Outsourced Support Shifts to Training, Maintenance
By Rawlson King, theWHIR.com
August 5, 2003 -- (WEB HOST INDUSTRY REVIEW) -- Technical support options have emerged that focus specifically on assisting hosting companies using popular automation packages. The new breed of outsourced customer care specializes in not only responding to technical support requests, but also in maintaining hosting infrastructure.
By leveraging such comprehensive support services, hosting operations can provide technical support and professionally maintain hosting environments without the headache and expense of developing, staffing and maintaining their own extensive, internal help desks. At fast growing Web hosting businesses, over 50 per cent of all incoming inquiries are support requests. These inquiries detract from the most essential areas of the business, which are sales and marketing. By outsourcing technical support and the maintenance of hosting infrastructure, a service provider can increase the amount of time that it dedicates to growing its business.
Web hosts also lower costs by outsourcing by effectively externalizing staff. Most average estimates peg support costs for shared hosting services at 30 per cent of revenue. Much of this revenue is consumed by paying expensive IT salaries. In the realm of shared hosting, which is a low-margin, commodity business, allocating such a substantial amount of financial resources can mean the difference between profitability and failure. Outsourcing allows smaller hosting operations to entirely eliminate the necessity of hiring a dedicated system administrator, giving them the opportunity to lower salary and training costs. Often, hosting companies can saving 50 per cent off the 30 per cent revenue allocation for support if they outsource, since they no longer have to focus on staffing, providing a basic salary or benefits. Support costs are also reduced since hosting companies no longer have to contend with the expensive in-flux of telephone calls.
"The only major differentiator in the Web hosting industry is how you treat you treat your customers," says David Bitterman, Vice President of Corporate Relations at CyLynx, a notable outsourced customer care provider that specializes in services for both ISPs and Web hosts. "Everybody has the same hosting packages that can be plugged into their servers, so the main objective is to improve service and increase revenue. Our service allows service providers to focus on marketing, which is what any Web host operation needs to focus on, while we focus on cost savings and decrease customer churn."
Indeed, the use of outsourced technical support allows hosts to control the amount of customer churn they experience. Consumers, especially individuals and small businesses expect timely and informative customer support. Noting that the majority of a host's clients come from this constituency, support must be a central tenant of a vendor's offerings. Unfortunately, because most SME hosting operations are small, often hosts cannot effectively deal with incoming support requests, especially if they are experiencing rapid growth. The result is usually an unsatisfied client base that does not obtain timely responses to their support inquiries. Customer churn occurs when customers cannot obtain a desired level of technical support. Most statistics have pegged average churn rates at 10 to 25 per cent. It is thus incumbent upon hosting operators to establish effective and efficient means of providing technical support to their clients in order to satisfy customer expectations. Service providers can obtain higher levels of technical support if they outsource their own support infrastructure. By outsourcing technical support functions, a host can actually reduce customer costs while improving customer satisfaction.
"It is usually more cost-effective to utilize a third-party to get true, qualified 24/7 support," says Carmen Koop, chief executive of HSphere Support, a support company that specializes in providing control panel support and infrastructure management. "It is usually not possible to hire a level 3 technician for under 10k a month. Some companies just cannot justify such a salary. Our services allow smaller companies to leverage such skill sets."
HSphere Support is different in respect to customer care since it not only provides customer support, but also actually maintains the entire hosting infrastructure for its clients. The company lso not only provides support for different control panels such as Ensim, Plesk and Hsphere, but also provides installation of the software, in-depth training for internal hosting company staff and also provides migration of plain vanilla servers to specialized hosting environments.
"We have not just positioned ourselves as a one-stop shop for UNIX administration and client support, but as a training company," Koop says.
Other features that both customer support firms offer customers include toll-free telephone support and 24-hour e-mail support inquiries. These methods of support inquiries are the most commonplace in the Web hosting industry. These technical support providers also provide highly personalized service, keeping detailed call histories on the nature and frequency of support inquiries.
Smaller hosting firms should explore these services in order to lower their costs and increase revenues, especially if providing shared hosting services.
