Sunday, October 1, 2006

Customers want it all... why not?

The guys over at DIA uncovered a quote I missed from the DotOrganize survey:

Users tend to expect technology vendors to provide around the clock support and intensive customization at below market value.
On one hand, I love this quote because there seems to be a complete disregard for the cost and complexity of technology in the civic sector. The market value of a high level of service is pretty expensive.

But more importantly, it unscores the fact that our current technology delivery models are ill suited to deliver super-low-cost technology to the grassroots. Sure, if every group would let me sell internet ads and cell phone service to their constituencies, I could provide them with great service for free. Probably wouldn't get many customers though since groups' constituencies would probably object.

At CivicSpace we recognize there are three big levers in a service provider's financial model. First is the cost of customer support. If I give customers a 24-hour 1-800 number, I have to charge customers a lot of money. Conclusion: time for a new model of customer support.

Second is the cost of customer acquisition. If I send a sales guy yout to the customers, I have to charge the customer a lot of money. Conclusion: time for a new customer acquisition model.

Finally, if I have to spend a bunch of money on programmers and acquisitions to deliver the functionality customers need, I have to charge the customer a lot of money. Time for a new R&D model.

Providing technology services to the grassroots as a business is a lot like providing cell phone service to consumers... consumers will ask for far more than you can afford to deliver and your competitors will be driving down margins like there is no tomorrow.

But by rethinking the model, challenging the assumptions, and changing the way we achieve our mission, we think CivicSpace has a model that can use all the major financial levers to deliver around the clock support and intensive customization to the grassroots at a market rate far below what the current providers can achieve. Stay tuned.

1 comment:

marnie webb said...

This is a terrific point, David.

I think that, among other things, getting at the ways in which different layers can plug into each other to find what's missing is important.

More importantly, though, is getting customers used to a new way of doing business. Really, I think it's about choosing a model that allows for individuals to join a community of support. That's very different from "I call this number..."