What is the best way to communicate to clients that you are raising your rates?

Focus.com question from March 20, 2012: “What is the best way to communicate to clients that you are raising your rates?

I am about to raise our rates and I am wondering if anyone can lend some advice to do’s, don’ts, best practices or any other techniques that might be handy.

Additionally I have a few clients that I give a discounted rate to that are aware of it. I would like to do away with this discounted rate but would also don’t want them to feel offended or that they are any less of client. Any advice on how to handle this?

Lastly in addition to actually using this advice I will be writing about this subject for a well read online technology magazine. If there are any experts out that can chime in on this topic I would gladly quote you for the article and link to your website.  The blog is a PR8 site so the link is well worth it,

Response from Tim Giebelhaus:

Assuming you are raising your rates because your costs have gone up, I would be honest with the clients. The clients do understand you have to make profit to stay in business and, if they value your service, they want you to stay in business. If, on the other hand, they believe they are being gouged, then they will look to another provider, even if there is not a significant savings.

While you want to be somewhat transparent as to your costs, be careful not to give too much detail or you’ll find some customers wanting to trim your budget in areas that don’t provide them much value (but are valuable to other customers). The largest costs are generally the ones the customers value. I’ve never found a customer wanting me to trim my support staff.

It is important to communicate the change in rates as early as possible so that the clients have a chance to adjust their budgets. You don’t want the situation where the client has finished the budget which will barely get them by and then you surprise them with the increase.

To reduce or remove a discount, a customer will want to see a difference in the situation that justified their discount to begin with. If they are not spending as much as they thought they would at the time the discount was offered, that is one of the easiest justifications. It is always difficult to remove a discount. A discount on a service contract is a very large discount as it is a discount on years of revenue instead of a one time discount.

If it is an increase you feel might be a problem for customers, I would introduce the increases to the largest customers in person. Ideally, there is a large enough lead to the increase you can work a heads up into a regular visits. If not, I would want at least a phone call.

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What action do you take when employees resist change?

Focus.com question from December 9, 2011: “What action do you take when employees resist change?

Response from Tim Giebelhaus:

Using an example, the biggest resistance to change in technical support I have seen is the use of the knowledge base. I give them the industry studies that show how much more productive it makes support and talk about those studies. I talk about my previous experiences with knowledge bases. I look for others in the group who can give a testimonial about how useful the tool has been to them in previous jobs. In the end, there are a small number of skeptics. I have to ask the hold-outs to trust I know what I am doing and give it a fair try. In two months or so, I make sure to point out the improvements. The skeptics acknowledge it is a great improvement and the next change is that much easier.

To summarize, get the buy-in of as many as possible and then have the hold-outs give it a fair try. Point out successes of changes to make future changes that much easier.

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What hiring approaches can improve customer service long term?

Focus.com question from May 6, 2011: “What hiring approaches can improve customer service long term?

This question is from the Focus Roundtable: Retaining Service Quality Within a Growing Company.

Response from Tim Giebelhaus:

The most important information I am after in the interview of a customer service position is if they like helping people. I like to see some form of a service job in their history, even if it is just a waiter/waitress. I ask about their experiences and what they liked and disliked. If I can understand how they like helping people, even when they are difficult to help, I have a good idea if they will work well with the customers or burn out in months.

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Does a dress code necessarily need to apply to back office personnel, not seen by the public?

Focus.com question from November 8, 2011: “Does a dress code necessarily need to apply to back office personnel, not seen by the public?

To my way of thinking, receptionists and other front office people, and anyone who will be meeting clients or the public, ought to observe a dress code appropriate to the work of the company and their position. But what about back office people, who may never meet with the public?

Response from Tim Giebelhaus:

I’ve found some dress code is eventually necessary. It is desirable to have people wearing clean clothes in a reasonable condition and not very provocative. I’ve found that customers do get into the back office. They don’t expect the software engineers to be wearing suits, but they do expect a level of professionalism. Also, a team needs to work together and all team members should understand each others values and make an effort to work together.

