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Microsoft sees gold in customer service

Microsoft is restructuring its customer service and support organization. As part of the plan, Redmond gets a new source of revenue. In return, all corporate customers will have access to the more responsive support that only Microsoft's largest customers can currently afford.

Microsoft's quest to develop new revenue opportunities won't stop at offering managed services for IT customers. The company is also in the process of restructuring its corporate customer service and support organization to create a unit that can potentially drive future business.

There will be a consistent structure across Microsoft where customers can know who to contact.

Paul DeGroot, analyst,

Directions on Microsoft


The idea is to turn its customer service and support business into more than just a cost center for Microsoft's own product groups, and to develop subscription services for customers who aren't large enough or have deep enough pockets to have "premier" contracts with the software company.

There are now two parts to Microsoft's Customer Service and Support organization, a group that changed its name from Product Support Services in 2004. One is the product support arm and the other is customer service, which includes non-technical issues like licensing.

The latest changes will impact the services group, which will grow to include items such as product information, software subscription purchases, licensing and product marketing and promotions.

A chance for support agents to upsell

Today, Microsoft's different business units keep information about their own customers, who call in for help with their products. Through offerings such as consolidated contact information and standardized response times, Microsoft hopes to increase the chance for upselling other products or services to customers by making promotional information better available to the agents taking the calls.

Microsoft acknowledged that it is making service and support changes. However, at the time this article was published, Microsoft was unable to provide comment about the significant internal changes that would be necessary to create the organization, whether it would necessitate other corporate restructuring or how the new services might be priced.

Standard support processes being developed

Microsoft's customer service and support group has created an organizational template and standard processes for every subsidiary for "use in identifying customers and their issues, [and to] handle calls and escalate technical and non-technical incidents and measure response through specific metrics," according to Paul DeGroot, an analyst who is familiar with the company's plans.

"There will be a consistent structure across Microsoft where customers can know who to contact," said DeGroot, of Directions on Microsoft, a Kirkland, Wash., consulting firm. "And the one person who takes the call is fully accountable for the resolution of the problem."

Single repository for customer data

The customer service and support organization may also eventually handle outbound calling for telesales, he said. Ultimately, all customer contact information will reside in one place.

"In the past, you might have called Microsoft with a problem regarding some product and Microsoft might have said, 'This is the best we can do,' " DeGroot

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said. "They want to get away from all of that.

Of Microsoft's business customers, small and mid-sized businesses (SMBs) and enterprises without Premier Support agreements will probably benefit the most. Premier Support customers already have a technical support rep calling on the accounts and troubleshooting problems.

Many large business customers are happy with Microsoft's services and support today. Household appliance maker Sunbeam Products Inc., a division of Jarden Corp., in Rye, N.Y. holds a Premier contract. Steve Dougherty, an IT manager at Sunbeam, said he gets "rapid action" when he calls his rep. "It's good that we don't have a problem paying for Premier, rather than feeling like each time we call it's a whole new adventure."

Premier Support pricy, but worth it to some

Hodes, Ulman, Pessin & Katz PA, which is the fifth-largest law firm in Maryland, doesn't have a Premier agreement, but when the company calls Microsoft for help, the response is usually swift. "We should, for $250 a pop," said Michael Berlin, a network administrator at the Towson firm. "They do a good job of making sure we don't have to talk with 12 people."

"But," he added, "They do have a captive audience and we will continue to pay what they tell us. For our $250 we try to milk them. We haven't had any problems and they've taken my fat out of the fire many times."

Microsoft began working on its services strategy in 2004 and plans to continue through 2007, according to DeGroot. In terms of developing its IT services business, Microsoft is already working with one customer, Energizer Holdings, to develop managed solutions, as first reported here.

Changes will be rolled out in phases

Web-based customer support is already in place. Phone and e-mail support will roll out in different regions over time, he said. Enterprise customers and partners will see the new system first, followed by small and mid-market customers, then developers and consumers, DeGroot said.

Microsoft plans to include its partners in the services reorganization. According to DeGroot, partners are being plugged into Microsoft's Knowledge Base system and escalation process -- the stepped level of problem resolution -- so customers get the same result whether they call Microsoft or a partner for help.

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