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Is there a story?

SwellJoe 18y ago
I offered telephone sales and support for my prior company. For the first six months, or so, it was fine. Low customer count, and it was nice to talk to folks, find out what they were looking for, help them choose the right product, etc. But never underestimate how much more time a phone interaction takes than email or a ticket in an issue tracker--unless you're willing to be rude and end the conversation quickly. This is a skill I never obtained in seven years of running that company. Someone dug up my phone number from whois just yesterday. I'm a nice guy, and I try to be helpful, even when it should be obvious from the fact that there is no phone number anywhere on our website that we aren't equipped to deal with telephone queries. So, I answered his questions as best I could. 45 minutes later, I hung up, having possibly convinced someone to spend $138 with us. For anyone not doing the math on this, even if he buys, given our long-term support and product maintenance commitments, I've already made no money on the sale. If he purchases the product, and then calls me again for help, I'm way down in the hole on this sale. Here are the problems with talking to people on the phone: 1. You don't have a lot of customers today, so it's cheap and easy to answer a couple of calls per day. But, if you have any level of success, you will have more customers each day--and if you do your job, the number will only ever increase, forever and ever. 10 customers having your phone number aint so bad. 1000 customers having your number is bad. 10000 customers having your number is a nightmare, and an expensive one, at that. You have to hire someone, at some point, to handle the phones...and if they're technically savvy enough to help people, they won't be cheap. It's also a soul-sucking job. Nobody likes doing phone support. It's high stress, low satisfaction, and overall just sucks. Turnover will be high, and the low morale of this team will hurt morale in the rest of the company. You could outsource it, but that'd be admitting you're willing to provide shitty service. You could put them in a different building, but that hurts morale of the support team even more--and makes your developers no longer accountable for their products ease of use. 2. The kind of people who refuse to buy if they can't call you for sales assistance will insist on calling for support. And they will call a lot. This was a definite trend with my previous company. If I had to talk to someone for an hour or two to make the sale (expensive products back then), I expected to talk to them again for several hours through the life cycle of the product. If they can't call you for support, but could for sales, they will be angry--loudly, publicly, angry--about this difference. "You're easy to reach when you want my money, but when I need help you're nowhere to be found." No matter how aggressively you help people online or via email, you will be described as being unsupportive and unhelpful, and only interested in the sale. 3. Expense and opportunity cost. I did the math on this during the last couple of years of operation of my company, and I should have done it the first year of operation and every year after...I was losing money on every box I sold, because of the time I spent on the phone with folks. When I "closed" the company and stopped selling systems, and only provided contract services on an hourly basis, I had the most profitable year of my companies existence. 4. You can't help people with technical products on the phone, but they expect you to. You can't send them links to relevant docs, you can't send screenshots back and forth, you can't suggest commands for copy/paste usage. What you can do is spend five minutes explaining that "slash" and "backslash" are different characters, and that when you say "slash" you actually mean "slash" and not "backslash", likewise "dash", "underscore", "pipe", "hash", upper vs. lower case etc. So, 45 minutes into the call, you've finally gotten a sane description of the problem. An hour after that, you've solved their problem. So, it is deeply frustrating for everybody concerned. Two or three emails or comments in a ticket tracker would have solved this problem in a tenth the time, and that's time you could spend helping other customers. I'm sure there are products and businesses out there that will be well-served by having a phone number. But, if your product is technical in nature, and doesn't cost thousands of dollars, I would argue that you'd have to be an absolute fool to make a promise to help people via telephone.
- cmos 18y ago
  These are great points. IF you can get away without a phone number, you train your customers early on to use other means. Yes, you may lose out on customers, but this is built into your profit model. Taking phone calls costs money. Typically, people who would prefer to call are going to be not as technical, and will indeed require 'support' that goes beyond your product, because if your product isn't working, you have to fix it or at least diagnose it on that phone call, even if it's because their networking is down. You essentially become their "IT" department. So, not having a phone number will cause you to lose sales, but probably with those sales are the 'expensive' customers that you probably would not have made money on after factoring the extra support costs. That being said, if you must have a phone number, increase the cost of your product to cover the extra cost of that.
  - HeyLaughingBoy 18y ago
    Very true! In my first job at a small hardware manufacturer, all we had was phone support (this was late 80's - early 90's, email wasn't widespread). The people who needed the most support often became very good customers because they knew they could rely on us to help them when they needed it. Almost all customers needed pre-sales support and a fairly high percentage needed tech support after purchase depending on what they bought. One of our product manuals was always being upgraded because the product was so complex that we began to anticipate the customer questions and answer them explicitly in the manual. The average sale was probably around $300 but we had a high number of repeat customers many of whom we knew by name. As you said, the cost of the product must cover the anticipated support. If you are covering the cost, then make this an opportunity to differentiate your company even more by offering excellent support beyond what your competitors do.
