7 ms·

The Costs of Running a Support Team in the Bay Area

42 points by fapi1974 10y ago

dahdum 10y ago
People Delight sells outsourced (mostly) offshore customer support, so the source is only a little biased. Though having direct experience with this, these numbers are pretty good. Few places will need a dedicated VP/Director level for a 6 person team though, and if they did, that would apply to outsourced teams as well.
- throwaway_xx9 10y ago
  Of course, the only support you can easily outsource is that which can be script-based. Fine if you're a cable company or bank, not so much if you're a startup. Outsourcing support for early adopters and corporate users will gut your ability to address feature requests from guinea-pigging users.
- fapi1974 10y ago
  We definitely tried to keep the estimates reasonable. For SF we've found that a lot of companies prefer onshore, albeit out of state, for staffing their support.
  - dahdum 10y ago
    Austin, Denver, and Portland seem very popular for SF area. Inexpensive office space and good labor pool with progressive values. We've stayed on the peninsula and done our best to raise productivity (and thus comp) through training, retention, and technology. Wasn't easy but working well now.
    - ethbro 10y ago
      Not judging, just curious, do progressive values really matter? I'm based out of a fairly cosmopolitan southern city, and I'd be hard pressed to construct a scenario where I could only find someone so unprofessional and conservative enough as to make a difference to the customer.
      - dahdum 10y ago
        For some companies progressive values are often important, to the founders, employees, or corporate image. SF has a lot of those is all.
        ethbro 10y ago
        Agreed, but your phrasing was interesting: two hard business qualities and one social one. The other thing that made it stick out was it sounded like progressive values were a litmus test for candidates. Maybe it's living in the south (where my social views tend to put me in the minority and hence used to dealing with ideological disagreements daily), but SF in particular seems pretty intolerant of the idea that lovely people might also happen to have different social opinions.
        dahdum 10y ago
        Sorry - I didn't mean the candidates at all. The article was about SF startups, and many use progressive values as a selling point. I don't think you're wrong to see some intolerance. We've got 50+ people in the South (GA,SC,NC,FL), so I'm only calling it as I see it, not as I'm doing.
- Sanddancer 10y ago
  In other words, part of the problem. The coders get all the perks, the free sodas, stock options, the high salaries, etc. The front line employees get a commute from Stockton and an opportunity for an extra dollar an hour wage next year, unless there's a wage freeze.
  - fapi1974 10y ago
    Yes!!! On the other hand, many of our agents are completely stoked to work for a cool company (e.g. a Bay Area startup), from home, without the commute. They are happier, stay longer, and have way fewer sick days etc. Great article on that here: https://fyiliving.com/uncategorized/telecommuting-linked-to-higher-job-satisfaction https://fyiliving.com/uncategorized/telecommuting-linked-to-...
    - fapi1974 10y ago
      Edit - it might not be clear, but I'm the CEO of PeopleDelight. Happy to answer any questions about support.
    - Sanddancer 10y ago
      What sort of stock options do your employees get? Yes, they get a "cool" tech job, but they don't get an ability to advance either.
      - fapi1974 10y ago
        That is correct, no two ways about it. That said, we do profit sharing, which few others do, albeit for the agents who do well.
      - jackgolding 10y ago
        Every company I've been in has had people advance from support to things like sales/marketing/sys admin - being in the company or at least in the industry has helped a lot!
        10y ago
vacri 10y ago
It's weird that $15-18/hour is considered pricey, when you could get 3-4 support staff per run-of-the-mill SF developer salary. "All I want is someone who has the social skills to talk to clients, technical skills to be familiar with the stack, and the nous to troubleshoot issues based on the partial info that clients provide!" Support sucks. You get the short end of the stick from everyone - clients, management, developers - and there's little in the way of benefits for doing so. No wonder there's a high turnover in the field.
- fapi1974 10y ago
  I have to say I think your comment is an insightful one. Few companies see support as a way to differentiate themselves. But if you think of the really transformative companies they think of customer service as a competitive advantage. The way I put it to our clients is: think of all the money you spend begging customers to engage with you - tv advertising, online ads, events, yada. Then you literally have someone on the phone and they want to talk. Maybe for an unhappy reason but they want to talk! Is it at exactly that point that you decide to minimize the conversation? It makes little sense. Instead when you have them on the phone you could literally make their day, in a million different ways. And it's totally under your control.
  - Sanddancer 10y ago
    If they're so valuable, why are companies like yours trying to keep the customer support people from getting the benefits that the rest of the people working for the company getting? Those people need to eat too, those people are taking risks too, those people have families, have dreams. Your service just furthers the problem of why so many non-technical people struggle in this area.
    - fapi1974 10y ago
      This is a tough question but I don't want to duck it. There is no question that any company creates value by taking advantage of a pricing difference - whether it's the price of labor as measured in wages and benefits, or the cost of making a widget using a new technology, or something else. The reason I feel good about what we do is that I feel like we are helping spread some of the [highly concentrated!] economic wellbeing from the Bay Area to other places that can benefit more from it on the margin. That's totally separate from how rough it is for lower skilled folks in high cost markets to make ends meet...which is a real problem, I agree.
lunaru 10y ago
