Some companies offer support as a “feature” that gets better the more customers pay. Here’s why that’s a mistake.
Note from Len: Kyle Racki is the CEO at Proposify, a SaaS company that makes proposal software for digital agencies and freelancers. I’m a big fan of Kyle’s blog, and I asked him if he would write a post for you on an important lesson he’s learned about customer support. I love how rich and in-depth the piece is, and if you’re wondering whether you should be charging for support or not, this post will help you make up your mind.
On the surface it makes sense. Offering support costs time, and time is money. If a customer wants premium service she should pay premium dollars. Right?
We recently had this discussion at Proposify when we considered adding a freemium plan. Some of our competitors offer only limited support on free/cheap plans and then scale up support as their customers pay more.
We went back and forth on it as a team — some arguing for and others against. In the end we decided not to move ahead with free plans altogether, rendering the argument somewhat pointless.
Still, it got me thinking; What is the right answer?
According to the research I’ve done on customer service, it’s in a startup’s best interest to offer the same level of service to everyone who uses their product regardless of whether they are on a free plan, a cheap plan or an expensive plan. Here’s why:
1) Free Support Strengthens Your Brand
It’s one thing to deny free users of support, but it’s outright elitist to deny paying customers the best support possible simply because they’re on a cheaper plan.
Example: Airlines that have economy-class and first-class seats approach service the same way — you pay more, you get more. Coach is lower in price but comes with cramped seats, limited food/drinks and overall less attention from flight attendants.
Do you really want to treat customer service the way an airline does?
Imagine you pay a company to use a product or service every month but when you email them for help they’re slow to respond or not very helpful. You eventually complain about the lack of service and you’re met with a response like:
Sorry but in order to receive priority support you need to upgrade to a higher paid plan.
How would you feel? Would it impel you to pay that company more money or look for an alternative solution instead?
Almost 9 out of 10 US consumers say they would pay more to ensure a superior customer experience.
Source: Customer Experience Impact Report by Harris Interactive/RightNow, 2010
Someone in favor of tiered support may use a stat like the one above to reinforce why they should charge customers for better support.
One thing to keep in mind is the psychology behind reciprocation. If people do something nice for you, you’re likely to do something nice back.
So if you treat every user or customer like they matter, then they’re likely to pay more for your service and promote it to others as a form of reciprocation.
But that’s not the same as offering premium support for customers on more expensive plans. If you dangle customer service over their head and tell them to “pay up” if they want it, it’s going to have the opposite effect and cause resentment.
In the end they may pay the same amount, but their perception of you as a company is vastly different. They’ll pay more because they have to rather than because they want to.
2) Free Support Helps You Catch Mission-Critical Bugs
In a startup where everyone does support, seeing a help ticket arrive in your inbox can feel like a distraction when you’re in the middle of something.
“Oh god, what now?” is a phrase that I’ve muttered to myself on one or two occasions.
The truth of the matter is that when you’re a small team with a growing user base, your software is going to have bugs.
- Some will be edge cases only a small percentage of your users will ever experience.
- Others will be major bugs that could cripple your business.
- Most will be somewhere in between.
What’s more, not all your users will report bugs. Some will ignore the issue or come up with a workaround.
Others will get frustrated and over time their usage will go down until they eventually cancel.
The point is this: when someone reaches out to support to report a bug they are doing you a favor!
Sure, it may be an edge case or a user error, but in the event it’s a bonafide bug, wouldn’t you want to know about it regardless of how much a user was paying you?
Forcing a user to pay to report a bug is like kicking someone in the shin for handing you a free coffee.
3) Free Support Let’s You Gather Qualitative
Data About Your Market
Any user who reaches out to you with questions or issues offers you one of the best opportunities to learn about your target customer and how best to serve him/her.
Getting feedback out of people can be tough, so if someone reaches out to you — and you ignore them — you are looking the proverbial gift-horse in the mouth.
Start a conversation and you’ll soon find out:
- How they found out about your company
- What problem they were trying to solve
- Their first impressions of using your software
- What their “aha” moment was for them
- Why they keep coming back to your software
- What parts were difficult or confusing to use
All of this is going to help you build a better product.
Of course you should be learning from your best customers — you want more of them and fewer of the less valuable customers.
By helping the little guys with support, you can also learn who not to focus your marketing on, and what you can change in your product to make it appeal less to those customers and more to the high value ones.
Example: Early on at Proposify, we assumed freelancers were our target audience. We even spent $10,000 writing and designing an in-depth guide to going freelance.
But after people started using our software, we spent time talking to each of them and learned something: Small agencies are much more valuable customers than freelancers! They are willing to pay more money, require less support and they are less likely to churn.
Now our marketing message is focused on small agencies instead of freelancers. We never would have learned that if we offered support to only higher paid customers.
4) Free Support Differentiates You
From Larger Competitors
Most of us have had this experience, where we are trying to find an answer to a question or have a problem using a service and the company makes it virtually impossible to contact a real person.
This was me trying to call FedEx last week.
A small company is in the unique position of being able to offer customers a more personal experience.
In fact, a 2011 American Express survey found that more than 4 in 5 Americans (81%) believe that smaller companies place a greater emphasis on customer service than large businesses.
This is where startups have a competitive advantage over big companies — you’re probably not going to be able to ring up Dan Schulman of Paypal, but you can usually talk to a startup CEO pretty easily.
By offering great service to everyone — even users on free plans or lower-tiers, you’re giving them a reason to be loyal to your brand and grow with you over time.
Cutting them out of support creates a negative experience for them and doesn’t offer them a reason to stick with you instead of a competitor.
5) Free Support Turns Users Into Customers and
Customers Into Advocates
In a startup, customer service is more than just a nice thing you do to help out your customers — customer service is your primary sales channel.
You probably drive people into your sales funnel through content, SEO or advertising, but getting them to convert to a customer is often accomplished with great service.
In fact, more often than not, someone becomes a customer, stays on as one and promotes you to others solely because you offered great support, even if there were hiccups with the product. Without support they would have churned.
Who is to say that someone on a free plan will never become a paying customer, or that someone on a cheap plan will never upgrade to a higher paid plan?
But that’s exactly what you’re saying if you deny those users great support. You’re needlessly turning a potential customer away and ensuring they never become one.
If Offering Great Service Was Easy Then Everyone Would Do It
Naturally, offering great support to everyone who uses your product is challenging and expensive. But isn’t it more expensive in the long run not to give the best service you can give?
Do you agree with me? Disagree? I’d love to hear what you think in the comments below!