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When is the best time to collaborate with your customers?

Focus.com question from December 9, 2011: “When is the best time to collaborate with your customers?

When you’re planning on launching a new feature? When you’re considering changing strategies? When a number of people have complaints about the same thing?

When is the best time to collaborate with your customers, or should customer collaboration be an ‘open door policy’ of sorts?

Response from Tim Giebelhaus:

The earlier the better.

With large customers under NDA, you can get some feedback from people who would actually be using the feature and find a potential issue. The customer will appreciate the chance to give feedback and you will further build a partnership relationship with the customer.

For all customers, the better the heads up on a change you can give, the better their chance to plan for the change. The better the customers can plan, the more successful they will be with your product. It also gives a chance to build excitement about the future release and reenforce the perception the product is continually being improved.

The down sides of share are setting expectations about the future release and possible leaking of information too soon. Clear communication with the customers of where things are in the development cycle will keep the expectations under control. A customer who feels they are your partner will not want to hurt you by leaking information. An added incentive not to leak information is the NDA.

I find when sharing information early, there is a very low risk of down side and a very big up side. It will help the customer be successful with your product and their success will encourage them to be a reference and make the relationship a long term relationship.

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Do you have a customer that makes you shed your stomach lining?

Focus.com question from November 8, 2011: “Do you have a customer that makes you shed your stomach lining?

I do. However, he has brought a lot of large repeat business over the five years that I have worked with him. His major downfall is that he fixates on price. Everytime I go to do a large deal with him he suddenly has a new “relationship” with a competitor to drive down my pricing and margins. He also thinks that he should not have to pay any service or support fees. I base my sales on value driven relationships that benefit both parties. Any thoughts on how to turn this around? My supply of Tums is dwindling.

Response from Tim Giebelhaus:

There are couple things I do to combat the situation of people looking for extreme discounts.

The first is to create a “Basic” product with little service offered. That gives the person an option and even if they don’t like that option, they don’t feel hostage to a higher priced option. The customer can then decide if the cost gives them enough benefit to go for the option with more service.

The second is to have a discussion about the resources he has available with support and a reminder about the costs of those resources. While I don’t go into details, I am quite up front with the customer that I have to make some profit to stay in business. Most customers want you to be around in the years to come so you can continue to provide them the value they are buying from you today.

Taking this to the next step, create a partner relationship with the customer. Make sure he perceives you are listening to his issues and you are working together to ensure he is getting the maximum value for a reasonable cost. If you can get to there, he will likely take that same determination that was used to beat you down on price and use it to be an advocate for you. With some personalities, it can be a challenge to get there, but very rewarding once you do.

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Is First-Time-Resolution (FTR) the most important Customer Service metric?

Service Value Management LinkedIn group question from November 9, 2011: “Is First-Time-Resolution (FTR) the most important Customer Service metric?”

Both the research from the Executive Board and studies presented at the Technology Services World indicate that the degree of customer effort in resolving a customer issue is a or *the most* crucial predictor of customer retention. Does that make First-Time-Resolution the most important Customer Service metric?

Response from Tim Giebelhaus:

FTR/FCR is a good predictor, but to really know what the customer perceives, it is important to ask them. I like to use Customer Satisfaction or NPS (I find they track very similar). I am looking further into the Customer Effort Score to see if that is a better indication to if the customer better indication of customer loyalty. Another indicator worth considering is the Secure Customer Index (developed by D. Randall Brandt, PhD, Maritz Research). A dropping FTR or FCR can help me understand why my customer satisfaction is dropping, but the outcome that is desired is customer satisfaction, loyalty, and advocacy.

