The perils of making customers pay for support

There’s a lot of talk doing the rounds lately on whether you should charge customers for support, and how much. It’s not surprising either – after all, great customer service does not come free.

If you are a Managed Service Provider, or your core business is providing some kind of service for your clients, this story is not for you. But if “customer support” by itself is more of a value add on top of the stuff you actually sell, I’m sure you’ve asked yourself this question at least once: should you be making your customers pay for it? After all, the human resources, infrastructure and training, the things that go with great customer service, don’t come free.

If you have a freemium model (like a lot of SaaS companies, including us), it gets even trickier. Free users aren’t free at all. In fact, they usually cost about the same to acquire, and sometimes way more to serve. They ask a lot of basic questions. On average, they need more hand holding. As a result, the cost of servicing them is disproportionately higher than that of even paying customers.

So why do we, at Freshdesk, offer Free Priority Support to every one of our customers? Why do we not force users to get their wallets out before we put on our rubber gloves and start supporting them? Why do we even publish our support phone numbers right on top of our website?

Here are a few reasons why we believe exceptional service is a right to every customer Twitter Icon. And why businesses that look at Customer Service as a cost, or ‘just another service revenue stream’ is killing itself AND its customers Twitter Icon.

1. You’re making customers pay you to help grow your business? Seriously?

Every customer has an opinion, suggestion or idea. And a free customer’s idea has just as much chance of sparking your business to glory, as a paying customer’s. In fact, some of the ideas we’ve got from our free customers have helped shape our roadmaps and capture interesting use cases we hadn’t thought of before.

2. What comes in as a ticket only makes you stronger.

Every support query ends up making your product just a little bit better – in terms of usability, features, behaviour, and bug fixes. Which means there’s all the more reason to open the support doors to everyone. Of course, that means a flurry of tickets flooding your support desk, but that’s a growth problem that every business should actually be looking forward to. I’d rather have more customers wanting to talk to me than fewer, any day Twitter Icon.

3. “You are not a beautiful and unique snowflake….” Twitter Icon

Most businesses end up making the cardinal mistake of assuming they are indispensable. Unfortunately, even if you have the most earth-shattering, life-changing, paradigm-shifting product out there, your customers were probably doing just fine without it most their lives. And if history has shown us anything, people don’t do business with jerks for very long Twitter Icon. The one unique and indispensable value that you could offer to customers though, is by showing them that you care.

4. Relationships work out of love, not switching costs.

Customer service can be a huge hidden channel to engage and build a relationship with users. Of course, you could invest on other switching costs and create barriers that hold your users from bailing on you. But once you lose out on the love customers have for you, it’s only a matter of time before they move out (and the next thing you know, they’ll be asking for your house, car, custody of kids and alimony).  The more your customers get to “know” your product, the more involved they are. And that is a bigger switching cost than contacts, data and carriers.

5. Cutting off support channels is self-amputation Twitter Icon.

The biggest business challenge you need to cross is getting users invested in your product. Charging customers just to help them get started with your product is plain stupid. And it is stupider to charge them just to even listen to the problems your product is giving them Twitter Icon. Your customer service is a critical communication channel between you and your customers. And unless you are connected to them, you can’t build products that make their life better in any way.

6. So, I should pay just to get you to talk to me? That just sounds wrong.

The ugly truth for most businesses is that the majority of your users on the lower plans may never upgrade. But the uglier truth is, it is probably your fault. If your free guys don’t “get” you, they don’t upgrade. If they don’t love you, they won’t upgrade Twitter Icon. When you charge customers before they can reach out to you, you are putting up roadblocks to learn, use and understand your product. And that isn’t going to earn you any brownie points.

7. The unbearable lightness of being….nice.

There is no shortcut to being nice. Every one of us wants to do business with companies that we love – that we believe genuinely care for us. Offering exceptional service to customers is a great way to show them you care about making them successful. And when your customers succeed, you do too.

Try to keep in mind that when the day ends, your customers are not figments from a digital universe, but from your own. They come with the same frustrations that you do. Be nice and be sincerely nice Twitter Icon. It doesn’t make sense to first force customers to pay before you sit them down on a comfortable chair and give them some special white glove treatment. Remember, if you are making them pay to listen to their problems, it is called therapy, not support Twitter Icon.

