The Apples and Oranges of Customer Service

I was a little surprised to come across BlueHost president Matt Heaton's rant against GoDaddy:

Unfortunately their service and support has gone down as their numbers went up. We spend about $70,000 a month with GoDaddy (Actually Wild West Domains - GoDaddy’s reseller arm of the company). In fact, we account for about 22% of the TOTAL monthly domain sales for their Wild West Domain division. We are either their #1 or #2 affiliate for all of GoDaddy. Sweet! We must get a little extra attention because we are a valued customer. I WISH! Our level of service that we have received from GoDaddy is the WORST that I have ever had. We give 10X the service levels for a $7 a month customer than GoDaddy gives us for $70,000 a month.

My own experience with GoDaddy has been quite good. In fact, when I worked at EV1Servers, I complained that GoDaddy offered faster support on my $4/month account compared with what I was able to obtain on behalf of $40,000/month EV1 customers. In particular, I've been impressed with how GoDaddy's techs are able to upsell/cross sell the company's other products at the end of a support call. This kind of interdepartmental training is no piece of cake; at most web hosting companies, different functions are performed by different groups whose competencies don't overlap at all.

After reading this Harvard Business Review article, the discrepancy between Matt's experience and mine is starting to make more sense. According to the article, there are two methods for managing customer interactions: you could take a "Behavior Control" approach and train staff to follow specific processes, or create an "Outcome Control" environment in which employees are subject to few guidelines. Instead, they're free (and expected) to do whatever it takes to please customers.

Most web hosting companies - including both GoDaddy and EV1Servers - are "Behavior Control" organizations, where sales and support inquiries are answered with more or less standard responses. It's an efficient way to work with small-ish customers who don't have out-of-the-ordinary requirements. Given a good backend knowledgebase and a cheerful attitude, even the newest rep can deliver highly satisfying customer service.

The problem is, as customers grow, they become more likely to have unique requirements that aren't covered by the web hosting provider's internal FAQ. At this point, employees trained under a Behavior Control system lose the ability to respond quickly. Large customers are likely to conclude that their vendors don't care, but in fact, the vendors might have very concerned reps who just don't know how to help.

Matt assumes that GoDaddy's deteriorating service is a scalability problem. The more GoDaddy grows, the less attention BlueHost gets. But I'm wondering if Matt's having a hard time because BlueHost - rather than GoDaddy - has outgrown GoDaddy's support system.

GoDaddy's staff might be better equipped to handle 10,000 $7 customers versus one $70,000 account. The two sets of skills are apples and oranges - you can't convert one into the other or quantify available resources under the same category. What GoDaddy (and EV1Servers, and BlueHost, if it has large and growing resellers) needs is a separate team of Outcome Control specialists who can look within - and beyond - the organization for whatever solutions major customers require.

Comments

[Sports Racer]

I certainly agree with your assessment. It takes some investigation sometimes to figure out that customer "A" has custom requirements that fit outside the normal realm of support.

I think the problem can also compound on a company when it has multiple lines of business. Support personnel have to know into which branch of its business the customer falls (if the support level is different), and sometimes those lines are pretty grey.

[Isabel Wang]

So the title of the Harvard Business Review is "How Right Should the Customer Be?" If the customer is more right, then the vendor should do whatever it takes to win/keep the account. But if the vendor's own processes are more right, then support personnel shouldn't cross those gray lines.

What makes the customer more right? Profit margins, I would say. Matt buys approx 10,000 domains per month, so compared with a single-domain signup, GoDaddy is saving 9999 domains worth of customer acquisition costs.

Matt would be more right if GoDaddy's cost savings are significantly greater than the volume discount he receives. In this case, it would make sense for GoDaddy to put more effort into being nice. Otherwise, GoDaddy's standard operating procedures would be more right, because it wouldn't make economic sense to keep Matt around.