Phil Verghis (http://www.verghisgroup.com/) made a presentation at the First Wednesday Group (http://www.first-wednesday.com/) that makes a good case for setting goals on outcome based measurements vs. activity based measurements. What we really care about is the outcome of our activities; that is what makes a company successful. Activities do not necessarily lead to outcomes that bring success. I find it useful to be able to pull up the activity data when I need to understand why outcomes are not where desired, but I find they do not as reliably tell me the level of success we are having.

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Do you find call center employees avoid calls?

Focus.com question from October 24, 2011: “Do you find call center employees avoid calls?”

Do they take themselves out of the queue or what other methods do they use?

Response from Tim Giebelhaus:

Support employees are generally a very bright group. They can find many inventive ways to avoid calls. The way I avoid that kind of behavior is to measure the number of calls taken and the level of customer satisfaction. If one person on the front line has much lower calls answered than the rest, I’ll be looking to find out why and likely be taking corrective action.

Once the call is taken, I want to make sure the customer’s experience is a good one. We’ve probably all heard the stories of people who immediately hang up the phone after answering because the only thing measured was the number of calls taken. They far exceed their goal, but only frustrate customers. If one person’s customer satisfaction numbers are significantly lower than the others, I am definitely working with them to improve those numbers. I remind the employees that the customers are the people who are paying our salaries.

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With the retirement of the ‘Baby Boomers’, is face to face customer service dying?

Focus.com question from October 13, 2011: “With the retirement of the ‘Baby Boomers’, is face to face customer service dying?”

Response from Tim Giebelhaus:

While there are more options to communicate with the customer, there is no replacement for face to face communication. Face to face service may decline some as other communications are used, but I firmly believe it will not die.

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For a small business with 5 CSRs, is it better to divide them by territory or work as a team?

Focus.com question from September 13: “For a small business with 5 CSRs, is it better to divide them by territory or work as a team?”

There are currently five Customer Service Reps, each supporting their own territory – this is the current model of this small business. I am thinking about proposing a model where the CSRs respond to inquiries as they come in, and as a team. I think this may provide more flexibility for the business but I am concerned about the trade-off which is giving up the current one-to-one relationships between customers and CSRs. Any advice is welcome!  Thank you.

Response from Tim Giebelhaus:

For small teams, I’ve always found higher satisfaction by using the first available CSR instead of territories. The main difficulty is when two issues come in at the same time for the same person. It may take quite some time to resolve the first issue before the CSR gets to the second issue. If the second issue is a simple one, the first available CSR can likely address it very satisfactorily. If the issue is very complex, it is likely helpful to both organizations to pass it to the person who is most familiar with the situation or the person most familiar with the technology when that person is available.

A second difficulty with the territories is it does not as effectively build the team cooperation that leads to the highest satisfaction. Especially with a small team, I look for the team to work together to bring the best resources to each case. Each member brings unique skills and styles. Working together to apply the best skills and styles to each issue is very effective. Some people work better with some personalities and some cases require specific knowledge. A knowledge base is extremely helpful in distributing knowledge, but experience with a technology always gives additional value.

If you decide to transition to first available CSR, I would do it very gently. I would always give the customer the option of waiting for the CSR they are used to dealing with, but let the first CSR available offer to help while they are waiting. Over time they will be more comfortable working with other CSRs.

Keeping good notes in the CRM system is even more critical when switching to a first available CSR system so each CSR can easily read any special circumstances for each customer and see the case history. It won’t be the same as someone who knows the account personally, but it will make a much smoother transition.

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Is ignoring a Twitter complaint like hanging up the phone on your customers?

Focus.com question from September 12, 2011: “Is ignoring a Twitter complaint like hanging up the phone on your customers?”

You wouldn’t hang up on your customers when they call you or ignore their complaints via email, so why do so many companies continue to ignore complaints via Twitter or Facebook?

Response from Tim Giebelhaus:

Ignoring a Twitter complaint is not like hanging up on a customer, but a decision which channels to monitor. Ideally, we would like to address every issue completely, no matter what channel the issue came to us. In reality, there is a cost/benefit decision.

