12 January 2010

The cost of customer service

This report on customer service problems Google is facing with its Nexus One phone is a case study on how success in one arena (software services) does not always translate well into another arena. Customer support is expensive. I remember reading cost studies of ISPs and telephone carriers in the 1990s that indicated that customer service accounts for 35-50% of total costs. What was memorable to me in those studies was that providing customer service was more expensive than operating the networks that the customers used! It seems that Google is learning this lesson now.

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