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Startups, Keep Your Support Costs in Check!

Posted by Luc Vezina on Nov 10, 2015 11:00:01 AM

2 minute read


Startups! Keep Your Costs in Check!

 

This is the dream:  each month you get more customers and more revenue. You reinvest that revenue into your sales and marketing efforts and get even more customers. You build a well oiled customer acquisition machine and prepare for glory. What could go wrong?

Keeping Costs Low is Key

One challenge for startups is keeping your “cost of good sold” (COGS) as low as possible. For tech startups,  COGS are things like hosting, the cost to support customers, and customer onboarding. The amount of money you have to cover development, sales and marketing is (Revenue - COGS.)

When you first get started, it’s easy to underestimate customer support costs. Everyone on the team pitches in and helps customers get launched and supported over time. Once you have a hundred or so customers, your support tickets start to pile up, you discover that customers aren’t aware of all the capabilities of  your product and customers in far away time zones are waiting hours for responses.

How a Customer Community Can Help

A great way to keep support costs in check is to roll out some self-serve options. Documentation, FAQs and a customer community are a great place to start.  Customer communities are another. They allow  customers  to answer each other’s questions or find the official answers written by your  support staff with a quick google search. This, in turn, deflects support tickets from your staff. The more  question-answer pairs your community generates, the more useful it becomes to your customers. Modern customers don’t want to sit in a phone queue or webchat. They want to find their answers online, fast.

Let’s talk hard ROI.  What is the cost for your support team to close a single ticket? Obviously, this will be different for different types of businesses, but let’s put it at a ballpark of $10,  (based on a ticket volume of 20 tickets a day, five days a week for a yearly CSR cost of $52,000). Every question that your community forum deflects saves you ten dollars in support costs. Our recent study of customer communities showed that the average discussion was viewed 87 times, and 82% of these questions were answered by other customers. This data seems to show that an impressive ROI is not hard to achieve. Customer support communities also pay back in less direct ways:

  • Preventing customers from churning out
  • Upgrading users through best practises adoption
  • Providing product feedback
  • Helping to reward brand advocacy

Don’t Let Support Costs Creep Up on You

Support is something that no one wants to think about, but as your business grows escalating costs are inevitable. Set up scalable, self serve support options for your customers as soon as possible and reap the rewards long term. Don’t wait until you have tickets piling up, angry customers and a sudden, urgent need for more staff. Let your customers help themselves.

Topics: Community, News, Support

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