September 24 2006

[Editorial] Customer contact: BT now offers IT support in the home...

Warm on the heels of DSG's The Tech Guys, BT is launching a 'virtual engineer' service - with home visits costing from £50 and a monthly support option from £10. That's the news bit - but what about the trend to skip over margin-free savage pricing to reintroduce "value" to the service mix, and of course get your representatives into customers' homes?

So, then: BT. Launching a new service that'll see BT engineers in your home>.<br >
I could see the point of DSG's The Tech Guys since it would differentiate their offering on the high street and give a better link to customers to increase repeat sales (and even to generate more frequent sales).

In BT's case, however, there's a question of purpose.

Making broadband support chargeable is of course a sensible commercial move. There's so little margin in provisioning broadband that some sales people are instructed not to answer a second pre-sales enquiry call because the margins are too thin to support that level of service!

Whether or not customers will want BT to support their computers is another question. The advantage they have is that so many customer questions are related to internet connection and virus concerns. BT - as the ISP - is well placed to be the first port of call for these customers. They also have a small advantage in that they'll be perceived as 'neutral' in that they're not a hardware vendor (unless that announcement is scheduled for tomorrow... ;) ).

The moves in this market bring a number of thoughts to mind:

1) customer engagement has moved into the physical world. The technicians are the door-to-door salesmen, or representatives, of this service age. This is an area that could be developed and I'd be interested to see how enterprising technicians could in fact become franchises - backed by etail capability in many linked areas 2) each company is claiming thousands of technicians. I wonder whether we'll have a situation as in breakdown recovery where you'll have a tow-truck that's affiliated with all of the breakdown services? 3) In the bad old days (when a phone connection cost £100 or more) we had no option but to all pay. With transparency and competition the offering has been stripped back but there's still a market for the higher priced, higher service option. There's a question here about transparency and pricing models for etailers - take as an open question the electricals market, where price competition is savage and there's no clear way to provide 'value added services' (when the market is saying they don't perceive value and have no desire to pay for it).

These musings aren't linked in any coherent way other than to consider the cyclical pressures of intermediation and disintermediation: or middle-men and value.

Technology and competitive pressures push out service options and drive down price. Then people spot a service gap and create a niche offering. The opportunities then is for these service providers (the technicians) to increase their service offerings so as to increase their profitability.

It'll be interesting to see if this is how the services develop, and of course how long before the cycle moves to the next stage.

The main take-away of course is time spent directly with a customer, satisfying their needs and wants, is the most precious, valuable commodity that a business has. Used well it's the only mechanism available to a business to get out of the profit-eating pressures of price-led competition.

Ian Jindal If you disagree with these comments don't fume in silence - think of your blood pressure! Skip an anger-management course and write instead to editor@internetretailing.net. You know you want to!