The HotLine Magazine Archives
For The Profession of Cloud/SaaS Product Support
By Mikael Blaisdell

Return-On-Investment estimates are always a big part of any sales presentations for contact center technology suite components. ” This [insert name of technology] is so powerful, it will pay for itself inside the first 5 months,” says the manufacturer’s sales team. You can’t blame them for their enthusiasm; they know that the decision-makers want to hear about ROI. But the essential flaw in all such claims is that they are estimates based on guesstimates. The sales team is relying on the operational cost data furnished by the prospect. Unfortunately, the accuracy of that data is highly suspect. There is no standard and accepted accounting method for determining the true costs of support/service. Few, if any customer contact centers have a firm financial foundation for the operational decisions they make. That needs to change. How can you expect to enhance the company’s profitability from the service sector and increase its contribution to overall corporate goals if the true operational costs of the contact center are unknown or unverifiable?

A good sales manager knows what the costs are for each step in the sales process from awareness to contract execution. That knowledge enables informed decision-making on purchases of advertising, contact lists, technology, etc. It also allows the sales executive to know just how much profit his team brought into the company during the last quarter or last fiscal year. That sort of data makes justifying bonuses and raises amongst the team much easier. It also means a lot of prestige for the Sales department in the general corporate pecking order.

It’s time for Support/Service executives to have an equally precise view of operational costs and overall profitability. It isn’t enough to simply total up all of the salaries, add x-percent for overhead and divide by the number of cases you handled last month to arrive at a “cost per incident” guesstimate. That sort of fuzzy thinking is a good part of the reason that customer support/service is always the first to get trimmed when budgets have to be tightened and the last to get bonuses.

The starting point is a profitability analysis that identifies -all- of your customer contact center operational and knowledge inventory costs. The project team needs to include a representative from Accounting, both for procedural guidance and enhanced credibility for the data. If your support/service management team doesn’t have the bandwidth or the expertise to lead the effort, I can help. But regardless of whether you accomplish it on your own or retain us for the project, it has to be done in order to build an effective foundation for decision-making — and to begin to establish Support as more than just a necessary evil.

September 14, 2007