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Premium Support – The Only Premium is the Price!

by Rob Addy  |  April 27, 2012  |  Submit a Comment

Premium support offerings should deliver, and be seen to deliver, premium value.  Unfortunately, many don’t.

The product support service value proposition is based on 4 foundational elements:

  • Mitigation of the impact of failures i.e. productivity loss minimization
  • Increased availability, improved stability and reliability i.e. reduced risk
  • Achieving a greater return from the technology investment i.e. more bang for their buck
  • Internal cost savings / Reduction in the total cost of support i.e. operational efficiency

The word “premium” implies better, more desirable, more valuable. Historic models for Premium Support often fail to address the above value points let alone add to them. The differentiation between the base level offering(s) and the premium offering(s) is key. If there are insufficient tangible differences between support service tiers then customers will resent paying more and opt to “make do” with the lower value cheaper alternative.

Failing to offer a choice of service levels is tantamount to leaving money on the table. Offering too much choice will create confusion and result in lower net revenues (If you don’t believe me, look at the Costco model for retail – restricting buyer choice in an intelligent manner encourages people to make positive decisions from the provider’s perspective). Offering choices that the customer does not understand is also a potential issue to avoid – Whilst in a coffee shop in the US this week I was asked if I wanted my cappuccino “wet” or “dry”. Seeing as it was a beverage I assumed it would always be “wet” but it seems that my lack of understanding of the intricacies of Texan barista best practice opened me up to peer ridicule, polite smiles and a slightly condescending explanation of something that I had no interest in whatsoever.

Premium support offerings must justify their increased fees by:

  • Responding (as opposed to reacting) to service impacting events more effectively i.e. predefined response plans, contingent actions to mitigate the potential effects of a failure etc
  • Proactively intervening (as opposed to just proactively alerting) to prevent more issues (and mitigate the effects of predicted failures that cannot be avoided) than base line services
  • Offering increased levels of routine task outsourcing and automation to help decrease the internal staffing requirement in order to reduce the total cost of support further
  • Understanding more of the details of, and interdependencies within, the customer’s operation to be able to best position the solution and promote its capabilities to deliver increase business benefits

Staff augmentation is not an effective or sustainable differentiator

Staff augmentation plays are often used to differentiate premium offerings from base line services. This distracts from the Premium Service value and causes providers to fail to analyze their premium support value propositions properly. Staff augmentation may be a long term requirement for customers. However it is not always. It is common to require embedded provider personnel whilst a new technology implementation stabilizes but this requirement often disappears when the customer’s in-house team gain the required level of skill, experience and knowledge. Staff augmentation can not, and should not, be relied upon to differentiate premium support value.

So how should providers differentiate their high end offerings?

Some traditional differentiators are flawed…

  • Technical account managers… (See my previous posting regarding “Sam I am”)
  • Improved response time objectives / Priority case handling (i.e. queue jumping)… Customers may say that they want you to be quicker at fixing things after they break but what they really want is for you to make sure the stuff doesn’t break in the first place!
  • Dedicated communication channels (i.e. the customer specific hot line)… Really? I mean… come on… It may have worked for Commissioner Gordon in Gotham City but it is really necessary in a world of intelligent call routing?
  • Greater numbers of permitted customer contact points – Arbitrarily restricting the number of contact points you have within your customer organizations is silly. Expanding your sphere of influence and understanding of the customer environment is always a positive thing. Why would you handicap yourself in this way?

Some aren’t…

  • Dedicated engineers… Often a wasted opportunity. If they are truly spending time getting know a customer’s implementation then they must have formed an opinion of its relative level of health, efficiency and potential. Why not have them share these opinions?
  • Performance tuning services… Good valuable stuff that helps the provider to help the customer to help the provider etc.
  • Time boxed consulting service credits… Enables customer’s with limited discretionary spending authority to bank some cash to use on proactive focused initiatives (which is always a good thing).

Additional stuff that could / should be in the premium mix

  • Anything from the right hand side of the Gartner Product Support Maturity Scale v2
    • Premium content streams
    • Change Management process involvement
    • Capacity planning
    • Lifespan extension consultancy
    • Feature / Function deployment planning services

Is the above listing exhaustive? No. Is it a good starting point? Yes, I think so.  Premium support offerings should be the innovation incubator of the support industry. High end support services should be seen as the equivalent of Formula 1 / NASCAR within the automotive industry.  Just as developments and advances within Formula 1 / NASCAR eventually find their way into the standard family hatchbacks of the major car vendors, premium support has the potential to be the proving ground for innovation and advances within the field of product support. Unfortunately, all is not as it should be.  Many providers fail to consistently and fully deliver upon this potential.  But the opportunity is there. And it is real. Grab it with both hands!

TRKFAM!

 

“And the winner is…”

Regular readers (thanks Dad!) will recall that I offered an amazing prize a few posts ago to anyone who could come up with some novel use cases of mobile apps in the support context. Jim Roth from Dell took my suggestions and extrapolated them to devise “Shazam for Fans” – A delightful branding derivative that made me smile. Look out for it in your app store of choice soon (maybe) – Jim, I will deliver your prize in person the next time we meet. I of course look forward to receiving my share of the proceeds from the many millions of downloads it will undoubtedly attract 😉

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Category: support-strategy  support-value  

Tags: gartner-product-support-maturity-scale  support-value-chain  trkfam  value-proposition  

Rob Addy
Research Vice President
5 years at Gartner
More years than I care to remember in the IT industry

Welcome to my blog! I post about all things services related from the provider perspective. End-users are welcome to read but please be aware that you may sometimes find its content unsettling. I will endeavour to post frequently (as it's a lot cheaper than a therapist) but please forgive me if other more mundane activities occasionally get in the way...Read my official Gartner bio here




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