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  • Diego Zanella

    Generally, I would agree with what you wrote, as long as the support team is considered a valuable resource from all perspectives. Some companies embrace the idea of not charging for support, but then they hammer their support department because they consider them a cost, like a “parasite” that erodes their profit. The more the support department works, the more it costs, until they magically become “the problem”. It’s a twisted way of thinking: I chose not to charge for your work, thus your work cannot bring me any revenue, therefore you are a burden.

    The moment a company decides to provide free support, the mindset must be that EVERYTHING related to support is an asset, and the team who provides a great service should be rewarded (probably, even more than some people in the marketing and sales division, who often feel too proud and consider themselves the only “earners”).

    • harishchouhan

      Totally Agree with that. Being a small company we struggle between spending time doing paid work vs. providing support.

  • Tim Edlund

    Great article! … and all this time I thought I was a beautiful and unique snowflake… darn.

  • http://341design.com.au Chris Howard

    Not sure you guys are in a position to argue this since you DO charge for support and by your very business, advocate that.

    Sure you don’t charge on a ticket-by-ticket basis, or similar, but your pricing plans are a subscription model so they easily account for the cost of support.

    That is, I don’t imagine your business plan excludes the cost of support when setting your pricing. Even in your free pricing, the costed plans will have been set to cover the losses on the free pricing.

    Further, you charge me for this ticketing system that I then provide to my clients, but are saying I should not charging them?

    It doesn’t matter how we massage it, if you’re running a business that provides support, you must factor in the cost of that support somewhere in your charges.

    It might look nice to say “we don’t charge for support!” but if you aren’t, you won’t stay in business long.

    What you really are saying, when considering your own practices and pricing, the viability of any business, and this article: “Don’t make it obvious to your customers they are paying for support”.

    • Girish Mathrubootham

      Hi Chris – I would like to humbly disagree. If Zappos or Amazon charged you for customer support – what would be your reaction? Since they don’t charge would you argue those costs have been factored in to the cost of the shoe or book that you ordered? Have they not shown the world that you can build a business that stays for long by focusing on an awesome customer experience!

      We CAN charge customers for support (or force them to be on a higher plan if they want phone support) and get away with it. We CAN deny support to our free users.

      But we choose NOT TO.

      • http://341design.com.au Chris Howard

        Exactly. The cost of support is factored into their price.

        You’re still paying Zappos and Amazon for support.

    • harishchouhan

      “Further, you charge me for this ticketing system that I then provide to my clients, but are saying I should not charging them?”

      Hard to understand your logic Chris. I am a free customer of FreshDesk. Freshdesk is not charging for support, they are charging for using their Software as a Service. 2 very different things.

      • http://341design.com.au Chris Howard

        That is interesting because how do Freshdesk stay viable with totally free customers?

        Easy, paying customers cover what it costs to have free customers.

    • http://341design.com.au Chris Howard

      My point is there’s a big movement to subscription model of charging and it’s often stated in plans that support is included.

      Is the writer of this article saying we shouldn’t be saying that, we should be pretending that support is free?

      I don’t know any web designers who provide free support for websites they’ve built.

      Charging for support is not a bad thing.

      Charging per ticket, or time if call based, is old school and yeah, customers don’t like that.

      So you do have to be smart about it, and you’ll have more luck with the customer being okay with it if it’s already factored into your pricing.

      I’d hate for someone to read this article and get the idea they shouldn’t be charging for support, and therefore not consider its cost to their operation.

      You *must* factor in the cost of support somewhere in your pricing.

