How Great Support Impacts Retention
This episode might reference ProfitWell and ProfitWell Recur, which following the acquisition by Paddle is now Paddle Studios. Some information may be out of date.
Originally published: March 19th, 2018
Main Takeaways:
- Companies perceived to have good support see 12-36% higher WTP.
- Retention is ~15% better for companies perceived to have good support.
- Premium support is becoming more of an expectation over time.
Time and time again support is looked at as a cost center. Yet, with the customer success movement and phenomenal support software, that view is waning and data suggests you may just have a profit center brewing amongst your support and success teams.
To answer Nick’s question we looked at the data from over six hundred thousand consumers and nearly five thousand companies. Here’s what we found.
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Good support drives willingness to pay
First up, to get a direct answer out of the way, good support absolutely increases the willingness to pay and retention amongst customers.
We coded respondents perception of a company’s support before measuring their willingness to pay. Those customers who perceived a company’s support positively had between a 12% and 36% higher willingness to pay than the median. Those on the negative perception side had 8 to 16% lower willingness to pay. Neutral respondents were willing to pay about 5-10% less than the median. This indicates that bad support isn’t taking away from willingness to pay as much as good support is driving willingness to pay - padding our profit center argument.
Retention also impacted by support
We see a similar relationship on the retention side, as those folks on the positive perception of support have roughly 6 to 15% better net retention and those customers with poor perceptions of support seeing about 8 to 11% worse retention.
Premium support is becoming more important to buyers
Digging further, premium support has traditionally scored highly as an add-on - meaning it’s not being valued by everyone, but those individuals who value premium support are willing to pay a good amount for it. Over time though, we’re seeing this view change, where support is still a powerful add-on, but is quickly creeping into being an actual differentiable or core feature - one where the majority of folks actually want premium support and are either just expecting it or are still willing to pay for it.
As more and more features get built and the function aspect of software becomes less differentiable, these formerly intangible pieces of your product - design, brand, and even support - will continue to become more and more important.
Want to learn more? Check out our recent episode: How Integrations Impact Retention and subscribe to the show to get new episodes.
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you've got the questions and we have the
data each week we dive deep on
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benchmarks of the subscription economy
that you just can't get anywhere else
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this is the profit well report hey
what's up Patrick and my friends at
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price intelligently it's Nick from help
scout I got a question for you
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you know I'm passionate about customer
service right so I want to know how
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great support impacts overall retention
and willingness to pay for a product do
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you have any benchmarking data on that I
think it'd be awesome Thanks
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oh boy look at that Nick Francis flow
I'm jealous of that hair all right well
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time and time again support is looked at
as a cost center you know with the
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customer success movement and phenomenal
support software that view is starting
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to wane and data suggests you may just
have a profit Center brewing amongst
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your support and success teams to answer
Nick's question we looked at the data from
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over 600,000 consumers and nearly 5,000
companies and here's what we found
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first up to get a direct answer out of
the way good support absolutely appears
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to increase the willingness to pay and
retention amongst customers those
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customers who perceived a company
support positively had between a 12 and
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36 percent higher willingness to pay
than the median those on the negative
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side on the other hand had an 8 to 16
percent lower willingness to pay
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compared to the median and neutral
respondents were willing to pay about 5
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to 10 percent less this indicates that
bad support isn't taking away from
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willingness to pay as much as good
support is driving willingness to pay
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padding our profit Center argument we
see a similar relationship on the
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retention side as those folks on the
positive perception of support have
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roughly 6 to 15% better net retention
and those customers with poor perception
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of support are seeing about 8 to 11
percent worse retention. Digging further
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though premium support has traditionally
scored higher as an add-on meaning it's
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not being valued by everyone but those
individuals who do value premium support
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are willing to pay more for it over time
though we're seeing this view change
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where support is still a powerful add-on
but it's quickly creeping into being an
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actual differentiable or core feature
for a product one where the majority of
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folks actually want premium support and
are either just expecting
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or are still willing to pay more for as
more and more features get built and the
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function aspect of software becomes less
differentiable these formerly intangible
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pieces of your product things like
design brand and support will continue
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to become more and more important to the
value of your company well that's all
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for now if you have a question ship me
an email or video to pc@profitwell.com
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and let's also thank Nick for sparking
this research by clicking on the link
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below to share on LinkedIn to give him
a shout out we'll see you next week.
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This episode of the ProfitWell Report is brought to you by Zapier. Zapier moves info
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