John Ragsdale, a contributor to SearchCRM.com, published a very interesting article today on the evolution of inbound support centers from cost centers to profit centers. Ragsdale further notes that, while consumer operations have widely embraced running support as a profit center, B2B marketers have been much slower. In the article he posts a chart sourced from the TSIA 2011 Benchmark showing that 29% of B2B companies run their support operations as a cost center.

Why do these companies ignore the potential profits to be gained from support operations?

Not in Charge?

Ragsdale reasons that the motivation behind why companies don’t mate sales with support is because the person calling would be an IT admin who does not have control over the account. The IT admin doesn’t have the ability to spend millions on hardware upgrades or other products. However, the admin may be able to spend a small amount on additional services or influence the purchases of the organization.

The IT admin could be persuaded to sign up for maintenance options that would make their life easier or attend a conference. Remember that there are multiple people who are involved in purchases:

  • Managers – They have the ultimate power over what gets purchased
  • Influencers – They help the managers decide what to purchase through social power, legitimate power, expert power, etc–whatever gives them sway over the manager’s opinions
  • Users – They will ultimately be using the product or service and will likely make their voice heard as much as possible.

Convincing the IT admin or IT personnel attend conferences or sign up for training could not only lead to increased revenue from fees, it could contribute to the long term relationship with your company. They are firmly wield influence both up at the managers and down at the end users. Managers will go to the IT experts for advice in understanding the technical aspects of your product. The end users will go to the IT staff for advice, training, and expert opinions on how the system will work. The better you inform them, the better they will inform the rest of the organization.

The Service Economy

Another interesting insight from Ragsdale was that sales of hardware and software licenses (-2.5% and -0.2% respectively) were down year over year, yet service and maintenance revenues were up almost 12%. More profits are coming from services with large “block” spending on licenses slipping in sales.

Service is important. It’s a sustainable differentiator and company’s are willing to pay for it. If a company is spending all its time mired in technology problems–if they’re losing functionality because of lackluster support–then it will be impossible for them to focus on their core competency. People also like being able to choose enhanced service for mildly higher fees. People like it when you can make their lives easier.

Ragsdale cites 4 primary sources for enhanced service revenues:

  • Tiered service levels – Having multiple service tiers at different pricing levels
  • Dedicated account managers – A dedicated technical account manager who knows your account and can be directly contacted for input
  • Proactive monitoring – Companies can monitor the client’s systems constantly, automatically spurring support to resolve any problems that are detected
  • Managed services – Customers contract with vendors to manage implementations and administration of systems

Emphasizing these offerings during service encounters could boost profits for the support center. They can help make existing customers more profitable while also increasing satisfaction through higher service levels. Yet one has to wonder if all these fee-for-service options are truly a good idea. Shouldn’t companies already offer the highest level of service to customers? Companies can get frustrated by a constant sales push and endless fees. The key seems to be in balancing the profit center transformation to achieve real benefits that have the customer at the center.

Is your support center a profit booster or a cost drain? Have you implemented any additional service offerings? Annoying trend or the face of the future? Share your thoughts in the comments below.

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