      • qvikr

        What’s free? After all everything has a cost involved. Only, when a cost has a high enough tangible ROI, it makes more sense to call it an Investment. In our case, when we support customers for free, we aren’t incurring a “loss” – we are “investing” on this customer. And that pays off…

        Our customer service is a more powerful medium for us to acquire, onboard and retain customers. So the better we support, the more involved our customers get with Freshdesk, and the more they pay – BECAUSE THEY CAN BETTER USE THE PRODUCT, not for the support they received to get there. At the end of the day – if you do it right, your paying customers won’t be subsidizing your free users. The dollars you invest in supporting them today (i) helps them grow to become paying customers sooner, and (ii) generates goodwill – and that is something money can’t buy :D

        • http://341design.com.au Chris Howard

          Trust me, I know from painful experience as one who tried for three years to provide support for free (sell once, lifetime free support), goodwill is quickly lost when you don’t have time to provide good support and don’t have a pricing plan that allows you to expand your support.

          And when you lose goodwill, you lose customers and income.

          If I had the income, the money, I could pay support staff, and therefore “buy” goodwill. So money can buy goodwill.

          Not incorporating the cost of support has ended up costing me both customers and money.

        • Ramdak

          Just came across this article and would like to chip in although it’s many months now.

          The point that this article and its supporters are missing completely is a simple one – so called ‘free support’ has a cost. I dare say that Freshdesk is only able to support its ‘Free’ plan customer because it’s well funded with investor money. Would you support as many if you didn’t have all that money paying for the set of support staff who support your free plan customers? Sure, you are ‘investing’ in these customers but with the time of your support staff that’s paid for by your investors’ money.

          Smaller businesses without the luxury of deep pockets or investor funding need to factor support costs into the price of their products or services to survive and grow. They cannot pretend to provide ‘free’ support. That’s the point that Chris is making.

  • saravanamv

    I probably will disagree with lot of points. Getting a support ticket, someone pointing a problem in your product or trying to improve the user experience is great. This will no doubt make your product stronger and better. But how do you deal with people who don’t know how to click a button!! How do you deal with people like ” Customer:I have broken the cup holder in the PC….Support Person: Sir! we didn’t have a cup holder, that was a DVD tray”

    In my opinion, asking customer to pay for support is like insurance company (you hedge your cost across the board). 80-20 rule applies, only 20% of the customer will account for 80% of the issues. But still that loyal 80% needs to pay to compensate the loses created by 20%.

    • qvikr

      Awesome point. This goes back to the old days of the ID10T error (IDIOT error, or user error). When the guys over at Redmond were busy building tools for the 80% and then blaming them for their tech-ignorance, this other company further south listened to the more engaged (and complaining) 20%. Interesting how you hear the “broken cup holder” story from a PC point of view and never a Mac…
      IMHO if 80% of your customers think your DVD tray is a cup holder, (a) your Support hasn’t invested enough on evangelizing the DVD tray, (b) your Marketing isn’t really targeting the right users for your culture, and (c) your Product Management seriously needs to put a cup holder on the Cabinet…

      • saravanamv

        DVD Problem may not be applicable for Mac, but I’m sure they must have tons of other similar ID10T issues. The point is, there will always be small percentage of people who do not want to read a manual or they think they are cleverer than rest of the world and come with such support questions. IMHO someone is going to pay for it, only thing it’s hidden somewhere nicely. I strongly believe “there is no such thing called – free lunch’

  • Andrew Jones

    Interesting points, we do not charge for support as we are a saas. So the licence covers support / hosting etc, so in some ways we are charging for this as pointed out below. But the important point here is that it is unlimited and we work with our customers to keep improving. One point I would like to raise is should we look at a free version of our software?

  • Carolin Geissler

    In light of the point Chris Howard is trying to make (or from what I understand he’s saying), the article would probably better titled “The Perils of Making Customers Pay Extra for Support”.

    Because Chris is right in saying that CS will incur costs for your company and these costs are of course factored into the price you’ll end up selling your product for. If it’s not, you’re calculating your prices wrong.

    But, what Vikram is saying in this article is that companies shouldn’t charge ‘extra’ for support. When someone buys your product for whatever price you name (even if that price is zero), there should be support included.

    Even if your product price will end up higher than if you didn’t include support, your customers will be happier. Because whenever they have an issue or need assistance, they aren’t met with, ‘We’ll take a look at it, in the meantime, please wire $250 into our account for support services.’

    Or, in other words: When your customers actually need your help, they’re not going to be understanding about that fee because their biggest issue is whatever problem they want fixed.