Google is the primary example of a company that very much limits their support and still has a largely loyal customer base. Here is an article that explores Google’s limited support: “Shocker: Great Customer Service is not for everyone” http://thepaceofservice.com/archives/214. I generally agree with the article, but have some reservations. More can be found at http://giebelhaus.biz/?p=163.

In addition, some companies have not done the cost/benefit decisions of monitoring Twitter. A very large company focused on consumer products is most likely to benefit from a strategy to monitor the Twitter stream. A small B2B company will generally have little to no complaints on Twitter.

It doesn’t seem to me that most people who complain about a company on Twitter are expecting a response from the company. Some may be posting a very frustrating experience with the company in hopes to generate a groundswell to change the outcome with the company, but largely it looks like people are venting without an expectation the company will respond. That doesn’t necessarily mean that it would not be in the company’s best interest to respond, but it does mean that it won’t further frustrate the customer by not meeting an expectation. Customers definitely expect that once they reach a company, they will not be hung up on and doing so will hugely frustrate that customer and further damage the relationship with that customer.

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What is the role of knowledge management in customer service?

Focus.com question from July 8, 2011: “What is the role of knowledge management in customer service?”

Response from Tim Giebelhaus:

The role of the knowledge system in customer service is traditionally twofold:

1. Used by the customer service representatives to answer the customer’s questions
2. Used directly by the customer to answer their own questions through a web portal

I have also found it useful for the customer service representatives:

– To easily find the up to date versions of policies and forms
– Record the number of times bugs and enhancements affect the customers (marking each case with the KB document corresponding to the issue)

In addition the knowledge management system can be used by many different departments to help others in the company which then also further helps the customer service representatives.

– IT documenting common questions and issues
– Marketing publishing their materials
– HR policies and procedures

I will reiterate the above two comments. For nearly any product, the knowledge system is an extremely important investment. It’s value is perhaps only second to the CRM system. A well populated and maintained knowledge system is the tool the customer service representatives will value the most. Many customers will value being able to answer their own questions and their being able to do so reduces the load on the customer service department.

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Great Customer service is not for everyone. There I said it. My fellow customer service leaders may hate me for saying it, but it is true.

The First Wednesday Group LinkedIn forum question from July 19, 2011: “Great Customer service is not for everyone. There I said it. My fellow customer service leaders may hate me for saying it, but it is true.”

[Note: you need to be member of The First Wednesday LinkedIn group to follow the above link, however, the below link is to the article the discussion references.]

Shocker: Great Customer Service is not for everyone from thepaceofservice.com

Response from Tim Giebelhaus:

Great customer service would be helpful to Google, though it almost certainly is not worth the investment. Customers have lower expectations of customer service since Google’s offerings are low price to free. There is also a great deal of help available from third parties since their offerings are so widely used. Even if they had great customer service, Google would still want to encourage the community involvement it has today.

However, if a CIO were paying hundreds of thousands of dollars for a Google service and the CIO’s president was perceiving a major problem affecting their business, I’m sure that CIO would very much be looking for some place to call to get it resolved quickly.

I disagree to an extent about Apple support. I think Apple, more than the customer experience, exceeds most other companies with comparable products in customer service. I’ve called Apple customer service a couple times and, for consumer products like iPods, they did very good. I’ve also used the service at the store and I’ve yet to leave there without my problem resolved. My hardware issue got me an instant replacement. I’m not expecting onsite service for a $300 item; however, I appreciate not having to run through a checklist over the phone with someone who has never seen the product. I liked that I didn’t have to pay for shipping and wait a week for my repair.

I believe great customer service is always helpful, but not always the best business decision.

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Can empathy be scripted or can it only come naturally?

Focus.com question from June 30, 2011: “Can empathy be scripted or can it only come naturally?”

