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.