Customer support for every company is going to be different; there just isn't a formula. Some companies can utilize more automation because the types of questions fielded are going to be very similar (e.g. "where's my package?" or "how come there's a flashing red light?"). A team of 8 just about anywhere can scale to fairly high volumes. But since we're talking about the Bay Area, and it sounds like specifically for a technically focused company (I'm thinking startup) the good news is that the core team is likely already fielding support because talking to customers is so important to the growth and direction of the product. Yes Bay Area salaries are high, but hopefully you're hiring high quality team members that are more than just front-line support -- they should be an invaluable part of your product and customer development process. You can't really put an outsourcing price tag on that. Lots of companies have a process where the developers are insulated from day-to-day support roles -- and if that's working, great. But, the best companies have developers who want to talk directly to (or at least have support access to) customers and understand their problems first hand. This is where the high salaries more than pay for themselves.
- fapi1974 10y ago
  I definitely don't think it makes sense for early stage startups to work with a vendor - there is too much iteration happening during the search for PMF. Where we see it start to make sense is when the company is hitting acceleration. At that point it doesn't scale to do side-by-sides for training. It becomes necessary to manage large number of high-turnover employees and become really good at hiring and training them. It's really specialized. Most tech companies that have scaled - Uber, Amazon, Google etc etc use outside providers. Which isn't to say that even when we get brought in (usually at around the 6 person mark in the blog post) that we don't spend a TON of time making sure that the communication between the front line agents and product/engineering isn't really good.
kbhappyface 10y ago
Actually (sorry late to the party) our company allows folks a great work/life balance. Not a small thing. Appreciated. Well compensated. No commute. For a person in SF that is a minimum savings of 2 hrs a day. Next enjoy team relationships. We do that through slack chat which keeps them close to engineers and other company team members, and keep those departments close to customers concerns. As for costs -- having a The entire US or global footprint to choose the most qualified talent also helps us ensure we are able to ensure the best person for our client, their customer and wage for the location of our team member - win, win, win.
sologoub 10y ago
$15k per year (or $208/person/month) for CRM/Chat/Phone seems high, unless they mean unlimited Salesforce.com license for each user and some add-one... (which for 6-person team seems an excessive choice.)
jakozaur 10y ago
A lot of things cost a small fortune in Bay Area. On the other most of startups should provide exceptional support. I believe it's hard to have exceptional support by outsourcing it remotely (unless the whole company is remote). Especially in young company, when every week a lot of things is changing. Also developers can apply changes based on support insights. Though this might make sense for established companies, I believe initially at startup you should almost never outsource support.
- blencdr 10y ago
  In France some companies "outsource" their support out from Paris near other french cities. The business offices price and cost of living is lower, you can have a proficient team for 1/3 of the price.
  - fapi1974 10y ago
    This is the model a lot of startups follow here as well - "outsourcing" is a loaded term.
ffjffsfr 10y ago
Interesting read, thanks for sharing! Slightly off-topic, have you thought about making your blog more readable? There is grey text on grey background. I'm short sighted and when reading this on my computer monitor while eating lunch I had to actually print it to pdf to be able to read it conveniently. Your blog also breaks in "read mode" chrome extension that I usually use to alleviate problems with bad designs like this one.
- fapi1974 10y ago
  Just got up to head out to surf - this is great advice. It's a new blog - I will take your advice!
mrweasel 10y ago
I don't think that teams with only six people are that interesting. In terms of cost, it really does start to matter when your employing 100+ support teams, where the skills required may be somewhat limited. One of my previous employers is a large telco, with two locations, one in Copenhagen and one in the other end of the country. When I left, the plan was to close down the entire support team in Copenhagen and move those tasks to the other office. The benefit was/is that you can pay people a little less, while still leaving them with a better work-life balance, due to lower rent and shorter commutes. As a bonus the "office" space is much cheaper. There's a huge benefit to place things like support teams in more rural areas of a country. You'll have an easier time hiring and retaining and the cost goes down. Companies, especially in the English speaking countries, just take it one step to fare and move the job out of the country. Sure it's cheaper, but you'll lack the cultural understanding that your customers will expect. Also you do need developers, sales staff and so on to actually be on site with the support teams once in a while. Having to travel abroad or even more than a few hours really hinder that interaction.
- ethbro 10y ago
  The other thing that comes with moving jobs into more rural / less competitive markets is lower turnover. Preface: I know some support rock stars and have nothing but respect for the amount of crap they have to put up with above and beyond software engineers, but from a salary perspective there are better things they could be doing. A lot of which, doing support for long will train them for. Yet those those are the exact people you want to keep in your support org.
- fapi1974 10y ago
  The use case we're after, and it's not all that uncommon with hypergrowth tech companies, is the one where you go from six to a hundred.
coin 10y ago
-1 for disabling zoom on mobile devices
- fapi1974 10y ago
  Noted! Will fix.
calitalieh 10y ago
I run PartnerHero, and we only work with startups (many are name-brands, some are tiny). There is NO WAY you would need a VP or Director level person for a team of 6, or even a team of 60 (our teams start at 2 and go up 80.) Startups are not the same as "small companies", so traditional outsourcing doesn't work. I would strongly recommend hiring outside of the Bay Area (there are state nexus issues you will have to address) and put aside all the local bias. It's not just about saving money, it's about hiring people who will be excited to work with you and represent your voice to the stakeholders who matter the most: your users. Support (operations in general) is really hard and most folks don't get the love and acknowledgment they need. If you can't afford to hire full-time, experiment with interns (paid) and part-time hires. I would look at the Southeast, Mid-West and even Idaho/Oregon/Utah as great options. As for us, we have folks in Honduras, Brazil, U.S., Japan, Spain and Serbia. Great talent (for ops) can be found in many areas, with exceptional English skills and great empathy/problem solving skills too.

