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I think that as long as there are customers (especially ones paying for something), customer service will be a potential (key) differentiator.

I agree with Isabel: there will be two types of customer service. One for the mass market, the other one for experts.

But I also agree with Doug: the importance of customer service will never evaporate. IMHO the technology itself hardly ever replaces the need for a human help. It would be too perfect world :)

Doug and Jan - How many of Myspace's members signed up because the site has good customer service? How about YouTube? LinkedIn? Flickr?

Many of my friends have paid accounts on Flickr, but none of them have *any* customer service stories (good or bad) to tell. On the other hand, if you go to Web Hosting Talk, you will see thousands of "my web host has bad service" threads.

Does the average web hosting company has less friendly or less competent reps than Flickr? I doubt it. But their product is less easy to use, hence the much higher support volume and likelihood of dissatisfaction.

I really, really think there are two kinds of customer service: "be nice and responsive" puts you in McDonald's or Target's class. This level of competency is expected; you won't get any brownie points for delivering it . Of course, on the down side, you do get bashed if you don't meet certain minimum standards.

But "be knowledgeable" is another story. You've got to hire better developers than your developer clients, and have more ecommerce expertise than your retailer customers. If they look to you for advice and insight, then you won't have a "potential (key) differentator" but a sure advantage.

Will web hosting's ease of use improve? I hope so, in which case, the volume of "be responsive" calls will decrease, and most of your customer interactions will be in the "be knowledgeable" category. So instead of training your staff on the importance of customer service, it's time to turn them into experts on your customers' businesses.

"Will web hosting's ease of use improve?" That is exactly the point! Of course it will. But still there will be a majority of non-expert requests like "how do I publish my web pages? - ftp - what? never heard" today. Would I be wrong.

There is a good lesson to be learned here. If customer service is your only differentiator, you will not succeed. You have to have high quality and functional products. If your products provide little value or are low quality, you can hire an army of customer service reps, but it doesn't change the fact that your products are not competitive.

I really like your blog posts on this topic because this is constantly discussed at my company. It is great to send your articles to our senior management to demonstrate that other people share this viewpoint.

Jan - I think automation solutions like Aggregated Knowledge (http://www.aggregatedknowledge.com) and ATG (http://www.atg.com) might be more efficient than human reps for answering repetitive inquiries that don't require a high level of expertise.

Aggregated Knowledge offers an Amazon-like recommendation engine. This means you can show a customer different tips and tricks based on his navigation behavior: what did he click on, how long did he stay at a certain page, etc. And ATG sells knowledgebase software that supports dynamic personalization. You can set up an FAQ and ATG will choose which entries to display based on what customers ask.

In other words, why should customers have to call your support line or submit a ticket and wait for someone to respond? Why not anticipate their questions and answer them automatically?

BTW, here's an interesting point of reference: 35% of Amazon's product sales supposedly result from auto-recommendations. Can a team of human sales reps achieve the same rate of upselling -- at the same cost?

The idea that "customer service" will be replaced or made irrelevant by innovation and automation really ignores the human aspect of what people are looking for in web hosting. People are looking to connect with a company that can help them be successful with their Internet presence. Our industry deals with a myriad of advanced concepts, technologies, and services that are still only barely accessible to the masses. Automation is great for eliminating the mundane support and billing request, but it is only effective if used as a means to utilize your most valuable resources (people) to reach out and proactively interact with your customers. Automation and innovation play an important role in freeing up resources to deliver truly personalized value. You can only achieve this through true human understanding of what people want.

Sometimes people in our industry caught up in our very limited view of the Internet world, assuming that the YouTube's, MySpace's, and Flickr's of the world are the future and widely accessible to the common person or small business. Sure, they have impressive numbers, but there is a vast opportunity that lies outside the existing community of advanced web users.

Customer service is only irrelevant if you have a narrowly focused vision. Sure, McDonalds was able to replace truly good service with automation and procedure, but it will never replace the dining experience of high-end restaraunts. I agree that the consultative approach used in managed hosting by companies like mine (and Rackspace, but few others) is more than just support, but the importance of fortifying that with a truly great service culture can't be ignored.

Besides, even if "automation and innovation" are key, you can't develop services that resonate with customers without a great understanding of their needs and wants. Just because you are shifting the work to application developers and UI designers, doesn't mean they have to be any less in touch with ensuring a fantastic user experience. Let's not confuse a great customer service culture with "great phone support" which is only one piece of a much bigger pie.

Lou, high end restaurants have waiters that are experts on food and wine. These folks know waaaay more about their products than you do. They also make recommendations based on whether you're organizing a corporate event, a family dinner, or a night out with the guys.

Most web hosting companies are NOT staffed with employees who have greater ecommerce, application development and other relevant knowledge than their customers. This gives them two choices: automated and become as efficient as McDonald's, or increase their level of expertise.

A "truly great service culture" just won't cut it without experience and expertise. Even the corner hardware store in my neighborhood is staffed with seriously knowledgeable people who've painted more houses and done more woodworking than the average customer. And like high end restaurant waiters, they tailor their advice depending on who the customer is, what the person would like to accomplish, etc.

