Judge a company by how they treat customers, not prospects, because you’ll be a customer for a lot longer than you’ll be a lead in a pipeline.
Any company can turn on the “nice guy” act long enough to close a sale, so don’t be fooled. A good acid test for evaluating a company’s service is to contact support and tell them you forgot your account details. See how you’re treated. That’s my personal version of the orange juice test.
Interactive voice response Systems (IVRs) exemplify this. Dial 1 for new customers and you’ll get a friendly answer from a well spoken sales rep in seconds. Dial 3 to report an issue and you’ll be forced to navigate a phone tree many layers deep. What you get at the end of it, an hour later, won’t quite match the part-time model, ready to talk, that you saw on their site.
Why Do Companies Do This?
It minimises support costs, which increases the valuation of a company. As we all know, the worse you treat customers, the better your company’s valuation.
Wait what was that?
Okay I skipped a step, let’s go back. Support costs are included alongside hosting costs and a few other things in a number called Cost of Goods & Services, aka COGS. COGS is an important number; it tells you if your business fundamentals are sound. Use the following formula.
The LifeTime Value of a customer = Average Revenue Per User – Cost of Goods & Services.
You’ll often see this written as LTV = ARPU – COGS. In short it says “You should profit on each customer”. So by reducing the humans involved in support, you reduce the COGS and therefore increase the LTV.
Barriers are Bad
The popular tactics to reduce support costs are customer hostile. They include the following:
- No Support Channel (Reduces Contacts)
- Difficult to Reach Support (Reduces Contacts)
- Complicated Process to Report Issue (Reduce Contacts)
- Auto Responders Pointing to FAQs (Reduce Average Handling Time)
All of these tactics frustrate customers because incentives are not aligned. The customer wants to contact the business. The business wants to minimise costs of talking to customers. This is why the bar for support is so low, and so often parodied.
A Better Way
Rather than making it hard for your customers to talk with support, make it incredibly easy. Then use every conversation to make it incredibly unnecessary. This lets you delight your customers who do contact you, while also improving your product for future customers. The first step here is very simple. You can simply offer an email address, or a clean, easy-to-use contact form. Or you could just install Intercom – there’s a lot to be gained from having a single communication channel.
The second step is where it gets interesting…
Reduce Contacts per ‘X’
The metric that matters most is not support volume, time to first response (TTFR), average handle time (AHT), or any of the traditional support metrics. It’s something far simpler. It’s Contacts Per X, or CPX for short. CPX tracks how many contacts you get, for every time X occurs, where X is any significant event in your product.
Amazon regard Contacts Per Order (CPO) as their most sensitive measure of customer satisfaction. It measures the amount of customer contacts relating to orders that happen compared to total orders. Amazon have a massive customer base but this deliberate focus gives them the lowest CPO in the industry.
In SaaS terms, a project management app might track Contacts per Sign-up, Contacts per Project Created, Contacts per Upload etc. Just track each product area, and the situation that caused them to contact support. Trello is good for containing these conversations.
To drive each CPX to zero you need more than just bug fixes. You need defensive design, things like: contextual inline help, excellent error handling, corrective search, form validation, educational guides, proactive customer communication, self serve areas, and much much more.
It’s easy to see how Amazon drive down contacts per order. They proactively give you order details (1), keep you up to date about any delays (2), minimise problematic orders by detecting duplicates (3) and provide a self service center (4) that address the 80% of common problems. This leaves excellent support staff with adequate time to resolve complex issues. That’s where they’re most effective.
You can’t give great support when you’re swamped with dumb contacts. The path to great support starts with four words: Always Easy, Never Necessary.