Sunday, August 19, 2007

The Support Challenge

In IT and Telecom, the support issue is becoming a concern. Residential home networks increasingly require set-up and support. This is a catch-22 since you can't just sell services like triple-play and broadband without ensuring that the consumer, especially the affluent older consumer, can operate and utilize the service after the installation. This is expensive. VZ FiOS installs typically require several techs all day plus a follow-up visit to meet the customer's expectations. This is costly to the carrier - and the consumer (who must sit around all day waiting for not one, but 2 days of support).

Typically, problems are user related or tied to user owned equipment - DVR's, older TV sets, VCR's. PC's, laptops, and PDA's. But the service provider has to work through the problem any way or lose the customer. (Acquisition costs are high). Even a contract in many cases can be broken with the help of the state AG due to service issues. (See Maryland, NY State and a few others where Verizon is a frequent visitor to the PSC hearing room).

"Total US consumer spending for home technical support services will reach nearly $1 billion by the end of 2011, according to a report from Parks Associates. This new study predicts that remote or on-site IT support services for home computers and networks will grow from approximately $450 million in 2007 to $977 million by year-end 2011, and that in-home services for installing and configuring new PCs will generate revenues exceeding $700 million. Parks Associates analyst Kurt Scherf says, “Customer service and support are not just critical challenges for retailers, manufacturers, and service providers to overcome but also significant revenue generating opportunities for forward thinking companies.” [BB Prop mag]

This ties in with my last post at Phone+ where the Telecom Agent Channel is shifting to a VAR model. Telecom Agents, especially those running call centers, can no longer hope to fuel their revenues with "We can save you 10%". The smaller businesses are as much a tech support challenge as consumers. If the margin on a small business with 2 phone lines, a mobile and a broadband service is $700 on contract - if you get it all in one sale - and you have to perform any kind of support or service (like a billing correction), you are cutting into margin. If the business owners has virus issues or other LAN or PC problems, your $700 quickly dissipates.

As a service provider, you are facing similar realities. How do you handle PC Tech support or LAN support when you are only charging for the Broadband connection?? The answer is: "You can not." Many of you do as a retention strategy, but it is a costly benefit.

The answer is about expectations. You need to establish realistic expectations early on. Cable won't trouble shoot a problem when the router is connected, since the MSO does not provide routers. Distributing anti-virus, anti-malware, and personal firewall software with installations. Then in a pro-active manner sending reminders and alerts about upgrades, fixes, patches, etc. Prevention is better. Plus the alert allows you to be in front of the customer as an expert. In each alert, you can fine print that if these measures are not taken, the customer would need to pay for repair costs. (Or sell them a maintenance contract, a remote access solution, a desktop self-repair product (like PC-Vive), or insurance. That's right PC insurance or Virus Insurance).

As many VOIP Providers and Customers are finding, the low priced VOIP service means limited tech support. Selling VoIP requires a network assessment and perhaps some installation. At sub-$30 per line, there isn't enough margin for a labor intensive install process.

On a final note, TEM (telecom expense mgmt aka bill auditing) used to be free, but now it is an upsell service. There isn't enough margin left to perform these benefits for no charge.

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