Take a look at your own organization — is it that different? Bring in your own metrics and let’s see on October 27th, the world premier of my new workshop: Measures, Metrics and Madness: the new world of Guiding, not Grading. (Only 7 seats left.)

That question is becoming increasingly urgent as the “software as a service” (SaaS) model gains momentum. And on September 22, the First Wednesday Roundtable will take you behind the scenes for a candid look at a company that made this transition–and survived. Our guide will be Renee Bochman, VP of Professional Services and Support at Axeda corporation.

http://events.linkedin.com/Surviving-SaaS-migration/pub/369402

Find out more at: http://www.first-wednesday.com/conference/

Stay tuned… it is truly perhaps the single best method to turbocharge productivity that I have seen.

Yes, it can be done without turning customer service and support into sales people. They always have to be the customer’s advocate. However, understanding the customer lifecycle, personas and churn risk points and making that part of the support DNA helps. Dramatically.

Embedded in this interesting article from the Economist is something similar that Cablecom (a Swiss cable tv/internet/phone provider) did.

“Like many telecoms providers, Cablecom has grappled with churn.  Using advanced data analytics, Cablecom discovered that although customer defections peaked in the 13th month, the decision to leave was typically around the 9th month (as indicated by things like the number of calls to customer support services).  To reduce defections, Cablecom offered at-risk customers special deals 7 months into their subscription. 

The results were impressive:  customer defections fell from 20% of subscribers a year to under 5%, enabling the firm to save significant marketing acquisition costs while boosting customer satisfaction.”

http://bit.ly/cxSghs

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? ]]> http://www.verghisgroup.com/2009/12/17/zen-and-the-art-of-aircraft-engine-maintenance/feed/ 1 http://www.verghisgroup.com/2009/11/02/voice-of-the-customer-conference-starts-today/ http://www.verghisgroup.com/2009/11/02/voice-of-the-customer-conference-starts-today/#comments Mon, 02 Nov 2009 19:29:34 +0000 Phil Verghis http://www.verghisgroup.com/?p=358 Continue reading →]]> 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.)

 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

http://www.first-wednesday.com/support_conference.html