Quantifying the value of customer support
Hello, We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab. Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation. Thanks Kim
On Thu, Feb 14, 2013 at 3:52 PM, Kasper Adel <karim.adel@gmail.com> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Thanks Kim
Kasper/Karim/Kim Your job is customer retention. Your value is maintaining all company income. Write the yearly revenue on a piece of paper and hand it to them. -- ~ Andrew "lathama" Latham lathama@gmail.com http://lathama.net ~
I used to think that these kind of situations take place when a manager was never an engineer so he does not understand how things work but i was surprised when i faced these from managers with an intense engineering career so i gave up on trying to give conceptual excuses and want to just give them the dump tables and numbers that they are looking for. Kim On Thursday, February 14, 2013, Andrew Latham wrote:
On Thu, Feb 14, 2013 at 3:52 PM, Kasper Adel <karim.adel@gmail.com<javascript:;>> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Thanks Kim
Kasper/Karim/Kim
Your job is customer retention. Your value is maintaining all company income. Write the yearly revenue on a piece of paper and hand it to them.
-- ~ Andrew "lathama" Latham lathama@gmail.com <javascript:;> http://lathama.net ~
There is no such thing as a generic business case that can be applied across all companies in an industry. Every business is unique in its product definition and organization structure, but each question is also unique and therefore the analysis must be done every time. The way to begin is to ask this manager what he believes the possible outcomes are (downsize your group, eliminate your group, re-define your group, etc.) and then work with each of the key stakeholders that you have to estimate the impact of those outcomes. For example, if 1st line operations indicates that eliminating your group would result in decreased customer satisfaction and missed SLA's, ask them to quantify it as much as possible and go to take the numbers back to your business people to have them estimate the impact on revenue. The analysis should be constructed and presented in standard finance terms (like NPV) so I would suggest that you make friends with someone in finance to assist you with the preparation. You can also take a short two-day course like this http://executive.mit.edu/openenrollment/program/fundamentals_of_finance_for_... that will teach you how to build up these analysis yourself (I have taken the one referenced and I recommend it to all managers with budget responsibility). The outcome from these discussions often has surprising but positive outcomes for everyone...maintaining the status quo is not always the best possible outcome despite the biases we usually have when we begin the analysis. :-) If you work closely with all of your stakeholders, everyone will learn and benefit from the experience. Dave -----Original Message----- From: Kasper Adel [mailto:karim.adel@gmail.com] Sent: Thursday, February 14, 2013 2:16 PM To: Andrew Latham Cc: NANOG list Subject: Re: Quantifying the value of customer support I used to think that these kind of situations take place when a manager was never an engineer so he does not understand how things work but i was surprised when i faced these from managers with an intense engineering career so i gave up on trying to give conceptual excuses and want to just give them the dump tables and numbers that they are looking for. Kim On Thursday, February 14, 2013, Andrew Latham wrote:
On Thu, Feb 14, 2013 at 3:52 PM, Kasper Adel <karim.adel@gmail.com<javascript:;>> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Thanks Kim
Kasper/Karim/Kim
Your job is customer retention. Your value is maintaining all company income. Write the yearly revenue on a piece of paper and hand it to them.
-- ~ Andrew "lathama" Latham lathama@gmail.com <javascript:;> http://lathama.net ~
Thanks everyone for the feedback. Can someone give an example on how i can calculate $ value from improving a product/service usability and servicability? I am trying to categorize what we offer : 1) Improve customer experience 2) Reduce service deployment time 3) Improve service availability Regards Kim On Friday, February 15, 2013, Siegel, David wrote:
There is no such thing as a generic business case that can be applied across all companies in an industry. Every business is unique in its product definition and organization structure, but each question is also unique and therefore the analysis must be done every time.
The way to begin is to ask this manager what he believes the possible outcomes are (downsize your group, eliminate your group, re-define your group, etc.) and then work with each of the key stakeholders that you have to estimate the impact of those outcomes. For example, if 1st line operations indicates that eliminating your group would result in decreased customer satisfaction and missed SLA's, ask them to quantify it as much as possible and go to take the numbers back to your business people to have them estimate the impact on revenue.