  - SwellJoe 18y ago
    So, I think this is one of those lessons learned from the school or hard knocks, for me. Sometimes it is just as important to be clear with yourself and the rest of your company about what customers you aren't trying to serve as being clear about what customers you are trying to serve. You cannot satisfy everyone, but early on, when you have very few customers, you may tell yourself, "This customer would be worth doing something very different for." It is tempting to do anything you can do make a sale. Sometimes, this is just a sign that you aren't targeting the right people yet, and it's time to evolve and grow. But, if you aren't careful it just leads to you trying to be all things to all people. I had this problem with my previous company...the questions would come, "Can you do X, Y, and Z?" And my thought process would be, "Yes on X and Y, and I could totally make Z happen, if I just spend two weeks developing it, making this a losing sale, but I'll amortize across future sales of Z." And I'd respond, "Yes." I'd make Z possible, and then I would never sell to another customer that needed Z. To be fair to this thought process, Virtualmin wouldn't exist had I been successful about saying "No, that's not something we do." But, counting up the successes vs. the things that merely distracted me from my real goals, that's batting about .025. And, I had wanted to make something like Virtualmin for years (and I'd even taken a stab at it three or four years previous and written 10kLoC, or so, and had some basic functionality and a half dozen users)...this customer just gave me an excuse to spend enough time/money on it to make it a reality. Because I (almost) never have to spend an hour on the phone with anyone, either to make a sale or to support the product, I can spend that hour helping a dozen people solve their problems. Thus, sales are cheaper for us...so we can charge less. Support is cheaper for us, so we can do more of it, without having to charge extra as our competitors do. If I ever said, "Yes", to the question, "Can I call you?" all of our math about how we make a profit on software that is as large as ours, while being as cheap as it is (and being 90% available in an Open Source form), would completely go out the window, and our prices would have to become too high to be competitive, or we would just start losing money on every sale, as I did in my previous business. I'm not saying answering a phone now and then would put us out of business...but I am saying that I don't want to be a telephone IT support business ever again (you're spot on in your assessment that you become every customers IT department, because you're the only company that answers the phone and has smart people on the end of the line--I can't even count the number of times I've fixed peoples routers because they couldn't afford a Cisco support contract). Before offering to answer phones, think about whether your business can support pricing that high (if you're unfamiliar with Cisco support pricing...do a little digging...be prepared to gasp), or if it will price you right out of the market.

Is there a story?

I offered telephone sales and support for my prior company. For the first six months, or so, it was fine. Low customer count, and it was nice to talk to folks, find out what they were looking for, help them choose the right product, etc. But never underestimate how much more time a phone interaction takes than email or a ticket in an issue tracker--unless you're willing to be rude and end the conversation quickly. This is a skill I never obtained in seven years of running that company. Someone dug up my phone number from whois just yesterday. I'm a nice guy, and I try to be helpful, even when it should be obvious from the fact that there is no phone number anywhere on our website that we aren't equipped to deal with telephone queries. So, I answered his questions as best I could. 45 minutes later, I hung up, having possibly convinced someone to spend $138 with us. For anyone not doing the math on this, even if he buys, given our long-term support and product maintenance commitments, I've already made no money on the sale. If he purchases the product, and then calls me again for help, I'm way down in the hole on this sale. Here are the problems with talking to people on the phone: 1. You don't have a lot of customers today, so it's cheap and easy to answer a couple of calls per day. But, if you have any level of success, you will have more customers each day--and if you do your job, the number will only ever increase, forever and ever. 10 customers having your phone number aint so bad. 1000 customers having your number is bad. 10000 customers having your number is a nightmare, and an expensive one, at that. You have to hire someone, at some point, to handle the phones...and if they're technically savvy enough to help people, they won't be cheap. It's also a soul-sucking job. Nobody likes doing phone support. It's high stress, low satisfaction, and overall just sucks. Turnover will be high, and the low morale of this team will hurt morale in the rest of the company. You could outsource it, but that'd be admitting you're willing to provide shitty service. You could put them in a different building, but that hurts morale of the support team even more--and makes your developers no longer accountable for their products ease of use. 2. The kind of people who refuse to buy if they can't call you for sales assistance will insist on calling for support. And they will call a lot. This was a definite trend with my previous company. If I had to talk to someone for an hour or two to make the sale (expensive products back then), I expected to talk to them again for several hours through the life cycle of the product. If they can't call you for support, but could for sales, they will be angry--loudly, publicly, angry--about this difference. "You're easy to reach when you want my money, but when I need help you're nowhere to be found." No matter how aggressively you help people online or via email, you will be described as being unsupportive and unhelpful, and only interested in the sale. 3. Expense and opportunity cost. I did the math on this during the last couple of years of operation of my company, and I should have done it the first year of operation and every year after...I was losing money on every box I sold, because of the time I spent on the phone with folks. When I "closed" the company and stopped selling systems, and only provided contract services on an hourly basis, I had the most profitable year of my companies existence. 4. You can't help people with technical products on the phone, but they expect you to. You can't send them links to relevant docs, you can't send screenshots back and forth, you can't suggest commands for copy/paste usage. What you can do is spend five minutes explaining that "slash" and "backslash" are different characters, and that when you say "slash" you actually mean "slash" and not "backslash", likewise "dash", "underscore", "pipe", "hash", upper vs. lower case etc. So, 45 minutes into the call, you've finally gotten a sane description of the problem. An hour after that, you've solved their problem. So, it is deeply frustrating for everybody concerned. Two or three emails or comments in a ticket tracker would have solved this problem in a tenth the time, and that's time you could spend helping other customers. I'm sure there are products and businesses out there that will be well-served by having a phone number. But, if your product is technical in nature, and doesn't cost thousands of dollars, I would argue that you'd have to be an absolute fool to make a promise to help people via telephone.

