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Faced with a number of people earnestly competing for upgrades to First Class seats, the airline gate agent made a succinct announcement. “These four people,” he said, and read off the names, “have a chance for the available upgrades. All others should board the aircraft. Be aware that if another upgrade becomes available, I won’t be able to go into the aircraft to find you — the only way you can be considered is if you are still out here at the gate.” Is that airline a Product-centric or Customer-centric business? The gate agent’s words left no doubt in the minds of the customers. Which is more strategic, in your company; products, or customer relationships?

One of the fundamental changes that Software As A Service is bringing will be a necessary redefinition of the role of customers and a concomitant rethinking of the corporation. The end of the traditional “new” customers, with their exciting infusion of bulk profits, is hard for those trained in the old paradigm to contemplate. Addictions are unhealthy, and withdrawal pains for those who have allowed themselves to become dependent are severe. When customers are replaced by subscribers, what will happen to companies whose global strategies, organizational structures and how they perceive themselves are profoundly out of alignment with the change?

History is full of examples of what ultimately happens to those who cannot adapt to changing circumstances. The end of the dinosaurs. The buggy whip and carriage manufacturers of the early 1900’s; where are they now? The USS New Jersey and the Japanese Navy’s Yamato and Musashi — all three ships were awesome weapons platforms in their time, as finely built as any traditional Swiss watch — but what role do battleships and their admirals have today? How about mainframe computer people; do you know of any highly-paid openings for senior COBOL programmers this week? The lesson is clear and inexorable: those who can recognize paradigm shifts and adapt tend to survive. Those who can’t, don’t. To which class do you belong?

Every day, every hour, customer support/service contact center reps exercise one of the few powers they unquestionably possess — the power to lose a customer. What’s worse, their use of that power is invisible, for no one is ever held accountable for the loss. Who gave the Support team members such authority? How did they come to have such a significant impact upon the company’s profitability? For the answers, we have to look well above the pay-grade of anyone in the center itself.

A major computer manufacturer just announced the closure of another one of its customer support contact centers. 1,100 more people will be out of a job, to join the 900 from the last such closure who are suddenly looking for new employment. The company spokesman said that “the decision to close the call centre was about cutting costs to stay competitive.” That statement is an accurate indication of how Support is typically regarded by Senior Management teams across the industry, and it ought to be prominently posted on the office wall of every Support executive. Despite the trade-show talk of running Support on a P&L basis, when the pressure is on, the discussion will be only about the costs to be cut. While you might be tempted to hunker down and hope to ride out the storm, there’s a much better way to improve your chances for prosperity.

There are important lessons for C-Level executives and customer support professionals alike to learn from the current economic realities. The price of a gallon of gas has steadily been going up, and the impact is spreading. Is the prospect of paying $5 per gallon in the near future beyond imagination? The average person has little control over the price paid at the pump. If cost is all that is considered, the prospects look bleak. But here’s a key question: if your car got 100 or more miles per gallon, would the price for a single gallon of gas be as significant?

The best Support call of all is the one that was never necessary in the first place because the product didn’t generate the need for it. However, only buying high quality well-designed products is not a guarantee that you’ll never need to call the manufacturer’s customer support contact center. Here’s what happened on a recent expedition into SupportLand, and the discovery that there is more to being Product-centric than building excellent hardware. Is this happening in your contact center? Are you sure of your answer?

It is often said that Support & Service must necessarily be better in the OnDemand / Software as a Service ecosystem because “the customer could leave at any time. Therefore, we have to continuously earn our customers’ loyalty every month.” In reality, however, how many SaaS companies truly operate as if they were concerned about customer retention? What percentage of your customer base is at-risk? If you offered your customers an easy off-ramp, a way to painlessly migrate to another vendor, how many would take advantage of it? Or if a competitor suddenly offered to buy your customers, would they be for sale?

Amongst the common challenges that all companies and their customer contact centers face as they mature, one of the most serious is the transition from “free” to “fee” based support services. The era of bundled break/fix support needs to be over. It provides no economic value to anyone, and never did. It’s time to move towards customer centricity in more than words. The beginning is to design and restructure the customer support contact center to be about authentic value-based services, focused on increasing the productivity and profitability of your customers in their use of your technology. And in the process, significantly increasing the value of your company.

It’s time for a change, for something new to be added to the Contact Center Technology Suite. Currently, there are at least 70 manufacturers of what might be called Case Management Systems for customer contact centers. A good CMS resource is a requirement for any customer contact center that wants to be effective. However, the implementation and use of a CMS application, while it can help you to manage cases, will not guarantee effective management of the center itself.

The phone or chat line is open, and/or the e-mail has been received. The customer is experiencing the effects of an outage, bug, breakdown, failure of the technology they purchased to function as documented or promised — however you want to describe it, the bottom line effect is spelled l-o-s-s. Lost profit, lost opportunity, lost productivity; the waste-meter is ticking. Will the company’s claim of customer centricity be more than just words?

From a single post and a handful of readers, The HotLine has warmed up considerably over the past ten months. There are now regular readers from more than 70 countries around the world and all 50 states of the USA. From Hawaii to Georgia, the Maldives to Sri Lanka, Slovakia to Senegal, the Ivory Coast to Ireland, Austria to Australia, Support executives and C-Level officers alike are looking for answers and insight. Years ago, Ken Shevock, then the VP of Worldwide Support Operations for Cisco, commented “Nobody is really ‘winning’ at Support. We’re all doing the same things to try to keep up, but to get to the next level, we’re going to have to do something new.” The HotLine is about that “something new.”

While the usage rate of the “Support 2.0″ label has thankfully dropped, the assumptions and motivations that were underneath the hype are still active — and need to be examined. The idea that social networking and technology can be united to produce a free powerhouse for customer support, available everywhere via the Internet’s insistent Now, certainly seems compelling. But the enthusiasm of some vendors — and support professionals who should know better — needs to be tempered with a dose of reality. It’s been tried before in the support world. Neither the social networking nor the technology for enabling and using it are new in either concept or practice. Further, let the user beware: free support is generally worth exactly what you paid for it.

I recently had a conversation with the CEO of one of my oldest software manufacturer clients. He’s a veteran, having successfully weathered a number of industry changes over the years with his company, but he made a comment that concerned me. “We can go SaaS at any time,” he said. “We’ve got the code already revised and in place, so it won’t be a big deal if we decide to offer that model.” Unfortunately, the reports of those who have undertaken the journey to SaaS show that it will be a big deal, and the shock will be the worse for the short-range view of the initial decision and what it will bring. For a traditional model product-centric software manufacturer, changing the code to go SaaS is only the beginning, and is the easiest part. The significant challenges will come from the ripple effects of that migration on every level of the company and its people.

I’ve been asked to speak on the topic: “10 Key Things to Look For in Customer Support With SaaS Vendors” at the upcoming SaaSCon 2008 event in San Jose on March 25-26. The invitation, the phrasing of the session topic, and the radically changing demographics for the event are significant indicators of the gathering force of the SaaS tsunami — and of the speed of development of the sea change in the industry. But as I prepare for the presentation, there’s a haunting reminder at the edges of this brave new on-demand world, an unquiet Ghost of Computing Past. The lessons we still haven’t learned keep shadowing our success.