The analysis should be constructed and presented in standard finance terms (like NPV) so I would suggest that you make friends with someone in finance to assist you with the preparation. You can also take a short two-day course like this http://executive.mit.edu/openenrollment/program/fundamentals_of_finance_for_... will teach you how to build up these analysis yourself (I have taken the one referenced and I recommend it to all managers with budget responsibility).
The outcome from these discussions often has surprising but positive outcomes for everyone...maintaining the status quo is not always the best possible outcome despite the biases we usually have when we begin the analysis. :-) If you work closely with all of your stakeholders, everyone will learn and benefit from the experience.
Dave
-----Original Message----- From: Kasper Adel [mailto:karim.adel@gmail.com <javascript:;>] Sent: Thursday, February 14, 2013 2:16 PM To: Andrew Latham Cc: NANOG list Subject: Re: Quantifying the value of customer support
I used to think that these kind of situations take place when a manager was never an engineer so he does not understand how things work but i was surprised when i faced these from managers with an intense engineering career so i gave up on trying to give conceptual excuses and want to just give them the dump tables and numbers that they are looking for.
Kim
On Thursday, February 14, 2013, Andrew Latham wrote:
On Thu, Feb 14, 2013 at 3:52 PM, Kasper Adel <karim.adel@gmail.com <javascript:;><javascript:;>> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Thanks Kim
Kasper/Karim/Kim
Your job is customer retention. Your value is maintaining all company income. Write the yearly revenue on a piece of paper and hand it to them.
-- ~ Andrew "lathama" Latham lathama@gmail.com <javascript:;><javascript:;> http://lathama.net ~
You need to talk to your marketing/sales department and have them figure out how many existing clients you would retain by maintaining the current level of service, how many clients you would lose with lower quality of service, and how many clients you would attract with better service. From that, you can figure out a rough ROI for your department. This isn't a fundamentally technical question, it's a marketing & sales one. You can have the best service ever, but if your company is unable to attract or retain clients (whether due to your company's PR reputation, market saturation, or whatever), it doesn't matter. - Pete On 02/15/2013 05:15 PM, Kasper Adel wrote:
Thanks everyone for the feedback.
Can someone give an example on how i can calculate $ value from improving a product/service usability and servicability? I am trying to categorize what we offer :
1) Improve customer experience 2) Reduce service deployment time 3) Improve service availability
Regards Kim
On Friday, February 15, 2013, Siegel, David wrote:
There is no such thing as a generic business case that can be applied across all companies in an industry. Every business is unique in its product definition and organization structure, but each question is also unique and therefore the analysis must be done every time.
The way to begin is to ask this manager what he believes the possible outcomes are (downsize your group, eliminate your group, re-define your group, etc.) and then work with each of the key stakeholders that you have to estimate the impact of those outcomes. For example, if 1st line operations indicates that eliminating your group would result in decreased customer satisfaction and missed SLA's, ask them to quantify it as much as possible and go to take the numbers back to your business people to have them estimate the impact on revenue.
The analysis should be constructed and presented in standard finance terms (like NPV) so I would suggest that you make friends with someone in finance to assist you with the preparation. You can also take a short two-day course like this http://executive.mit.edu/openenrollment/program/fundamentals_of_finance_for_... will teach you how to build up these analysis yourself (I have taken the one referenced and I recommend it to all managers with budget responsibility).
The outcome from these discussions often has surprising but positive outcomes for everyone...maintaining the status quo is not always the best possible outcome despite the biases we usually have when we begin the analysis. :-) If you work closely with all of your stakeholders, everyone will learn and benefit from the experience.
Dave
-----Original Message----- From: Kasper Adel [mailto:karim.adel@gmail.com <javascript:;>] Sent: Thursday, February 14, 2013 2:16 PM To: Andrew Latham Cc: NANOG list Subject: Re: Quantifying the value of customer support
I used to think that these kind of situations take place when a manager was never an engineer so he does not understand how things work but i was surprised when i faced these from managers with an intense engineering career so i gave up on trying to give conceptual excuses and want to just give them the dump tables and numbers that they are looking for.
Kim
On Thursday, February 14, 2013, Andrew Latham wrote:
On Thu, Feb 14, 2013 at 3:52 PM, Kasper Adel <karim.adel@gmail.com <javascript:;><javascript:;>> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Thanks Kim Kasper/Karim/Kim
Your job is customer retention. Your value is maintaining all company income. Write the yearly revenue on a piece of paper and hand it to them.
