Advertising
Product and Marketing Support
Two of the areas that solo business owners sometimes don’t consider are the costs of product and marketing support.
Often, when a new businessman enters the market, he forgets or totally ignores the cost of support for his products and services.
Depending upon the type of business he/she operates, that could be a very costly mistake. Why?
Because if you don’t understand fully the expenses of doing business in its entirety, there is a good chance you will have a good portion of your profits consumed by these “hidden costs.”
Obviously, your product and marketing support will vary depending upon the type of business you operate.
In some product lines, the support will be minimal. If you sell digital information in the form of an ebook or a DVD, your ongoing support costs should be fairly insignificant. Most everyone can figure out how to read the ebook or play the DVD on their machine – without any special knowledge or instruction.
You may need to coach some customers on how to download digital files. But that should be fairly easy and inexpensive.
However, if you choose to sell a product like software, your support costs could severely impact your profit margin. Software products are notorious for customer questions and problems because often the interface and even the very concept of use is new, unique to the product, and sometimes confusing to less experienced computer users.
Many folks feel it’s just as easy to get on the phone and call support for an answer as it is to figure out how to do something by studying the user’s manual or included documentation.
If half (as an example) the customers that purchased your software also called for assistance, you could be spending a great deal of your time (or that of a support person) on the telephone coaching customers on the use of your product.
If fact, you could even end up losing money on individual sales if the buyer repeatedly requires your time to figure out how to make your product work properly.
If you sell an inexpensive product, say at a $29 price point, and a customer requires your assistance for 1/2 hour, you may have just eaten up all the profit there was on that one sale if your time is worth anything.
Now I’m not suggesting that you solve this dilemma by refusing to give customer support. It’s important in today’s online marketplace to treat your customers like gold since you want them to make back end (repeat) purchases from you in the future.
Customers expect to be given personal assistance if they need it with any product.
My point is that you need to make sure you include the cost of support in the expense column of every product and service you sell. If you consistently track such things, you will have a good idea what that average cost per user is over time.
Don’t forget that there may be a support cost for other business activities besides product costs. Customers will ask how to sign up for a service, how to pay for items (credit card or not), when you will be sending goods, how to send goods back, how to remove their name or information from your records, how to get a discount or special price, and even how to get a new password because they forgot the old one.
You can minimize support needs by having excellent FAQs (Frequently Asked Questions) and a clear and intuitive navigation structure for your web site. You can also be very clear about your policies and procedures in advance. But there will always be a need for some level of further customer and prospect support. You just need to make sure you have a clear picture of what that need will be in your business and how much you should budget for that expense.
To your online business success,
Steve Browne
www.SteveBrowneDirect.com