The impact of social media on customer service seems to have resulted in a more empathetic type of customer service. I’m wondering if you can, in a sense, script empathy into a customer service experience, or is it something that comes naturally to only some agents?

Response from Tim Giebelhaus:

Having real empathy is better. Customers can often tell if the empathy is not genuine and it hurts the trust relationship, which is extremely important in support, if the customer believes the empathy is not what the support engineer is actually feeling. Some people are much better at empathy than others. As Bill says above, it is important for the manager to bring out the best in our staff. I keep my staff focused on the perspective of the customers. If they can put themselves in the customer’s shoes, and treat the customer as they would like to be treated, that provides a framework that encourages empathy.

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Who should “own” social CRM? Sales? Customer Service? Someone else?

Focus.com question from May 31, 2011: “Who should “own” social CRM? Sales? Customer Service? Someone else?”

Which department should own social CRM and why? Or, is social CRM a tool that should be owned by the entire organization as opposed to one singular department?

Response from Tim Giebelhaus:

The most success I have had with this is when IT owned the system. Many different departments want to make improvements in the system and IT could work all of those together. IT had on staff a person to customize the system and that person knew what each department was doing and was great at meeting the many requirements. For all but small companies, if multiple departments are going to be using the CRM, I strongly recommend having someone dedicated to maintaining and improving the system. There is always enough valuable work to keep that person busy.

Posted in CRM/KB, Support Practices | Leave a comment

I’d like feedback on support model that removes “support@xyz.com” email address. What are pros/cons? I’m needing to obtain senior mngt “buy in” on this new strategy.

Association of Support Professionals LinkedIn forum question from May, 2011: “I’d like feedback on support model that removes ‘support@xyz.com’ email address. What are pros/cons? I’m needing to obtain senior mngt “buy in” on this new strategy.”

[Note: you need to be member of the ASP LinkedIn group to follow the above link, however, it is an open group.]

Response from Tim Giebelhaus:

I don’t get rid of the support@xyz.com email, but instead give the customers more service through the website. The auto-response to the email lets them know about the website and their ability to set their priority, see their history, access to the knowledge base, etc. The support engineers also mention it. The web interface serves the customer better and we point that out to them rather than eliminating the support mail.

One way to get rid of the spam for the email address is to only accept emails from domains (i.e. xyz.com) that are known customers. If the domain is not known, an auto response apologizes that they are not in our system and to please go to the website and register.

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How did you determine which CRM software was right for your organization?

Focus.com question from May 23, 2011: “How did you determine which CRM software was right for your organization?”

Response from Tim Giebelhaus:

There are books on this topic, but to boil it way down, I start with finding what sales requires. If support and sales can use the same tool, that can save integration difficulties, though it always comes at a price. The tool that best meets technical support needs, is extremely unlikely to also best meet the sales needs. It may be a better match to integrate two systems, but not generally. On the support side I require the following to be very robust:
– Case tracking
– Customer portal
– Knowledge base

If the knowledge base is not integrated into the CRM there at least needs to be a way to easily integrate it. It is important to make the knowledge base part of the work flow for both the customers and the support engineers. Providing suggested answers from the knowledge base when a customer submits and issue is a big plus. Customers should be able to mark documents they find helpful to put those at the top of the list of future searches and to provide product feedback. The ability for the support engineer to run an auto knowledge base search from the customer’s description of the issue can be a time saver. The support engineer also needs to be able to mark which knowledge base document solved the customer’s issue. A document that answers a very large number of questions is an area where the product, documentation, or both may need to be improved.

Knowledge base searching is critical. Customers who find their own answer easily will not call and support engineers who can easily find solutions are both more efficient and greatly improve customer satisfaction.

It should not be very time consuming to enter data in the case tracking system or the knowledge base. The case tracking part of the system needs to be easy to search so it can be easy to find the history when required. The customer portal, in general, needs to add excellent value to my customers, both for tracking their issues and using the knowledge base. There needs to be a way to get the reports I need out of the system (which does not first involve importing everything into a database every time I need to do the reports).

