Tuesday, June 5, 2007

Charging for Service

"They say the best things in life are free, but you can tell that to the birds and bees, I want money, thats what I want" - Money, The Flying Lizards.

Should you charge for service? The simple answer is: it depends. If you are providing some sort of field service or support for a hardware product or complex software product I can't imagine you not charging for it. The option would be to charge so much for the original product that no one would buy it.

The issue comes when you are talking about a low cost or medium cost piece of software. A lot of companies charge somewhere around 20-25% of the purchase price for "maintenance". Basically, this is a highly discounted price for new major versions of the product. While phone support is sometimes offered, it usually consists of someone with little or no knowledge of the product (we used to call them "first tier" support) who has a knowledge base (often the same one that is online) that they search through using the keywords you give them. More and more frequently support is now user forums and knowledge base articles available online. Frankly a decent Google search will turn up more interesting help on a particular problem.

That is not to say that support could not be a profit center. But if you are going to charge for it, then ensure that what you are providing goes way beyond what someone could find on the web. Make your developers available, at least through forums or email. Have knowledgeable people as your "first tier" support. They should be able to handle most questions on the first call. If you aren't willing or incapable of providing that level (for whatever reason that might be) don't annoy your customers by charging them for half-baked answers.

Sunday, June 3, 2007

Customer Service - It can be a competitive advantage

I have heard people saying recently that great customer service isn't a competitive advantage anymore, it is a basic requirement.

I respectfully disagree.

I have seen lots and lots of businesses survive quite nicely with absolute crap for customer service.

The fact is, consumers have become inured to rude and inattentive clerks, restrictive store policies, and managers and sales people who could care less about the customer.

In the technology field who is number 1 in software? Microsoft. While they have some excellent products, what about their customer service: <sound of crickets chirping> . Imagine if Microsoft offered exceptional service along with good products. Maybe the pirating issue would shrink since it would be worth the money just to get the service and the help!

The reality is that mediocre customer service is the benchmark now (and if you are big and have only a couple of competitors poor customer service will suffice).

Want to excel in your market? Want to blow away your competition? Offer exceptional customer service. Go out of your way to please a customer. No, don't just please your customer; delight them! You may find you can increase your prices because you make the customer feel good about doing business with you.

Stop engaging in a race to the bottom.

I'm Baaaack

I have spent the last month or so contemplating my navel and other such things as I have evaluated my business direction and marketing efforts. Now that I have that far better under control (not quite completely but that story is for another day), I am back to the blog bursting with ideas. I will be incorporating some of the marketing changes into the blog, and a lot of my posts will be centered around these changes. I hope you enjoy them.

Sunday, April 15, 2007

Work vs. Effort

This article from the Pittsburgh Post Gazette was referred to me by David L Holzer, a good friend and insurance advisor with an interesting view of the world:

Work Zone: A bottomless well of vacation time

The gist of the article is that Netflix has no vacation or sick leave policy, and how this kind of "non-conventional" policy is taking hold here and there. Their policy is, if you got your work done and you want to knock off for a few days, do it.

From my point of view, here are the money quotes:

"The worst thing is for a manager to come in and tell me: 'Let's give Susie a huge raise because she's always in the office.' What do I care? I want managers to come to me and say: 'Let's give a really big raise to Sally because she's getting a lot done' -- not because she's chained to her desk." - Netflix Chief Executive Reed Hastings

"We're a grown-up company, with over 12,000 employees, and you have to have some semblance of process and procedure." - unidentified Yahoo spokeswoman

Notice the difference? Reed Hastings @ Netflix is more interested in getting WORK done. Yahoo is more interested in the processes and procedures. If you have the processes to get the work done than what difference does it make if you have 12 or 12,000 employees? The point is still to get the work done! A "grown-up company" - What in the world is that?

Here lies the crux of the problem with a lot of managers. They confuse work with effort. Work is the result of effort. We pay people for work or results. If we as managers give someone assignments that they can complete with 1,960 hours of effort then why should they have to hang around the office for the other 120 hours (3 work weeks) in that year?

Saturday, April 14, 2007

The Customer is Always Right? Part II

The Customer is Always Right.

In my last post, I talked about how this little statement is often made and then ignored by companies. In fact, it is ignored or twisted so often, it becomes meaningless.

Let me introduce a piece of heresy here. It is a statement that I picked up along the way, unfortunately losing the source somewhere in the fog of time. Wherever I picked it up from, it was the first thing I drilled into customer service reps that came into my departments:

The Customer is NOT always right. However, it is your job to make sure they feel they are.

My reps knew that there were certain policies that we could not get around. However, that didn't mean we couldn't work with a client to see if we could come up with something that made the customer feel good, and at the same time didn't violate whatever policy the customer had run afoul of.

Sometimes it was something as simple as staying on the phone and letting them vent. More often it wasn't a policy issue at all. It was making sure the customer didn't feel stupid when they realized if they had just read the manual, they wouldn't have run into the problem in the first place. At one software company, we actually had a code to record such incidents: RTFM (Read The Freaking Manual).

Now before you rage at me that using the code insulted the customer, understand two things:
1. That we often reported back to development that there was a high incident of those codes for a particular feature, and we would work with them to try and rework that section of the system so that it was easier to use. (this process will perhaps be covered in another post)
2. The reduction in stress among the Customer Service Reps was marked. The goal of the team became thinking of ways to work with the customer to get a Win-Win, instead of stressing that management would capriciously decide that the reps answer insulted the customer or insulted the company.

The perfect answer of course is to have no policies that would contradict what a customer may ever call about, or software/hardware that works flawlessly everytime, for everyone, no matter what is done with it. I won't be holding my breath for either of those to happen anytime soon.

Saturday, April 7, 2007

The customer is always right? Part 1

The customer is always right.

This is considered a truism in the Customer Service world. However, the fact of the matter is very few companies actually believe the customer is always right; they throw it out there to show "they care". In point of fact, I would say most of the companies I have dealt with in my life don't believe the customer is ever right. How many times have you heard: "I understand what you are saying sir, but I can't help you." That is a very nice way of saying "you're right, but too bad."

So what they are really saying is "The customer is always right, but that doesn't mean that we have to help them." While I would hardly expect any company to use that as their motto, if you are going to create policies that make a mockery out of the statement, then why use it?

Tuesday, April 3, 2007

Do they teach them anything?

This one was unreal. I was waiting in line at a Panera Bread recently. The young lady behind the counter seemed to be some kind of manager/assistant manager (they seem to wear different shirts from the rest of the employees), working studiously on some paperwork. There were probably four of us waiting for several minutes before she glanced up and said "Oh, I'm not open."

Wow. Two things here. One: did she have to be behind a cash register doing paper work? Maybe she needed the cash register tape, I'm not sure. Two: if she had to be there, how much effort would it have required to write up a little paper sign that said "closed" and tape it on the front of the register?

One of the few gripes I have about Panera (the other is that they do not have enough power outlets for laptops) is that you never know what register is open or closed. People seem to staff the registers randomly, and walk away to go do other tasks at odd times.

That random flow may seem to be efficient to management (and I am a big multi-tasker), but it can breed an attitude that it is OK to ignore customers while you work on another assigned job. Worse, when someone in management ignores customers for several minutes before informing them they are in the wrong line, what do you think that tells the rest of the staff?

Do they teach these people anything about customer service?