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

The price of a gallon of gas has steadily been going up, and the impact is spreading. Is the prospect of paying $5 per gallon in the near future beyond imagination? The average person has little control over the price paid at the pump. If cost is all that is considered, the prospects look bleak. But here’s a key question: if your car got 100 or more miles per gallon, would the price for a single gallon of gas be as significant?

Some automakers anticipated that higher fuel costs would sooner or later result in sharply increased attention being paid to mpg rates. They knew that some drivers would respond by cutting down on the number of miles driven per week by consolidating trips, taking public transportation, etc. However, other consumers would have a different view. Instead of focusing on the price per gallon, these savvy buyers would look to the value per gallon, and would want to buy cars that gave more miles per gallon. The automakers who invested in hybrid technology are now commanding premium prices for their products as a result.

Every professional convention in the customer support community these days will inevitably have some session, seminar or plenary panel about how to make money from Support/Service, or how to operate a center on a P&L basis. But if you look deeper, it’s immediately apparent that what is really being discussed is cost containment and/or reduction — how to squeeze more profit out of maintenance fees by offshoring contact centers or by improving operational efficiency through buying technology. Don’t get me wrong — technology has its place; it can add a lot of value if wisely chosen and implemented. But what is really being sold by the vendors is reduced cost, not increased value to the center’s customers. Nobody ever outsources a customer support contact center or takes it offshore to improve the quality of its interactions.

It’s time to tell the truth about customer contact center profitability. The old model is broken. While some companies talk of operating Support as a profit center, the reality is otherwise. Their thinking and their language is all about cost rather than the profits to be made by increasing the value of the services provided to the customers. How can strategically significant levels of revenue and profitability be generated from your company’s customer contact center? Hint: you won’t get there by cutting costs. What really counts is increasing the revenues by adding value — delivering significantly more miles per each gallon used.

Profitability is a different language from cost containment. To speak it takes vision, a willingness to focus on what is truly important about the exchange of value between vendor and customer. If you aren’t fluent in profitability, your chances for success in the profession of Support, CRM or customer lifecycle management will be much less. If you want to talk about language lessons, give me a call.

April 23, 2008