Live support (phone, chat) is increasingly being phased out by companies in favor of systems that require – or highly encourage – their customers to self-support when they have questions or need help. As a result, more people than ever are using self-support to find information, solve problems, or diagnose issues. But this shift in behavior is not due to a choice on the part of consumers to eschew live support in favor of self-support, but rather to the industry forcing behavioral change on consumers in order to reduce costs.
Two large online businesses, Rackspace and Zappos, have adopted a different model, “Customer Support as Primary Sales Channel” (CSPSC). Contrary to common industry practices, these companies drive as many customers as possible through live support channels and use self-support to strengthen the consumer experience. Their primary goal is not efficiency (the hallmark of a self-support model), but rather to touch as many customers as possible to develop personal, human-to-human relationships – relationships that lead to strong brand loyalty and high levels of engagement, which in turn drive more sales and result in higher profits.
Opponents to the CSPSC model claim that live support appeals to older customers and that young customers prefer the self-support model. They presume as time goes by, the shift from live to self-support will increase dramatically. Zappos in particular has proven this idea false by demonstrating young buyers respond just as favorably to live support as self-support.
This excerpt from a Forbes article on Zappos sums up the spirit of CSPSC very nicely:
“While Zappos uses technology to make the customer experience easy and hassle-free, they recognize that there are just some things that technology can’t do. Nothing can replace the human touch, especially when that person is empowered to go to just about any lengths to help the customer. They understand that the customer experience is not singular, but it’s in each of those singular moments when interacting with the customer that loyalty is forged or lost.”
Most companies look to reduce the cost of customer support, but Rackspace and Zappos seek instead to invest in it – and heavily. In the CSPSC model, every dollar spent drives multiple new sales and reduces the average cost of acquiring new buyers. Support driven sales are more cost-effective than advertising driven sales.
Higher customer support ratings (Zappos and Rackspace routinely win best-of-industry awards) and higher gross margins emerge because CSPSC companies can charge premium prices. Customers are willing to pay more because of the human relationship they develop with the company, and live support is seen as an integral part of the product they are buying.
Live support also creates a natural competitive barrier between the companies who practice it and the rest of their competition, who are usually in a race to the bottom on prices, necessitating low-cost self-service support in order to compete on price. The CSPSC folks routinely spend as much as 60% of their operational budget on live support personnel, but successfully maintain premium pricing.
For those that doubt the power of live support over self-support, just walk into an Apple store. Apple stores earn more profit per square foot than any other major retail operation in the world. They also have more sales/support staff per square foot than any other major retail store in the world.
SavvyCard has chosen to embrace the CSPSC model, while building an extensive and comprehensive system of self-service support options. Our primary support channel is – and will continue to be – live support through phone, chat, webinars and in-person trainings. We choose to seek out live interactions with our customers as often as possible. We strive to empower our clients to choose the support system that best fits their personal needs. And we promise to be here for our customers whenever they need us.
Nico, a SavvyCard Customer Advocate, trains a new SavvyCard user through a live web demo