Sailing to Support Nirvana
By Ed Romson, CEO, Rocair Corporation
How are you handling the million and one details of getting your company off the
ground? Success depends on good people, carefully crafted strategies, and impeccable
execution. One other component is a focus on customer care.
I'd like to address the question of how to set up support within an organization with this
white paper. Let me start by clarifying terms; by using the term "support," I am referring
to the technical support of customers. There are other issues involved in Customer
Service; publishing your product, order taking, money collection and distribution, to
name a few. While those tasks are within the scope of our Customer Support department,
they are not going to be covered here.
Many Companies "fall" into technical support, that is, they launch a product -- be it
hardware or software -- then sit back and hope that the phone does not ring. It will, I
promise you. Even if you include a disclaimer in your shareware product that is in 72-
point type and says, "Technical support is not included with this product," you'll get a ton
of email, and even phone calls (it is uncanny how some people are able find you). So,
let's start with this premise: Every product needs support.
The level of staffing, expense and effort spent on technical support varies depending
upon the level of sophistication of both the product and the company that produced it.
You can compare this issue to the concept of sailing. Sailboats come in various sizes and
have varied crew requirements. You can sail a small day sailer with one person, zipping
around the Bay all day, having a great time and getting one heck of a sunburn. You can
sail a 40 foot sloop with two or three people, spend days on board, and go long distances:
Trans-Atlantic or even circumnavigate, if you are so inclined. It costs more, but you
experience different thrills and challenges (notice I did not say "you have more fun"). A
large three masted barkentine, the workhorse of days past, requires a large crew and a
major investment, but to some people's way of thinking it is the most comfortable way to
travel and will allow the most work to be done.
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Are you with a day-sailer kind of company? Most start-ups begin here. One or two
people, probably the same people who wrote the code or engineered the product, answer
inquiries about the product and write bug fixes in-between trying to get Version 2.0 out
the door. You can survive like this for a while, but eventually you must go with your core
strengths. This is a theme I will return to often. Most programmers and engineers are
good at...programming and designing. Unless you really want them to get out from
behind the monitor and deal with (gasp) people, you'll need to rely on support
professionals to help customers.
This brings you up to the 40-foot sloop range. You are still the skipper; your hand is
firmly on the tiller. You may even haul a line now and then, that is, answer a particularly
thorny question. You leave the day-to-day sailing to your crew, however. They become
very good at answering questions and even set up a database of frequently asked
questions, posting it to your web site. They become the subject matter experts, second in
knowledge only to the people who actually write the central code or design the product.
Let's look at some of the economics of these support people and how you might go about
deciding how big a crew to press. To start, you have to agree on a "fully-loaded" price for
each person. By “fully-loaded” I'm referring to salary, fringe benefits, office space,
equipment, phones, Internet access and other miscellaneous costs. I'll take a stab at an
estimate based on my experience (admittedly with a large hardware and software
manufacturer, which shall remain nameless). Let's use a round figure of US$100,000 per
engineer (don't choke, just adjust the figure to match your experience and rerun the
numbers).
Most good technical support people can handle between 25 to 40 contacts per day. Lots
of factors go into this estimate; the complexity of the product, sophistication of the
customer, tools that the support person is using and method of contact (email, phone,
fax). I've managed organizations that were able to average 40 contacts per day. However,
we hit that number after lots of work and with a staff of 29 that had been working
together for over a year and had a constant flow of similar questions to answer. To be
fair, and set proper expectations, I'll use a figure of 30 contacts per day per person.
It is my opinion that, in order to provide for contingencies and for the mental health of
your support people, a minimum staff of 2 is required. Otherwise, vacation, sick time,
jury duty, you name it, hits. Then, one of your people will be off listening to the defense
attorney vehemently state that his client could not have been anywhere near the scene of
the crime, while your support questions keep rolling in.
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These "contingencies" bring up another issue, one that in Call Center parlance is known
as an efficiency, staffing or load factor. It is a factor that modifies the forecasting
equation to provide for the time that the support people are off for those events
mentioned above. I can't tell you the amount of time Call Center managers spend arguing
about this. Suffice it to say that, the "Theory According to Romson" is that one must
allow for a 20% staffing factor (your mileage may vary). This factor will affect the
number of calls per year each person will be able to take.
Chart 1.
|
Personnel cost (per person) | US$ 100,000 |
Number of contacts handled/day/person | 30 |
Number of people | 2 |
Efficiency factor | 0.8 |
Number of work days | 260 |
Calls handled/person/year | 6,240 |
Cost per contact | US$ 16.03
|
You'll notice that you are able to calculate a rough cost per contact from this model. Keep
that number in mind; you can compare these numbers to what is available if you decide to
hire a crew from the outside (also known as outsourcing).
Forecasting the number of contacts you will be offered is like forecasting the weather.
Worse, actually, since it depends on a sales forecast rather than a butterfly flapping its
wings in Brazil. Given this challenge, support managers use a number of formulas to
come up with a forecast. The factors that figure into this formula are much the same as
mentioned above regarding the type of product, customer, and contact methods you
encounter. Many software companies use between 35% and 50% for a contact rate. That
means for every 100 units sold, you'll get 35 questions. If you include hardware in that
equation the factor could go as high as 150%. Add novice users, and it soars to 300%.
Another reason your call rate could be as high as 300% is if your product is so complex
that the user must call for installation help. Some LAN products come to mind.
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Experience in taking calls and email will give you a real contact rate, but the most common dilemma encountered when setting up support is that you must start with a guess. Make an educated guess and verify it with experience, but have a contingency plan, in case the contacts go through the roof. For our hypothetical voyage upon the Sea of Support, I'll use a midrange contact rate of 50%.
Given that rate and the calculations we went through above, it appears that your 2
Support Engineers will be able to handle the results of the sale of 25,000 units of your
product (two people taking 6,420 calls per year, each call being the result of the sale of 2
copies of the product = 24,960 units). Not enough to match your sales forecast?
Congratulations! The formula can extend to millions of units; just add people.
Aye, but there's the rub. Do you want to invest in additional high priced support
personnel in-house or should you look to an outside company to do the first-line support
for you? You are quickly moving up to a much larger sailboat and you'll need to decide if
you want to sail her yourself or let an experienced captain and crew take you into the
future.
Let's recap what we have discussed before we go on. I discussed piloting your
own day sailer with a limited support staff, and captaining a larger organization
that provided "soup to nuts" support to your customers. We explored a formula
that showed the base cost of handling contacts and a method of that black magic
art, forecasting contact volume.
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Let’s continue on with an exploration of the controversy over whether or not to
outsource. Continued on page 2...
Continue on PAGE 2
Originally published in the BEOS Developer Newsletter (Be Incorporated), Issue 76,
June 4, 1997 and Issue 77, June 11, 1997. Revised, October 2001
© Copyright Rocair Corporation. All rights reserved.
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Sailing to Support Nirvana