42 points by fapi1974 10y ago

People Delight sells outsourced (mostly) offshore customer support, so the source is only a little biased. Though having direct experience with this, these numbers are pretty good. Few places will need a dedicated VP/Director level for a 6 person team though, and if they did, that would apply to outsourced teams as well.

throwaway_xx9 10y ago
Of course, the only support you can easily outsource is that which can be script-based. Fine if you're a cable company or bank, not so much if you're a startup. Outsourcing support for early adopters and corporate users will gut your ability to address feature requests from guinea-pigging users.
fapi1974 10y ago
We definitely tried to keep the estimates reasonable. For SF we've found that a lot of companies prefer onshore, albeit out of state, for staffing their support.
- dahdum 10y ago
  Austin, Denver, and Portland seem very popular for SF area. Inexpensive office space and good labor pool with progressive values. We've stayed on the peninsula and done our best to raise productivity (and thus comp) through training, retention, and technology. Wasn't easy but working well now.
  - ethbro 10y ago
    Not judging, just curious, do progressive values really matter? I'm based out of a fairly cosmopolitan southern city, and I'd be hard pressed to construct a scenario where I could only find someone so unprofessional and conservative enough as to make a difference to the customer.
    - dahdum 10y ago
      For some companies progressive values are often important, to the founders, employees, or corporate image. SF has a lot of those is all.
      - ethbro 10y ago
        Agreed, but your phrasing was interesting: two hard business qualities and one social one. The other thing that made it stick out was it sounded like progressive values were a litmus test for candidates. Maybe it's living in the south (where my social views tend to put me in the minority and hence used to dealing with ideological disagreements daily), but SF in particular seems pretty intolerant of the idea that lovely people might also happen to have different social opinions.
        dahdum 10y ago
        Sorry - I didn't mean the candidates at all. The article was about SF startups, and many use progressive values as a selling point. I don't think you're wrong to see some intolerance. We've got 50+ people in the South (GA,SC,NC,FL), so I'm only calling it as I see it, not as I'm doing.
Sanddancer 10y ago
In other words, part of the problem. The coders get all the perks, the free sodas, stock options, the high salaries, etc. The front line employees get a commute from Stockton and an opportunity for an extra dollar an hour wage next year, unless there's a wage freeze.
- fapi1974 10y ago
  Yes!!! On the other hand, many of our agents are completely stoked to work for a cool company (e.g. a Bay Area startup), from home, without the commute. They are happier, stay longer, and have way fewer sick days etc. Great article on that here: https://fyiliving.com/uncategorized/telecommuting-linked-to-higher-job-satisfaction https://fyiliving.com/uncategorized/telecommuting-linked-to-...
  - fapi1974 10y ago
    Edit - it might not be clear, but I'm the CEO of PeopleDelight. Happy to answer any questions about support.
  - Sanddancer 10y ago
    What sort of stock options do your employees get? Yes, they get a "cool" tech job, but they don't get an ability to advance either.
    - fapi1974 10y ago
      That is correct, no two ways about it. That said, we do profit sharing, which few others do, albeit for the agents who do well.
    - jackgolding 10y ago
      Every company I've been in has had people advance from support to things like sales/marketing/sys admin - being in the company or at least in the industry has helped a lot!
      - 10y ago

