Had a great discussion with a prospect today. The develop & sell infrastructure software, are about $5-$10 million in revenue, growing 100%+ YoY and business is up and to the right. Their focus is to sell to primarily departments within large Fortune 2000 companies, and mid-sized companies. The VP of Customer Support has been in the industry for years. Great guy, gets the web, self service and knows that in a fairly competitive space such as his, customer service is a key differentiator – because, every differentiator counts.
He had a great question for me: “I have a customer support website, customers can access self service and log their tickets, avoiding the cost of phone and also can search my knowledge base. So why do I need a customer support community?”
Here was my answer and I would love your feedback and other points to know what your perspectives are.
1. The $156 Billion software market is in a transition from large enterprise licenses to small pay as you go models, from. SaaS (Software as a Service) is now a preferred alternative for most customers. Most importantly software companies are starting to focus on mid-market and smaller companies, since large enterprises have lost their appetite for large purchases of software. These smaller companies have less sophisticated IT capabilities and hence more a need for support. So the number and type of support calls has increased over the last 2-3 years. This was validated by 2 other customers of ours. While the number of support calls have increased, customer support budgets have not. So you need a better model.
2. Customer support has evolved from having customers help themselves to having customers help each other. This creates a network effect and can scale your support in a non-linear fashion. Having a customer website for self service is great, but your people still have to create the knowledge base, provide answers to queries and solve the simple and tough problems.
3. The Long tail effect: There are more arcane support requirements now than ever before. In 2003 for example, Dell had 970 variations for Blade servers, Rack servers and Tower servers. Now its closer to 7000+ according to Server Watch. From what I can tell 95% of these arcane servers have not much in terms of replication in a customer support organization. Who best to tell your customers about a specific configuration than another customer with the same or similar configuration. On another note, most customers know typically more about a company’s products in production than the software provider themselves.
4. Google search and Instant gratification: The first response I have heard from most users if they have a support issue is to Google it. If the answer to a customer’s question is not in your knowledge base, they are going to submit a case and wait for your response, (which will take long since you have probably not encountered this before) and hope to get an answer soon – in this age of Instant gratification that is so not cool.
If however you enabled customer chat and instant message and Wiki based customer support documentation, you can get them the answer from other customers faster.
Now you have created an opportunity for a customer to upsell to other customers and AVOID the cost of having to purchase Google Adwords – saving your company money and bringing a new opportunity to the table.
5. The American Idol effect in Enterprises: Everyone is looking to be an instant pundit in a niche or an “A-list blogger” on Technorati. Since your customers are also in this camp, why not facilitate them to “be discovered” as an expert in an area. Since the acceptance of open source in enteprises and the “fame” for the community developers as a part of that, other users are also looking for avenues to show their capability and be the “dragon slayer” for their area of expertise.