Next time you go into an Apple store, notice that 50% of the space is for retail sales and 50% for service and support. I overheard this weekend that it is the most profitable arrangement in the history of retail.
True or not, it is curiously obvious that complex products not only need after-market support, but giving it equal treatment increases profit through customer satisfaction and loyalty. Plus all the cross sales when you have to walk through the retail space or wait a bit.
By contrast, you have to walk through a cramped support department to get to things at Fry's. After some extreme frustration there I shifted my technolust procurement to Best Buy. Their service department is clean, well lit and all, and they do have that Geek Squad specialization. But recently I attempted to have my six month old PS3 serviced there, but apparently they will do absolutely nothing for in-warranty products unless you buy some kind of extra insurance at the time of purchase. Absolutely nothing. So I had to call Sony and go through a ship and repair process.
This is in contrast to when my wife's camera broke under warranty and Keeble & Schuchat sent it to Canon and called us when it came back to the store for pickup. Simple enough, and I bought a tripod while there.
What Best Buy is missing is the fact that they provide no after market value add with their retail -- in comparison to buying and servicing with an e-commerce vendor. If I buy something in person I expect a person to be able to help me when things go wrong. At least during the manufactures warranty, and I might pay to extend that period with the retailer.
But I think Apple gets something more than the value of customer experience. According to the Consortium of Service Innovation, there is an iceberg effect for product knowledge. 90% of conversations about supporting products never touch the company. Only 10% touch the call center. And 1% of this service and product quality knowledge are assimilated.
Sometimes this distribution is purposeful. Support is viewed as a cost center. Time to resolution (which we've decreased by as much as 30%) often trumps customer satisfaction or capturing knowledge. Worst practices are often employed to incent contact center reps to avoid contact.
The problem is far worse with multi-vendor support. Multi-vendor issues take 3-4 times longer to resolve. So almost all vendors explicitly do not support these issues at all. There is some promise in Vendor Relationship Management, or communities that address systemic needs through the demand side supplying itself, but only the beginning of promise.
So I wonder if Apple's vertical integration strategy is what makes this possible. Is the 50% rule only a rule if you tackle the multi-vendor support problem? Alignment or integration between Marketing and Support plays a role and some organizations put the same person in charge of Product Quality and Support. But this opportunity space inherently requires rethinking not just organizational boundaries, but the firm itself.
For your business online, what porportion is dedicated to retail vs. support? When not constricted by the boundaries of physical space, and can be empowered through community, where do you draw that line? What crosses that line is a process not unlike osmosis, where energy is released with the right balance.
UPDATE: article in the Boston Globe on listening and participating to online conversations about service and support
