I’m going to start things with a simple statement:
Providing poor support may be a leading cause for customer churn
What is customer churn? Customer churn is when customers stop using your product or service. This is commonly tracked with the “churn rate” which can be calculated as:
\[\text{churn rate} = {(\text{users at beginning of period} - \text{users at end of period}) \over \text{users at beginning of period}}\]Why is churn bad? Customer acquisition is not cheap (CAC) and can be up to 5-25x more expensive than keeping existing customers. If you care about your bottom line, this is key.
Now let’s look at why poor support could be a leading cause of churn.
A Tale of Support Experiences
The following are a few examples of customer support situations I found myself in recently; they were so polar opposite that it motivated me to write them down and discuss the impacts of each. Both led to significantly different outcomes, some positive and the poor experiences leading to me churning off a vendor.
Example 1: Bad
In my role, I produce many videos for external enablement, and we leverage a mix of YouTube and another vendor, which I will refer to as “Foo.”
One evening, I had trouble uploading videos I worked late to produce, so I contacted their support to see what was happening. I heard back the next day, and this was the response:
“Hi there,
Thank you for contacting ‘Foo” My name is **** and I’ll be happy to assist you.
I sincerely apologise for the inconvenience caused to you.
Upon checking the account associated with the email(***@devrev.ai), I can see that you have signed up for a **** membership. Please be advised with **** membership you’ll be able to upload upto **** videos per year.
In this case I humbly request you to make sure that you have logged in to the account while trying to upload and please clear the cache, browsing history, then try uploading the video. If you are still facing the same issue please share the screenshot of the error.”
Poor grammar aside, we are nowhere close to the video limit, and essentially the “resolution” or advice was worthless. I responded with screenshots of the issue and more detail; however, I still have not heard back from their support as of 48 hours in. They didn’t have any chat support (this is probably the most critical medium for support nowadays) or a phone number to call, so I was stuck waiting for their slow responses.
One of the support threads was “ghosted” with no response from support after attaching screenshots (18 days without a response as of publishing this post). I was so desperate for help I even messaged people from “Foo” on LinkedIn for support (I still didn’t get a response). Finally, I did resolve the problem; however, without their help.
Based on the above example’s poor experience, I am now working to cancel our plan with that vendor and migrate to their competitor. Given it is a SaaS service, the migration is extremely painless.
With non-tangible items delivered “as-a-service,” the cost of migration is lower than ever. Optionality is real. If we don’t provide exceptional support when problems occur (they will), what’s stopping the from churning? They key lesson here is: take care of your customer!
So what were the outcomes of this experience?
- Inability to chat or directly contact support led to a frustrating experience
- Poor support was the cause of our migration to their competitor
- Vendor loses a growing customer
- Vendor gets negative customer experience and rating
- Vendor’s competitor gains a customer
Example 2: Good
I dropped my wife’s car off at the dealership recently for service. The experience was simple and painless.
Later in the day, I got a call from the service representative to inform me that they had misquoted me on the service price; however, because it was their mistake would still be honoring the original quote.
While this isn’t your traditional “support” scenario, it is an excellent example of good customer service and a great experience for me.
Customer service isn’t just about providing support when problems occur; it includes any customer interactions and needs to be handled holistically.
So what were the outcomes of this experience?
- Dealer will be getting a lot of positive recommendations
- Will take my other car to them for services (revenue expansion for the dealer)
Example 3: Good
I work on our delivery service architecture (e.g., CDN, Edge, WAF, etc.), where we leverage Fastly heavily for these services (WASM FTW).
Given our modern service architecture, we rely heavily on WebSockets for bi-directional communication between the client and our services, as it is much more efficient than client-side polling. Initially, the Fastly Compute@Edge (C@E) service didn’t support WebSockets and we ran into some problems when we enabled our edge Rust code which handles all traffic. So we filed a request with Fastly and immediately got a response mentioning an upcoming beta.
As the beta became ready, they proactively contacted us to get us on the program and worked with us to ensure everything was operating as expected. During the cutover, they were on a call live with us to ensure everything worked as expected. We ran into a few hiccups, but they helped troubleshoot and solve with us live.
This is an excellent example of a partnership, not a traditional vendor/client relationship. They were honest about the lack of a feature (this builds credibility), but they were also proactive about communicating when it was available and partnered with us during the cutover. Even with some minor problems during the cutover, which they were on the call to assist with, the experience was excellent.
Customers don’t expect things to be perfect; they want honesty and partnership.
So what were the outcomes of this experience?
- Honest communication caused credibility and trust to form
- We have partnered with them on additional initiatives (e.g. WAF, WASM on Edge, etc.)
- I highly recommend them to others in the same field as myself
Why Poor Support Can Hurt Your Business
The good and bad examples above show different ways of handling customer experience, leading to opposite results: the bad experience leading to the migration off of the vendor, and the good experiences leading to business expansion with those vendors.
In this day and age, even more so for SaaS services, customers have a great deal of optionality. Moreover, given that all SaaS systems are intangible, migration between them becomes much more accessible, giving the upper hand to the consumer.
Customers expect good support, and when push comes to shove, if they don’t get it, this could be a driving factor to switch vendors. Now this vendor’s product was great when it worked, but I not only expect things to work, I expect someone to help me resolve things when problems occur (I understand that problems will happen, and that’s ok). This is how the vast majority of customers are.
As vendors, we must provide exceptional support and a great customer experience. Not only will this lead to potential business expansion and positive word of mouth, but it will also be a critical factor in ensuring customer loyalty and minimizing churn.
Lastly, remember that customer service isn’t just about support; it is about all interactions with the customer (sales, marketing, etc.)
To learn more about how and why you should look at support differently, check out the following post: Why you Should be Looking at Support Differently.
TL;DR
- Customers have optionality now more than ever (especially for SaaS)
- Providing latency-sensitive support channels (e.g. chat) are critical
- A poor support experience can be the cause of customer churn
- A great support experience can be the cause of revenue expansion
- Customer service is more than just support
- Treat your customers like a partner, and all parties benefit