I've done a lot of service projects in my life, and I've found that about 80% of the time, way too many people show up. It's not that there isn't a lot of work to do, it's just that whoever is in charge isn't organized in a way that they can utilize all of the available resources - lots of manpower, little direction. In fact, it often turns into 15 people walking around watching the person we were supposed to be serving, doing all of the work! That's not very helpful. So when my brother Trevor and I accompanied a group to New Jersey to help out with the Hurricane Sandy cleanup effort, I was shocked by how well we were utilized! Our group of 128 was immediately put to work, and able to help those who desperately needed it within an hour of showing up. Our productivity was dramatically increased because the group we went with was organized.
Over the last couple of weeks we have been thinking a lot about customer support vs. customer success. For the purposes of this article and several follow-up articles I plan on writing I am going to the define these two terms as follows: Customer support: Helping your customers solve problems they encounter when using your product. This includes addressing bugs as well as providing information about how to accomplish specific tasks with your product. Customer success: Helping your customers improve their business, their organization or their lives by using your product. Customer support deals with small, focussed issues. Customer success deals with the macro application of your product to achieve larger goals. To create real evangelists of your product or service you need to have great systems in place for supporting your customers, but you also need to have systems in place to ensure their success with your product or services. We are really good at customer support. We have great systems in place that help us address support issues quickly and consistently. But our results with ensuring customer success are more mixed. We have some customers who are fantastically successful with ScreenSteps and ScreenSteps Live and who evangelize it regularly while other are simply satisfied customers that are happy with the product. To a small company like ours the value of a thrilled customer who shouts our name from the roof tops vs. a satisfied customer who occasionally uses ScreenSteps is huge. If we were to put a monetary value on those customers the difference would be literally thousands of dollars vs. a one time $40 or $80 purchase. What is the main difference between these two types of customers? Our "satisfied" customers just use ScreenSteps to create documentation. They are using it to complete one of the tasks that need to get done in the course of running their business or organization. Our passionate users use ScreenSteps to *change* the way they run their business or organization. ScreenSteps and/or ScreenSteps Live don't just change their documentation. They change their business.
This week one of our service providers, Chargify, went through a major business model change that shocked their customers and caused quite a stir on the Twitter, TechCrunch and Hacker News. To their credit, they were out engaging early and often trying to quickly make modifications to their new plans to appease their angry customers. Yesterday Lance Walley, their CEO, posted about why they had to change their prices. Essentially, they had priced themselves into a corner. They worked primarily on a freemium pricing model but with a premium sales and support process. The two don't mix well. Their original pricing made it very easy for businesses to "try out" their service. Any business could use Chargify to manage up to 50 subscription users for free. After that there were various price plans based on the number of users you had. We already had a billing system in place before switching to Chargify but Chargify had a lot of features that were really nice, saved us a bunch of time and mode our lives easier. After starting out with the service we eventually became paying customers. The problem for Chargify was that they experienced all of the costs associated with our account when we were free customers. Chargify isn't simply a service you turn on and it starts working. Especially if you are going to use their API (which is the approach we took). Working with API's, no matter how good they are, takes time for customers and creates a lot of questions. Organizations that offer API's often have to spend a lot of time answering those questions. In our early days I had questions about the product and how it worked that were quickly answered by phone, email and Twitter. And I eventually became a paying customer. But according to what Chargify is saying, there were many, many customers that never converted from free accounts to paying accounts, simply because they weren't growing fast enough. Once again, most of Chargify's support costs were incurred while accounts were free (now that we are a paying account I rarely contact support at all). If your support costs are high for free accounts and very few of those accounts become paid accounts then your business will run into trouble very quickly which is exactly what happened to Chargify.