cmos 18y ago
These are great points. IF you can get away without a phone number, you train your customers early on to use other means. Yes, you may lose out on customers, but this is built into your profit model. Taking phone calls costs money. Typically, people who would prefer to call are going to be not as technical, and will indeed require 'support' that goes beyond your product, because if your product isn't working, you have to fix it or at least diagnose it on that phone call, even if it's because their networking is down. You essentially become their "IT" department. So, not having a phone number will cause you to lose sales, but probably with those sales are the 'expensive' customers that you probably would not have made money on after factoring the extra support costs. That being said, if you must have a phone number, increase the cost of your product to cover the extra cost of that.
- HeyLaughingBoy 18y ago
  Very true! In my first job at a small hardware manufacturer, all we had was phone support (this was late 80's - early 90's, email wasn't widespread). The people who needed the most support often became very good customers because they knew they could rely on us to help them when they needed it. Almost all customers needed pre-sales support and a fairly high percentage needed tech support after purchase depending on what they bought. One of our product manuals was always being upgraded because the product was so complex that we began to anticipate the customer questions and answer them explicitly in the manual. The average sale was probably around $300 but we had a high number of repeat customers many of whom we knew by name. As you said, the cost of the product must cover the anticipated support. If you are covering the cost, then make this an opportunity to differentiate your company even more by offering excellent support beyond what your competitors do.
- SwellJoe 18y ago
  So, I think this is one of those lessons learned from the school or hard knocks, for me. Sometimes it is just as important to be clear with yourself and the rest of your company about what customers you aren't trying to serve as being clear about what customers you are trying to serve. You cannot satisfy everyone, but early on, when you have very few customers, you may tell yourself, "This customer would be worth doing something very different for." It is tempting to do anything you can do make a sale. Sometimes, this is just a sign that you aren't targeting the right people yet, and it's time to evolve and grow. But, if you aren't careful it just leads to you trying to be all things to all people. I had this problem with my previous company...the questions would come, "Can you do X, Y, and Z?" And my thought process would be, "Yes on X and Y, and I could totally make Z happen, if I just spend two weeks developing it, making this a losing sale, but I'll amortize across future sales of Z." And I'd respond, "Yes." I'd make Z possible, and then I would never sell to another customer that needed Z. To be fair to this thought process, Virtualmin wouldn't exist had I been successful about saying "No, that's not something we do." But, counting up the successes vs. the things that merely distracted me from my real goals, that's batting about .025. And, I had wanted to make something like Virtualmin for years (and I'd even taken a stab at it three or four years previous and written 10kLoC, or so, and had some basic functionality and a half dozen users)...this customer just gave me an excuse to spend enough time/money on it to make it a reality. Because I (almost) never have to spend an hour on the phone with anyone, either to make a sale or to support the product, I can spend that hour helping a dozen people solve their problems. Thus, sales are cheaper for us...so we can charge less. Support is cheaper for us, so we can do more of it, without having to charge extra as our competitors do. If I ever said, "Yes", to the question, "Can I call you?" all of our math about how we make a profit on software that is as large as ours, while being as cheap as it is (and being 90% available in an Open Source form), would completely go out the window, and our prices would have to become too high to be competitive, or we would just start losing money on every sale, as I did in my previous business. I'm not saying answering a phone now and then would put us out of business...but I am saying that I don't want to be a telephone IT support business ever again (you're spot on in your assessment that you become every customers IT department, because you're the only company that answers the phone and has smart people on the end of the line--I can't even count the number of times I've fixed peoples routers because they couldn't afford a Cisco support contract). Before offering to answer phones, think about whether your business can support pricing that high (if you're unfamiliar with Cisco support pricing...do a little digging...be prepared to gasp), or if it will price you right out of the market.