-- ~ Andrew "lathama" Latham lathama@gmail.com <javascript:;><javascript:;> http://lathama.net ~
Hey, So usually this is done by the business unit leaders. At AT&T people used to call it "pushing the wastebasket". The idea is that each department runs as a separate business and in order to evaluate the business you debit and credit departments as if they were counterparties in a trade. Someone usually ends up on the outside looking in. Typically, for call centers, this evaluation is done on a cases handled versus calls placed manner with time/$ values associated with every ticket. Tier 2 support costs more per person than tier 1. If tier 2 doesn't actually speed or reduce call traffic, there's no point in having a tier 2. Now, as one might imagine, there is a great deal of subjectivity in these numbers. Many teams try to tackle this by dividing salaries by hours on the phone. This can hide a lot of the value of tier 2 as the whole point is to eliminate extra time someone would've spent in tier 1 looking for the answer. Your challenge is to quantify how much time you're saving and multiply it by your salary per hour number. That's a good place to start. Cheers, Joshua Sent from my iPhone On Feb 14, 2013, at 12:59 PM, "Kasper Adel" <karim.adel@gmail.com> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Thanks Kim
I would think your $ value would be calculated by a few factors. 1. How much would it cost to train and hire NOC guys that do what you do today vs. using outsourced support for those issues or going to a higher level team. 2. How much longer would SLA affecting problems take to solve without you? 3. This one is tough, how many customer implementations would fail and how many customers would you lose due to the loss of technical expertise? A super simple calculation would be something like "we provided 10,000 hours of support and a consultant with similar skills would have cost X dollars" or if they would have escalated to an even higher level in your organization you have to calculate the cost of your hours vs the hours of more expensive engineers. A calculation you will probably not be able to make is if a higher engineering level than you had the time and resources to handle the same cases or if they would need more body count to do so. I can't tell what your $ value is without knowing the cost of not having you. I would think the best thing to respond with would be to take some of the cases you handled and find out what it would have taken to solve the problem if you had not been there. For example, I you provided three hours of help that no one else in your organization could have, you could calculate how much an outside consultant would have cost and how long it would have taken to retain that consultant. You will then be able to say that X project would have cost this much and taken this much longer. Bottom line is what is the cost of NOT having you. Steven Naslund -----Original Message----- From: Kasper Adel [mailto:karim.adel@gmail.com] Sent: Thursday, February 14, 2013 2:52 PM To: NANOG list Subject: Quantifying the value of customer support Hello, We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab. Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation. Thanks Kim
On Feb 14, 2013, at 4:00 PM, Kasper Adel <karim.adel@gmail.com> wrote:
Hello,
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face. But we are merely bits and bytes engineers that cant quantify and justify the value of what we do to the management team. I guess these smart suits want to see an excel sheet with a table of how much they save or gain by the support we do. We respond to technical questions and simulate problems in a lab.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Sounds like a job for the Bob's.
Thanks Kim
On Feb 14, 2013 12:58 PM, "Kasper Adel" <karim.adel@gmail.com> wrote:
We are a 2nd level of escalation in a service provider, trying to put a $ value on the support we give to our NOC and other implementation teams, when they email us about problems they face.
Hi Kasper, Support is about customer retention. You solved a customer's problem. As a result, the company continues to recognize revenue from that customer for another year. When you fail, the company loses that revenue stream. Tier 2 support is about solving the difficult customer problems. Often these are Power User problems -- they would have solved a tier 1 problem for themselves. Power Users are interesting because each "recommends" services to something like another dozen customers. They're the "computer guy" the luddites know. When a power user departs upset, other customers will leave over the course of the next 12 months because he recommended something else to them. They won't complain. They won't offer the company an opportunity to retain them. They just leave. So, success on a tier 2 call means retaining not one, but as many as a dozen customers. And that is the value of tier 2 support. You're tier 1 with a multiplier effect on customer retention which is much higher than the difference in your salary.
Can anyone help me with an idea or any material i can reuse? Templates? Has any one been in a similar situation.
Sorry, can't help you there. You'll have to do your own research to put supportable numbers to the claims. Regards, Bill Herrin
participants (8)
-
Andrew Latham -
Joshua Goldbard -
Kasper Adel -
Naslund, Steve -
Peter Kristolaitis -
Rodrick Brown -
Siegel, David -
William Herrin