Interesting post on motivation in communities…
By Phil Verghis on March 10, 2010For all of you trying to implement communities – and there are more than just a few of you:
For all of you trying to implement communities – and there are more than just a few of you:
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.
(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?
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.)
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
Ah the simpler days of the Internet. Way back in 2002, during my Akamai days, we had team members manually mining public forums for customer comments during live events to ensure that we could pin point and resolve issues close to real time. Of course it would be impossible to scale staff enough to do that smartly today.
That’s why today’s New York Times article (free registration required) on some of the tools available to mine blogs, Twitter and more caught my interest. Selected quotes from the article:
Scout Labs recently introduced a subscription service that allows customers to monitor blogs, news articles, online forums and social networking sites for trends in opinions about products, services or topics in the news.
Jodange offers a service geared toward online publishers that lets them incorporate opinion data drawn from over 450,000 sources, including mainstream news sources, blogs and Twitter.
Bo Pang, a researcher at Yahoo co-wrote “Opinion Mining and Sentiment Analysis,” one of the first academic books on sentiment analysis.
To get at the true intent of a statement, Ms. Pang developed software that looks at several different filters, including polarity (is the statement positive or negative?), intensity (what is the degree of emotion being expressed?) and subjectivity (how partial or impartial is the source?).
For example, a preponderance of adjectives often signals a high degree of subjectivity, while noun- and verb-heavy statements tend toward a more neutral point of view.
How are you tracking sentiments about your organization? Have you been able to strike a good balance between a rapid response and appropriate response (i.e. not over-reacting) ?
One of the most under-rated yet powerful tools we have at our disposal as customer support/service folks is a well thought out customer lifecycle plan (complete with a timeline). This involves formally mapping out customer touchpoints along the customer lifecycle starting with the transition from sales to support all the way to ‘exiting’ the customer when they leave the business.
As part of this lifecyle and timeline, the first few days of a customer relationship is recognized and treated as importantly as in a personal relationship. A little effort at the right time will go a long way in making the relationship smoother.
I was given a powerful reminder of this yesterday while visiting ValueLabs as part of a client engagement in Hyderabad, India yesterday.
I was welcomed at the airport by a driver with a sign, and an admin assistant. I was given a local Indian cell phone with all the numbers I would need pre-programmed. If you travel a lot, you know that the cost of using your cell phone internationally can take a year off your retirement savings, and figuring out all the local codes vs. national codes is not a trivial matter. This was a most welcome touch.
When I arrived at the facility the next day, the cab driver (arranged by the company) had clearly been given instructions to call ahead to let them know I was on the way. I was welcomed with flowers and a ‘VIP’ badge. Very nice touches, and it showed an attention to detail for the customer experience that is unusal.
What are you doing to make your new customer experience a special one?
Boston, MA — Drawing on an impressive lineup of speakers, the 2009 “Voice of the Customer Conference” will focus on leading-edge issues in building end-user communities, improving satisfaction metrics, and creating customer-centric organizations. The conference, produced by the First Wednesday Roundtable, will take place in Bolton, Mass. on Nov. 3 with a day of optional workshops on Nov. 4.
Registration for the Nov. 3 conference is $385 per person. Additional information about the program and post-conference workshops can be found on the First Wednesday Web site:
http://www.first-wednesday.com/support_conference.html
I lead a discussion for the SSPA’s Small and Medium Business (SMB) Community of Interest session in late May. Despite audio problems for the first 15 minutes, only 4 people dropped out by the end of the hour. We re-recorded the session for the SSPA to post, but once again there were audio problems on the SSPA end.
For the first time in history, more than half the world’s population has joined the middle class. This startling development just happened in the past year or two. Why should you care? I believe this development will have a profound impact on service and support leaders all over the world.
Let’s start by defining “middle class.” Most economists agree there are actually two types. One consists of those who are middle class by any standard. Their income is somewhere between the average Brazilian’s and Italian’s (i.e., $12-$50 a day). While this segment is growing fast, they make up only a tenth of the developing world.
The second type consists of those who are middle-class by the standards of the developing world but not the developed (rich) one. This group earns between $2-13 per day. (I’ve always wondered about the significance of $2 per day. It turns out that amount is considered poverty anywhere in the world. $13 is the poverty line in the United States.)
But it is not just how many are rising into middle class status. It’s how quickly the number ‘tips,’ given the nature of the growth curve. Between 1990 and 2005 – just 15 years – China’s middle-class population soared from 74 million to an unbelievable 806 million. India’s middle class boom has just begun, with the middle class going from 147 million to 264 million during the same period. (Source: The Economist)
Now let’s see what this means to service and support professionals.
The single biggest source of profit for many technology companies is now services revenue. With intense pressure from CEOs and CFOs to keep bringing in this lucrative revenue, coupled with strong pushback from customers demanding discounts, many companies view selling services to this growing global middle class a smart strategy for growth.
Good idea, but -
* If you don’t take into account the two types of middle class, you will roll out services and products that a large percentage of them find simply unaffordable.
* Using traditional techniques and metrics to service them could choke earnings and even bankrupt you.
So what can a service and support leader do? Plenty, I believe. If you are serious about making profits under very tough economic circumstances, check out Prof. C.K. Prahlad’s Fortune at the Bottom of the Pyramid. Another valuable resource is one of the most downloaded papers on my own website, my white paper on “Cultural Implications of Service.”
But you probably want to do more than merely survive in this new, supremely cost-conscious world of service and support. What will it take to thrive? We’ll explore that in the next issue of my newsletter, the Verghis View.
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