Post-sales support functions are typically cost centers: large, labor-intensive operations with significant overheads and no financially attributable benefit to the bottom line. This environment is changing, with  organizations gradually understanding the revenue generation opportunities in support services such as technical support and afterlife maintenance. I recently had a conversation with CSS Corp about one such example.

Growth through improving performance

CSS Corp began supporting this North American networking OEM in 2003. The client manufactures and sells a range of networking equipment, from hubs and routers to servers and security devices, for the home and small business. At the start, CSS Corp was one of multiple suppliers managing ~30% of the call volumes through centers in India, and eventually Utah and Manila. On the back of CSS Corp’s performance, together with the customer, they have launched a premium tech support offering, a white labelled support service line, and expanded from voice to email, chat, and (over the last two years) remote diagnostics. Today, CSS Corp handles ~55% of the call volumes for the client with approximately 300 employees.

From FTE-based to revenue-based model

The initial pricing model was straightforward FTE-based, dependent on volume forecasts. As CSS Corp analyzed the operation, it identified optimization opportunities primarily with the support process. The client had tried in the past by changing the lifetime warranty policy for its routers to 90 days and pushing sales for warranty extensions, but with limited results. CSS Corp’s proposal focused on the entire experience for the connected home, where the router is just one piece. It offered to sell a premium tech support package covering the out-of-scope and out-of-warranty routers, as well as every connected device in the house. If the issue cannot be resolved or it is due to a faulty product, the customer is entitled to a complete refund.

In turn, the commercial outsourcing model is also modified to transaction-based. The client pays only for the handled interactions at a lower rate compared to FTE pricing, and on top, CSS Corp pays a certain percentage of the generated revenue from the premium tech support sales.

Impact on the provider

For CSS Corp, this shift required changing the operations, with a robust analytics capability to monitor and forecast performance, and a new profile for the support staff. From narrowly-focused technical support agents proficient solely in routers, CSS Corp recruited engineers with competency both in hardware and software to answer the new types of issues escalated by customers. These engineers are supported by a knowledge base and troubleshooting guides, covering the wide spectrum of the constantly expanding connected ecosystem. The company also established a dedicated IoT showroom to test and play with new devices and software. In addition, the team had to have sales skills to identify prospects, overcome objections, and close subscription sales.

The right client

Moving to such a model, incorporating variable costing with revenue generation sharing, requires a certain type of client. Ideally, one with experience in outsourcing partnerships, a level of maturity within the customer experience operations, the necessary volumes, and a higher value product. It fits well with networking OEMs where, for example, if the end user contacts the company several times with support inquiries for their router, the standard profit after tax of 4%-5% will be lost. This approach also requires the product and marketing departments to be more flexible and find creative ways to amend their entitlement and warranty policies.

Addition to the bottom line, and next generation technical support

Between July 2014 and December 2016, the client experienced 275% reduction of its support costs with a comparable volume, and currently receives $0.58 revenue per call handled by CSS Corp while maintaining CSAT of over 92% and NPS above 75%. Through improved training and proactive engagement with the customer during the subscription period, CSS Corp increased the conversion rate from 4.5% to 9.5%, and grew the average sales value by ~37%.

In the last two years, the support team is receiving more targeted and complex customer calls related to smart homes and, more recently, voice-controlled connected devices. CSS Corp is addressing this evolution of the market and customer expectations by continuous training, but also by driving active delivery frameworks. It analyses logs for the interoperability of devices, creates self-service troubleshooting guides for the users, and enables omnichannel support through the company’s proprietary Activai mobile app. CSS also recently started a pilot over social media.