In contrast, a majority of the web hosting execs I've met don't have a very clear idea as to who their customers are. Some of the vague answers I've gotten include "SMEs" and "IT professionals" - as if all members of these groups have similar web hosting requirements. They also don't know what users are doing with their servers. A sales manager at a prominent company once told me that he "doesn't have time to ask" because he's "too busy putting together price quotes".

Is my vision of customer service narrowly focused? Yes. And it says a fantastic user experience can only be delivered with someone with fantastic knowledge of both the technologies that customers intend to use - AND the context in which it will be used (ie each customer's background and situation). If I can get expert advice at a hardware store, shouldn't I be able to expect even more from my web hosting provider?

Isabel,

I think you may be conflating the realities of Rackspace Support with the image projected through their marketing. The reality is that hosting company's who haven't figured out how to use their hosting offerings as points of entry into their consulting services really provide the kind of support you're talking about. Outside of the tier of giants on the scale of IBM Global Services (who I don't see as being web hosting companies of the sort thewhir is interested in), there really aren't any well established hosting companies doing this sort of thing.

I've seen signs of several companies making quiet attempts, but so far no one seems to have the right combination of innovation, organizational flexibility, and risk capital to successfully field such a service in any sort of systematic way.

ahem:
's/really provide/really don't provide/g'

Hi Venotar,

My thoughts are actually based on my own experience. I worked at EV1Servers for almost 3 years, during which I was never happy with the level of service I was able to offer my customers. I got dozens of phone calls and emails a day from companies looking for in-depth, expert advice on complex technical issues - sometimes in languages I don't speak. These people really expected me to have answers - their businesses depended on them.

In my mind, "good service" meant having the willingness and ability to walk these customers through all of their available alternatives and helping them choose the right solution based on their budget and growth expectations. I could not deliver good service because I didn't have enough knowledge.

The only value I provided was empathy. I was once an Internet startup owner, so I know what it feels like when your ability to make payroll hinges upon your web servers' reliable performance. I was hosted at Rackspace. My account rep there provided great service.

Hello Isabel,
I kindof cringed when I saw the title of this new thread. I'm a big believer in customer service and feel that it will continue to be a driving force in the hosting industry for a long time to come. So I'd like to clarify a bit.

Personally, I feel there are 3 functions of customer service common to most webhosts: Sales, Marketing, and Support.

Sales ranges from basic order-taking to high end consulting services depending on the webhost and the knowledge/experience of the individual sales rep.

Marketing handles getting to know the industry, competition, and (most importantly) the problems that your customers (and potential customers) need help solving.

Support is a helpdesk. Someone to call (or email, again depending on the hosting company) at any time when something goes wrong.

The overall value of Customer Service to a webhost is, if anything, going to increase in the future. However, under the Customer Service umbrella, I see a decline in the value of the support function and an increase of importance in the sales and marketing functions.

I come from a support background, and often tend to only think about the support function when talking about customer service. In fact, you could pretty much go back to my original post and replace the words "exceptional service" with "support" without altering the point I was trying to make (the declining importance of the support function) in any way.

I don't feel I'm alone in equating "support" with "customer service" though, and this troubles me. It seems to me that many of the more established (older)webhosts today are also trapped in this way of thinking and are trying to differentiate themselves solely based on the perceived strength of their helpdesks. While this will probably be a successful strategy for the short term, over the long term I'm not so certain.

Scott,

Sorry - didn't mean to put you on the spot! I *really* like your distinction between sales/marketing/support; that totally makes sense. And I agree that helpdesk will be the least important function among the three.

The challenge is, there's sometimes a pretty thin line between sales and support. For instance, a customer once complained that he's not happy with his RAID-5 server's performance. From a helpdesk perspective, good service means checking out his machine ASAP and telling him nothing is wrong. But in the grand scheme of things, what he really wanted was (a) some advice on the relative performance of SATA vs SCSI/RAID1+0 vs 0+1, and (b) price quotes on every feasible option.

It really frustrated me (not to mention most customers) that it takes several separate phone calls (or having your ticket bounced around between departments) to get such a situation taken care of. In the meantime, the customer's losing business because his site is slow.

So I don't think it's right for hosting providers to talk about "good service" unless they're prepared to REALLY meet customers' expectations. And those expectations are to work with a vendor who has a big picture understanding of what they need to accomplish.

Customer's are smarter these days and are not looking to go with a particular hosting service just based on price, and where that hosting company shows up in a google search. I used to work with a large hosting company that was awesome at marketing themselves on the web, but when it came down to service, oh man!!! We were signing up about 500 customers or more a day, and the more we signed up the more problems we had. I have learned that in order to really provide top level customer service is to hire the right people, and to take care of your employees. If your employees have vested interest you are more likely to provide the best possible service and support. The core to webhosting starts from within the frameworks of a company and the technology that it uses. Just because Godaddy might appear to be the industry leader, when it comes to service they are far from it. Trust me!