Customer Service: The New Bottom Line for Tech
Posted on Wednesday, November 4th, 2009
In smokestack industries, a mentality pervades that customer service is a necessary evil to be dispensed with as cheaply and quickly as possible. Not in tech, where service maintenance agreements help drive revenue. What was once a cost center has evolved to a core profit center.
Recent research by the Service Support Professionals Association (SSPA) shows that:
- Revenue from services now represents over 57% of total revenue for software firms and 37% of total revenue for hardware firms.
- Service/support is no longer just about fixing problems. The new focus: speeding consumption of services and products, propelling customers toward repurchase.
- “Low-quality” outsourcing to cut costs is dead. When companies outsource tech service/support it’s to highly-qualified professionals who know their products cold and act as a direct extension of internal support resources.
Tech’s growing recognition of the revenue value of service has played a major role in the sector’s resilience during the recent downturn. In 1999, service revenue contributed 33% of total revenue for software firms and 22% for hardware manufacturers. In other words, over the last decade, service-driven revenue has grown 73% for software firms and 68% for hardware manufacturers. Service is now a primary vehicle for customer acquisition, not just retention. Puts a whole different spin on traditional ideas of “customer service,” doesn’t it?
If there’s a pimple on this industry snapshot, it’s tech industry leaders’ failure to promote their outstanding work in delivering a superior service experience. Too often, we hear the opposite: tales of irate customers storming the walls of software, hardware and comms companies or gang-tweeting to protest a minor tech issue or billing snafu. Glitches do happen, but for the most part, tech is far ahead of the rest of the world when it comes to servicing customers. They have to be: That’s where they make the money. Why not tout this success?
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