vacri 10y ago

It's weird that $15-18/hour is considered pricey, when you could get 3-4 support staff per run-of-the-mill SF developer salary. "All I want is someone who has the social skills to talk to clients, technical skills to be familiar with the stack, and the nous to troubleshoot issues based on the partial info that clients provide!" Support sucks. You get the short end of the stick from everyone - clients, management, developers - and there's little in the way of benefits for doing so. No wonder there's a high turnover in the field.

fapi1974 10y ago
I have to say I think your comment is an insightful one. Few companies see support as a way to differentiate themselves. But if you think of the really transformative companies they think of customer service as a competitive advantage. The way I put it to our clients is: think of all the money you spend begging customers to engage with you - tv advertising, online ads, events, yada. Then you literally have someone on the phone and they want to talk. Maybe for an unhappy reason but they want to talk! Is it at exactly that point that you decide to minimize the conversation? It makes little sense. Instead when you have them on the phone you could literally make their day, in a million different ways. And it's totally under your control.
- Sanddancer 10y ago
  If they're so valuable, why are companies like yours trying to keep the customer support people from getting the benefits that the rest of the people working for the company getting? Those people need to eat too, those people are taking risks too, those people have families, have dreams. Your service just furthers the problem of why so many non-technical people struggle in this area.
  - fapi1974 10y ago
    This is a tough question but I don't want to duck it. There is no question that any company creates value by taking advantage of a pricing difference - whether it's the price of labor as measured in wages and benefits, or the cost of making a widget using a new technology, or something else. The reason I feel good about what we do is that I feel like we are helping spread some of the [highly concentrated!] economic wellbeing from the Bay Area to other places that can benefit more from it on the margin. That's totally separate from how rough it is for lower skilled folks in high cost markets to make ends meet...which is a real problem, I agree.

lunaru 10y ago

Customer support for every company is going to be different; there just isn't a formula. Some companies can utilize more automation because the types of questions fielded are going to be very similar (e.g. "where's my package?" or "how come there's a flashing red light?"). A team of 8 just about anywhere can scale to fairly high volumes. But since we're talking about the Bay Area, and it sounds like specifically for a technically focused company (I'm thinking startup) the good news is that the core team is likely already fielding support because talking to customers is so important to the growth and direction of the product. Yes Bay Area salaries are high, but hopefully you're hiring high quality team members that are more than just front-line support -- they should be an invaluable part of your product and customer development process. You can't really put an outsourcing price tag on that. Lots of companies have a process where the developers are insulated from day-to-day support roles -- and if that's working, great. But, the best companies have developers who want to talk directly to (or at least have support access to) customers and understand their problems first hand. This is where the high salaries more than pay for themselves.

fapi1974 10y ago
I definitely don't think it makes sense for early stage startups to work with a vendor - there is too much iteration happening during the search for PMF. Where we see it start to make sense is when the company is hitting acceleration. At that point it doesn't scale to do side-by-sides for training. It becomes necessary to manage large number of high-turnover employees and become really good at hiring and training them. It's really specialized. Most tech companies that have scaled - Uber, Amazon, Google etc etc use outside providers. Which isn't to say that even when we get brought in (usually at around the 6 person mark in the blog post) that we don't spend a TON of time making sure that the communication between the front line agents and product/engineering isn't really good.

