoot the issue, time to create and test a bug fix, and push it out.
- Costs to handle the political and business aspects of the situation (true escalations always have business costs, and handoffs may as well): the time of a dedicated escalation manager, time from the sales rep and CSM, and perhaps time from various executives to appease the customer.
- Costs of the long-term consequences of the escalation such as outright churn, lost expansion potential, the withdrawal of the customer as a positive reference and negative feedback within the customer community. I will leave this category of costs out of the computation completely because it’s squishier, but it can be very significant.
Let’s talk numbers. If the average case costs $200 (assuming 2 hours of effort time from the support engineer in a reasonably high-complexity support environment), the technical resolution of an escalation could cost:
- $1000 for the support engineer (it’s now 10 hours of effort instead of 2)
- $300 for the subject-matter experts (2 hours, and SMEs are paid more than regular support engineers)
- $400 for 2 hours of development engineers’ troubleshooting assistance (they are paid even more)
- $2,000 for 10 hours of bug fixing and testing
- $300 for release management’s packaging of the fix (2 hours)
That’s $4,000 for the technical resolution cost alone, 20 times more than a regular case! Let’s add up the business costs:
- $2000 for 10 hours of an escalation manager’s time
- $500 for an hour of the support VP’s time
- $200 for an hour of the sales rep’s time
- $750 for 5 hours of the CSM’s time
- $1,000 for 2 hours of other, non-support execs’ time
That’s $4,450 for business costs, for a total of $8,450. Awfully close to $10k, right? And it does not include long-term negative consequences on revenue.
The business costs add up fast for uncontrolled, reactive escalations.
- How much do your escalations cost?
- What are you doing to detect potential escalations before they get too ugly? Reviewing cases manually? Using AI to predict them?
Add your experience to the comments.