Should you take this call?

If you sell a low-priced product, one phone call may turn a sale from a profitable one to unprofitable, when factoring in the cost of your time.

Our very first paying customer paid us a grand total of $19. Our product was so stitched-together at the time that our free trial wasn’t enough to convince her to purchase the product outright (for $49, circa February 2009) – she preferred to “rent it” month-to-month. Needing a paying customer dearly to prove our business model, we agreed.

That was before the 20 internal man hours we spent over the next 2 weeks supporting our courageous first customer. Most of it was our fault, not hers. The product was buggy. She had a funky network setup that we’ve never seen before. JP, Chihab and I worked odd-hours for less than $1/hour supporting the $19 sale.

This is the crux of the oft-dreaded “support overhead” school of thought — that support is a variable cost that needs to be minimized, nothing more. If you don’t charge for support, that is supposed to be a recipe for disaster.

Why we didn’t shun our phones

When we released version 2.0 of our time tracking software last August, we decided to include free support with purchase of the product. Some of our friends initially advised against it: “That’s crazy. You’d go belly-up on support! You’re just three people, how do you expect to get anything done with support calls coming in at all hours of the day?”.

Oh well, we figured — that’s a bridge we’d be willing to cross if we got to that point. We believed a great customer experience was the most important thing. The rest of the puzzle, like handling growing support volume, we’d figure out as we went.

Once you’ve made the decision to provide good, free, customer support, what’s the best way to do it? Should it all be streamlined over email – or does the phone still have a place today?

We opted to make phone a viable option for folks who preferred it, knowing that we could take a step back from this stance if we needed to. Thus far, we don’t regret the decision at all. In fact, we’ve found “picking up the phone” to be the best channel of customer feedback, and the single most effective way to win over a customer’s heart.

Managing Incoming Calls

Below, I’ve outlined how our company handles incoming calls. These practices have been working well for us so far. If you have other tips that worked well for your company, please share it with all of us in the comment thread!

When in doubt, pick it up

First, I will take any phone call that looks like they might be coming from prospects and customers. To filter out the obvious sales calls from vendors, I tend to ignore incoming calls from people masked as 1-800 numbers on my caller ID.

You can’t beat a live conversation for connecting with someone, developing a relationship, and gathering important market and customer intelligence.

The earlier you are in your company’s life cycle, the more I think you should seriously considering answering your phone. In a product company’s early stages, achieving product-market fit should be the number one priority. Until you reach that milestone, you don’t really have anything worth scaling up!

So “going broke on support” is not a bad problem. More often than not, it means you made enough progress to actually run into it. This is why we didn’t worry about it. The symptom also signals that your customers care enough about your product (and their problem) to actually talk to you. How many times have you called a company that you don’t care about?

As a startup, you have enough immediate problems to worry about, so it’s often best to ignore issues that “might” come into play “someday” — just in case they never do.

While answering the phone is technically not the most “efficient” use of my time, I do answer our company line during regular business hours. If you’re still finding your product, market, and customer fit, I’d strongly urge you consider doing the same.

How Many Phone Calls Can You Expect?

If you’ve been to our website, you’ll notice that we show our toll free (1-888) number very prominently in the upper-right corner of each page. So is this a recipe for disaster?

What surprised us all was that the volume of incoming phone calls dropped when we displayed our toll-free number prominently at the top of every page on our website. The number of real support calls didn’t show any noticeable decline, but we did notice a drop in general information calls. These were historically from customers who would verify that our product did what they thought it did prior to making a purchase.

Building confidence in your product

You’re considering buying a new, yet-to-be-proven product. What would help you make your decision? Validation. What if this product is so new, the customer can’t find reviews and other forms of validation? That’s where a phone number becomes very powerful. Now, you can have a conversation with the vendor and get answers to your most pressing questions from a real person.

As a small business, just showing that you’re not hiding behind the veil of your computer is often enough to comfort prospective customers. Your customers are used to finding their own information online, and generally don’t need to talk to a live person to make a purchase decision. But that’s totally different from saying that your customers don’t want to talk to a live person if they had a question or problem.

There were a couple of other things that further reduced incoming calls:
1) Product improvements and bug fixes meant fewer people would have problems to begin with. This reduced our call/email volume by probably 50%
2) Redesigning our website (clearer copy, video demos, easier navigation) filtered out calls and emails asking fairly basic product questions. Reduced call/email volume by 20%
3) Better support documentation (a Quick Start Guide, GetSatisfaction, and common support Q&A’s) further reduced call/email volume by 25%.

These days, we get one our two support call per day, on average, even though our user base and feature set continues to grow.

Dealing with Telemarketers

Again, if you’re a start-up, that’s pretty easy. I politely explain that we’re a tiny software company, and we’re probably not the best prospect on their calling list. That usually does the trick, and keeps things on the up and up as we each part ways to continue about our respective days.

Setting Up Your Phone System

We use Grasshopper for our 1-888 number. I’m not affiliated with them, but it’s been a very good product for our requirements. We’ve set up 2 extensions when you call the main line: #1 for Sales, #2 for Support. You can route each one to a different person – right now both are going to me (so you know where to find me if you want to chat).

You can route you calls to any phone number – so a mobile phone, landline, or VOIP line. This is pretty cool stuff, you really can take phone calls anywhere!

Google Voice (invite only) also has good call forwarding options of course. Skype has a cool plan where you can dial out anywhere, unlimited minutes, for just $2.95/month – I actually use that too. We didn’t have a landline in our office for awhile, so I used Skype for outbound calls to save on my mobile minutes.

Bottom Line: We Like the Phone

We remain fans of the phone to talk with people. In the early days of our company, we would gladly talk with anyone who wanted to talk to us. That feeling still holds today, even though we’ve certainly progressed quite a bit from those earlier stages.

So maybe we remember our roots – maybe it really is a beneficial business practice – maybe a little bit of everything. So far so good for us on the great “phone answering” experiment – we’d recommend you give it a shot.

Further reading: Here’s a great piece about the importance of answering customer calls and e-mails from the folks at Jackson Fish Market.