kbhappyface 10y ago

Actually (sorry late to the party) our company allows folks a great work/life balance. Not a small thing. Appreciated. Well compensated. No commute. For a person in SF that is a minimum savings of 2 hrs a day. Next enjoy team relationships. We do that through slack chat which keeps them close to engineers and other company team members, and keep those departments close to customers concerns. As for costs -- having a The entire US or global footprint to choose the most qualified talent also helps us ensure we are able to ensure the best person for our client, their customer and wage for the location of our team member - win, win, win.

sologoub 10y ago

$15k per year (or $208/person/month) for CRM/Chat/Phone seems high, unless they mean unlimited Salesforce.com license for each user and some add-one... (which for 6-person team seems an excessive choice.)

jakozaur 10y ago

A lot of things cost a small fortune in Bay Area. On the other most of startups should provide exceptional support. I believe it's hard to have exceptional support by outsourcing it remotely (unless the whole company is remote). Especially in young company, when every week a lot of things is changing. Also developers can apply changes based on support insights. Though this might make sense for established companies, I believe initially at startup you should almost never outsource support.

blencdr 10y ago
In France some companies "outsource" their support out from Paris near other french cities. The business offices price and cost of living is lower, you can have a proficient team for 1/3 of the price.
- fapi1974 10y ago
  This is the model a lot of startups follow here as well - "outsourcing" is a loaded term.

ffjffsfr 10y ago

Interesting read, thanks for sharing! Slightly off-topic, have you thought about making your blog more readable? There is grey text on grey background. I'm short sighted and when reading this on my computer monitor while eating lunch I had to actually print it to pdf to be able to read it conveniently. Your blog also breaks in "read mode" chrome extension that I usually use to alleviate problems with bad designs like this one.

fapi1974 10y ago
Just got up to head out to surf - this is great advice. It's a new blog - I will take your advice!

mrweasel 10y ago

I don't think that teams with only six people are that interesting. In terms of cost, it really does start to matter when your employing 100+ support teams, where the skills required may be somewhat limited. One of my previous employers is a large telco, with two locations, one in Copenhagen and one in the other end of the country. When I left, the plan was to close down the entire support team in Copenhagen and move those tasks to the other office. The benefit was/is that you can pay people a little less, while still leaving them with a better work-life balance, due to lower rent and shorter commutes. As a bonus the "office" space is much cheaper. There's a huge benefit to place things like support teams in more rural areas of a country. You'll have an easier time hiring and retaining and the cost goes down. Companies, especially in the English speaking countries, just take it one step to fare and move the job out of the country. Sure it's cheaper, but you'll lack the cultural understanding that your customers will expect. Also you do need developers, sales staff and so on to actually be on site with the support teams once in a while. Having to travel abroad or even more than a few hours really hinder that interaction.

ethbro 10y ago
The other thing that comes with moving jobs into more rural / less competitive markets is lower turnover. Preface: I know some support rock stars and have nothing but respect for the amount of crap they have to put up with above and beyond software engineers, but from a salary perspective there are better things they could be doing. A lot of which, doing support for long will train them for. Yet those those are the exact people you want to keep in your support org.
fapi1974 10y ago
The use case we're after, and it's not all that uncommon with hypergrowth tech companies, is the one where you go from six to a hundred.

coin 10y ago

-1 for disabling zoom on mobile devices

fapi1974 10y ago
Noted! Will fix.

calitalieh 10y ago

I run PartnerHero, and we only work with startups (many are name-brands, some are tiny). There is NO WAY you would need a VP or Director level person for a team of 6, or even a team of 60 (our teams start at 2 and go up 80.) Startups are not the same as "small companies", so traditional outsourcing doesn't work. I would strongly recommend hiring outside of the Bay Area (there are state nexus issues you will have to address) and put aside all the local bias. It's not just about saving money, it's about hiring people who will be excited to work with you and represent your voice to the stakeholders who matter the most: your users. Support (operations in general) is really hard and most folks don't get the love and acknowledgment they need. If you can't afford to hire full-time, experiment with interns (paid) and part-time hires. I would look at the Southeast, Mid-West and even Idaho/Oregon/Utah as great options. As for us, we have folks in Honduras, Brazil, U.S., Japan, Spain and Serbia. Great talent (for ops) can be found in many areas, with exceptional English skills and great empathy/problem solving skills too.