Memo to the Customer Support Team: Here we go again. As you’ve been hearing, cash is tight, and getting tighter. Senior Management is talking about burn rates, and actively calculating how long the company can survive if new sales slow down or fall off significantly. You know what’s coming at us — budget cuts, hiring freezes, deep layoffs and maybe even center closings. And don’t even think about the desperately needed upgrades to our aging contact center technology suite that we were promised. Get ready to tighten your belts, keep your heads down, and continue chanting “we can do more with less.” As things are going, the immediate future looks worse than gloomy. We’ve basically got two options. One is to cross your fingers for luck, hide and hope that perhaps it won’t turn out to be as bad this time as last. The other is to seize the opportunity to reinvent the profession of Customer Support.
The Venture Capitalist Perspective
One of the CEOs from a major VC firm’s portfolio of companies took notes at a recent mandatory ‘reality’ meeting with the senior partners. According to Valleywag, who acquired a copy and published it, the following points were among the marching orders given to the assembled CEOs, and the meaning is crystal clear. “Cutting deeper is the formula for survival,” a partner reportedly instructed the group. “Make changes, slash expenses, cut deep and keep marching. You can’t be a general if you turn back.”
The bottom line was consistently reinforced: “Do everything possible to get to cash flow positive. Now.” The ‘recommendations’ included cutting Engineering positions (since you already have a product), and focusing only on the product features that are absolutely essential. Base salaries for sales people were another target for the axe, together with an observation that the industry has gotten fat with big bases and big variables. Marketing came under fire as well. “Measure everything and cut what is not working. You don’t need large Product Marketing, Product Management teams.”
Now if Engineering (Engineering!!!), Sales and Marketing are being closely examined for serious cutting, the meaning for Customer Support is only too plain. There will be no place to hide; no one will be safe. Even if you’re supposedly making money through maintenance and support contracts, that won’t be enough to spare you. Senior Management is going to assume those revenues will continue even if they cut the Support team to the bone and beyond. “You’ll just have to do more with less,” will be the message that accompanies the drastic staff reduction orders. However, while this is the probable outcome for many, it doesn’t have to be true for all.
There Is A Better Way
Cutting costs is indeed an effective way to reduce the burn rate and preserve the company’s cash balance. But there is another option that is much more in keeping with the basic imperative to get cash flow positive now. It’s time for Support to be profitable, to think and authentically be a profit center that makes a strategically significant and clearly measurable contribution to the corporation’s bottom line instead of existing as a necessary break/fix evil. It’s time to profoundly reinvent the profession of customer support.
There are several key pieces to the puzzle. Customer retention rate. Effective skill-set deployment and utilization. The proper selection and use of Technology. Re-coding the group’s DNA for P&L thinking. Monetization beyond the standard subscription or perpetual license sale model. Above all, — Leadership. Those who crack the code and figure out how to put the pieces together in their center so as to make significant and sustainable profitability contributions to the company will win, and win big. If you’d like to find out what that could look like in your company, get in touch by e-mail or give me a call. (To comment on this article, click here.)