For small or medium businesses it is very helpful to have something that is fairly easy to customize. For a large business it may make sense to have something extremely flexible, but may require hiring a full time person or more to do the customizations for sales and support. When first implementing, it is very likely a good idea to include in the budget some consulting from the vendor to help get the system started in any case.

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When is it time to walk away from a customer and stop doing business with them?

Focus.com question from May 15, 2011: “When is it time to walk away from a customer and stop doing business with them?”

We’ve all been in situations where a customer complains so much it is nearly impossible to please them let alone be able to make a profit off of them. What should the criteria be for ending a relationship with a customer and telling them to take their business elsewhere?

Response from Tim Giebelhaus:

To the points already made, I would add if it is a personality issue, the majority of time that can be corrected. If the product does not meet the needs and no plans are in place for it to be able to meet the business needs, then it is time, for the benefit of both companies, to let them go.

A majority of time, personality issues can be worked addressed with the customer’s company. If the business needs are met and the contact at the customer site is abusive, have a talk with them and ask what the difficulty is. If they continue to be abusive, it is time to have a talk with their manager about the desire to have more professionalism. If presented as a partnership, the manager is nearly always happy for the constructive feedback and can use it to better develop their employee.

If the contact is the executive management, talking to them directly is nearly always effective. If their business needs are being met, they will value the relationship and be willing to be more professional to make that relationship work better.

If their business needs are a bad fit for my product, it is very likely they will eventually leave once they find a product that is a better fit. Unless it is in the business plan to change the product to better fit that customer, it is best not to use a great deal of resources to keep them for a few more months. It is a much better use of resources to let explain to the customer we won’t be able to meet their expectations and perhaps even point them to a vendor who will. It is the best chance of them coming back if their needs change or the product does meet their needs in future revisions.

The exception is when there is an overriding business need to address the customer needs such as a contractual requirement. Then it is necessary to do what is necessary to provide value to the customer.

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How do you define what a customer need is?

Focus.com question from May 4, 2011: “How do you define what a customer need is?”

What does it look like when they communicate it to you? Do you project what you think it is? Is it a specification? Is it a benefit? Does it look like a deliverable? Does it incorporate a solution into it’s description.

Do you have a specific definition? Does your entire organization use it?

Response from Tim Giebelhaus:

Customer need is often defined as one of the following two:
– What is the customer willing to pay for?
– What is required to reach customer satisfaction?

To measure these, it is either judging human nature if you have no baseline data or measuring changes to what is provided through revenue and customer satisfaction surveys. Answering the question of what revenue would a new feature bring in or how much additional customer satisfaction will fixing a bug bring about can be very difficult. There is the occasional obvious case, but much more often it is a judgement call. Technical Support, with their frequent interaction with the customers, often have a good idea, but it is difficult to quantify without surveying or focus groups. Both these take money and time so are not always used.

I would be very interested to hear more from people on this topic as to what is most effective.

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What Are The Key Steps To Client Retention?

Focus.com question from April 13, 2011: “What Are The Key Steps To Client Retention?”

How do you create exit barriers to prevent competitors from eroding your client base?

Response from Tim Giebelhaus:

Everyone has good comments above. I would like to add the perspective that it is a partnership. We work together with our customers. The customers pay our salaries and we provide value. As with any long term relationship, I believe honesty and respect are very important. A customer who has had their problem handled well is more loyal than the customer who has never had a problem. The problem gives the customer a chance to see that they can trust us to take care of issues and not just take the money and run. I always strive to give the customer the service I would expect to receive if I were the customer.

I give out my cell phone number (I have it printed on my business card) and personally ensure we make good on our promises. The customers value that relationship and nearly always only use the cell phone number if very necessary.

Over time, the customer will trust your company will stand behind them and they will not easily give up a company they can trust.

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