Andres Sanchez has published a book titled Technical Support Essentials – Advice you can use to succeed in Technical Support and has cited the Savvy Support model a few times as one of the new models for support.
Read all about it, and much more of what Andres has to say in his book.
2009, you were one of the most interesting years to live through from a business perspective. For many all over the world, it was a painful year. Here’s hoping that 2010 is a peaceful, prosperous and safe year for all of you and your loved ones.
Many thanks to my clients for making 2009 my busiest year yet.
(From the Dec ‘09 issue of my newsletter, The Verghis View. Get your own subscription at my home page – www.verghisgroup.com )
Many of you have heard me refer to software maintenance fees as “bad” revenue. While it is very lucrative, it’s bad because customers are unhappy paying it – ask any CIO. To give you a sense of how massive these fees are, Oracle made $12 billion last year – no, that’s not a typo – $12 billion from services and maintenance fees, according to Information Week.
I did some research on how other industries demonstrate value for their maintenance fees, and found it in an unlikely source – aircraft engines. (From this article in the Economist.)
All the major players – Rolls Royce, GE, and Pratt & Whitney – reportedly lose money on the sale of the engine. They make up to seven times the revenue from servicing and selling parts.
Interestingly enough, Rolls Royce has embraced two concepts that go beyond what the vast majority of companies provide in the software space.
First, they abandoned the traditional “break fix” model. Instead, they have taken real-time monitoring to a new level. In a world of mind-numbing complexity, they have (thankfully!) assumed that customer-impacting failures are to be minimized.
In their operations center in Derby, England, vast amounts of data is collected in real time from thousands of engines in flight. This flood of data is immediately analyzed and, if a problem is detected, Rolls Royce informs the pilot in flight. Repairs are arranged at the next stop, rather than waiting for it to become a full-blown emergency.
The data analysis continues after each flight is over. This helps Rolls Royce anticipate future problems and reduce the number of emergency repairs – and unhappy customers. As you can imagine, whenever a plane is yanked from service, the ripple effect on an airline’s schedule, revenues and customer satisfaction is non-trivial.
Real-time information monitoring saves Rolls Royce lots of money in terms of better-designed engines, and increases the time between engine rebuilds (now up to 10 years).
The second thing RR does differently is to charge by the hour the engine is run. This makes perfect sense. The aviation industry’s equivalent of “shelfware” is idle planes parked in the desert. The struggling airline industry loves it. After all, why pay for maintenance on expensive engines when your planes are grounded?
The lesson? Don’t settle for break-fix when you can do far better than that. Your service and support team can actually improve your customer’s business, while charging fees that make more sense for the customer.
In this example Rolls Royce gets paid very lucrative services revenue only if the service is being used. So it’s in both Rolls Royce’s and the airline’s interest to keep planes in the air – one of the key drivers to reducing cost per passenger.
Look ahead to 2010. How can you use customer information to improve their business – and your own?
Oracle’s revenue from software maintenance and service fees have reached $12 billion a year. Read what this interesting article had to say on this topic (includes SAP and more).
As I get ready for another long-haul trip (Thailand/India), I found something that can dramatically cut down the time it takes to re-enter the US. After a 20+ hour journey, there is nothing more agonizing than the ‘last mile’ – waiting in long lines for customs and immigration.
If you are a US citizen or permanent resident, and travel frequently — check out: http://bit.ly/ObpWm. Let me know how useful you find the program.
After almost 4 weeks of travel (just crossed the 100,000 mile mark with United Airlines this past weekend), I’m back in Boston for a few weeks.
One of the reasons I’m back is the Third Annual Voice of the Customer conference hosted by the First Wednesday Group. There is a terrific lineup of speakers and participants. If the past two years were any indication, it should be a fun event with a lot of provocative ideas. I’m looking forward to seeing many friends, colleagues and customers there.
(Disclaimer, I am one of the producers of the First Wednesday Group.)
Just got back from a trip to Baton Rouge, Louisiana. Was re-introduced to some lovely food as well as a new one for me — Jalapeno Jelly. It had some ‘warmth’ to it, and was actually pretty nice.
The Voice of the Customer Conference 2009
Boston, November 3-4
Some of the strongest, most active communities in the social media world are based on post-sale customer support relationships. User groups, online forums, advisory boards, expert networks, survey panels–a growing number of “voice of the customer” channels now provide a rich dialog between companies and their customers.
A great place to learn more about how social media is influencing the support world is the First Wednesday Group’s annual Voice of the Customer conference, which will take place Nov. 3-4 at a conference center outside of Boston.
This is a boutique event–highly interactive, small in scale, with an impressive lineup of expert speakers and an audience of managers with a good deal of hands-on experience with social media in a customer support environment.
If you’re looking for great conversations and lots of real-world data, this is the place to be.
Registration is $385/day. For speaker and program details, please visit
Rest in Peace, Norman Borlaug…
Back in the 1960s, there was a real fear that the world run out of food. Dr. Norman Borlaug pioneered the use of hybrid, high-yield seeds which helped entire countries like Mexico, India and Pakistan feed themselves.
When awarding him the Nobel Peace Prize in 1970, the committee said “More than any other single person of this age, he has helped provide bread for a hungry world.”
He passed away on September 12th at the ripe old age of 95. Millions around the world owe their lives to him…
http://nobelprize.org/nobel_prizes/peace/laureates/1970/borlaug-bio.html
For a balanced note including constructive criticism of his techniques, read http://www.guardian.co.uk/science/2009/sep/13/norman-borlaug-obituary
According to this center’s definition, anyone who spends more than 6 hours a day on the internet, and shows little interest in school is an internet addict…
Read more from the BBC: http://news.bbc.co.uk/2/hi/asia-pacific/8219768.stm
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