Is customer service outsourcing a viable option?

Outsourcing your Customer Care to a 3rd Party may make sense – but I would encourage you to select a vendor located in your region.

Before you consider sending your call center work overseas - just ask your friends & neighbors about their Call Center experiences.

I’m sure that some of your friends will tell you that they’ve occasionally had the experience of dealing with a Call Center Agent based in your region who was clearly a poor fit for the job - and who delivered a poor caller experience.

But when it comes to describing their experiences dealing with a company that has shipped their Call Center work overseas - the vast majority of your friends & neighbors will tell you that they generally have a hard time understanding – or being understood by the Agent – and that their call is typically being handled by a ‘script reader’.

The Call Center Agent is your ambassador to your customers. The human voice of the Agent provides your company’s human face. If your prospect cannot understand the Agent due to accent issues or communicative style - the problems are compounded. The prospect can become agitated and your company may wind up losing a customer and future sales. In the present economic environment, just hearing a foreign accent could trip that trigger. Losing dollars chasing dimes is not a wise long-term Customer Service Strategy.

Companies are also re-examining the impact of sending their Call Center jobs overseas on their corporate reputation. Corporate Social Responsibility is considered an important factor in business success today. Companies are thinking twice about employing workers in countries with poor human rights records - or lax labor standards such as India.

Ask your friends what they think about the exploitation of Labor. Call Center workers in India experience abuse & exploitation to a degree and on a scale that would be viewed as criminal in some instances by North American Courts of Law. For example; Indian Call Center Agents are treated as 21st Century ‘cyber-coolies’. They work graveyard shifts - under high pressure – in work environments where liberal attitudes to sex and club drugs are encouraged and thriving. Colluding employers have set up “Blacklist” data bases - containing the details of their Call Center employees - so that “negative insider elements” can be detected at the recruitment stage. Workers in their hundreds are fired without so much as one cent in severance pay.

Overwhelmingly your friends & neighbors will tell you that when they are contacted by telephone – they want to speak with a Call Center Agent from their region - who is typically better able to serve and communicate with them. Probe a little deeper – and they’ll also tell you that they’re opposed to shipping Call Center jobs overseas – and particularly to countries with poor human rights records - or lax labor standards such as India.

From the Jan. 2010 Issue of Site Selection: “Offshoring calls to India works in very limited situations. Interaction with clients and understanding the culture & environment of clients doesn’t work very well at all. The direction of the industry is to bring these customer facing jobs back to the USA.”

The latest Labor Market Outlook from the Chartered Institute of Personnel & Development in the UK: “UK companies are bringing back call centre operations to the UK from India. Most of the companies that we deal with are looking to keep call centre staff in the UK wherever possible because there is a significant increase in the level of service and customer satisfaction provided."

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Outsourcing your customer service is definitely a workable option, though it may depend to some degree on what your company does and for whom.

If you already segment your clients in some fashion- value to you, activity, whatever it may be, you may find that by outsourcing the service for your lower tier clients, you can focus much more closely on the top tier in house without having to build as big a call center. You can outsource the service for every client as well, of course, if you are comfortable losing that immediate control over your most valuable relationships.

As for the requirement for top level service, you can find an outsource provider who will do whatever you require. You get to set the metrics and how they'll be measured, the penalties they incur for not hitting your marks, any rewards for meeting/exceeding your marks, etc. All of that means that you do need to be prepared to actively manage the outsource relationship on an ongoing basis. Still, the flexibility you get from being able to add and remove staff as your volumes change is certainly something worth considering, as is the reduction in the number of hr headaches!

The downside depends a bit on your approach to customer service. If your requirements are more transactional in nature, it's certainly an easier brief to fill. If your ideal service employee is high touch and exceptionally specialized, it's going to be a bit more difficult. Still doable, mind you. Anything is, at the right price.

So a workable option? You bet.

I think its a very viable option. There is almost always ROI, and the classic outsourcing argument applies. Let the outsourcer focus on their core competency so you can focus on yours.
I am convinced that the right outsourcing partner can "own" your end-users as effectively as you could internally. I have managed programs as an outsourcer that have achieved world-class levels of customer satisfaction and retention...so its more than possible. The right partner will have a proven transition and knowledge-capture process that is integrated with your organization so that any new and/or developing information is quickly shared and mastered.
In the very best of situations, you should set up clear lines of communication with your outsourcing partner, establish appropriate metrics, reporting strategies and frequencies, and set expectations for your level of involvement in team training and development.
I hope this helps!

I agree to the replies posted above. One thing you may want to look into, though is the experience and the quality of the representatives (e.g. call center agents) who will be working for your customer service process. The Philippines is a good source of well spoken English speaking reps. A considerable chunk of these people will speak like your average US local. Plus the fact that 90% of Philippine call center employees are college degree holders, which gives them a major plus in terms of professional etiquette and work knowledge. I'd like to be able to hsare additional insights with you regarding this and help you look at whatever options you have. Please visit our company site: www.exigoprocess.com.

My first, second, and third, choices would be to keep customer service in house! Better to have a slightly extended response time or more reliance on self-service resources than to relinquish control to a third party. My experiences with outsourced customer service have without exception, miserable. This has come down to the deciding factor more than once when I have picked a vendor for services.

That all said, if you put a gun to my head and make me go with the fourth choice, go Philippines. As a previous poster pointed out, their call center workers use of English is generally impeccable--in fact, they often have to be trained to use slang and contractions. Additionally, for most of the English speaking world, they are culturally close enough that they can easily adapt to your customers.

Those are the more or less objective reasons why I too advocate using Filipinos, if you have to outsource customer service. Subjectively, the vast majority of them that I know personally (my wife is from the Philippines) or professionally have a work ethic that make mine pale in comparison. You will certainly get a good value for money spent.

Paul
Visit my CRM/Technology blog at http://www.paulmyoung.net

From strategic perspective outsourcing your customer service function can reduce your operational costs and well as give you scalability for future growth.
As Paul has commented, it can have challenges if the vendor selected is not invested in providing the best service for your organization.
An invested vendor has some skin in the game which provides better long term results and a better long term vendor relationship.
Phillipines is definately a good location to outsource any contact center services due to the cultural affinity with the US.
At Aegis, we have 15 years experience of providing customer lifecycle management solutions with 40 domestic, nearshore and global delivery centers.
Check out our website http://www.aegisglobal.com/
Drop me an email at andretheguru@yahoo.com if you would like any help with a cost effective solution.

Andre

A common rationale for outsourcing customer service calls is improved performance and at the same time complete the job function more effectively or more efficiently or, both. There are situations where the job function is too complex to outsource and hence, it is sometimes best to build the call center in house. One thing that needs to be remembered is that with outsourcing you normally contract a fixed price, service level agreements and obtain more flexibility to handle call volume fluctuations. When handling calls internally with internal employees, you pay regardless of the service they provide.

With contact center labor costs running at 50% to 70% of a total operating budget, many companies look at outsourcing as a strategy lower operating costs and bring their costs under control without sacrificing the quality. It has been cited through research by Purdue University that to build a call center could cost as much as $50,000 per agent. By outsourcing, companies can use their capital investments elsewhere.

One last thing to keep in mind, by outsourcing, many service providers operate their support facilities 24/7, 365 days a year. This provides better service for your customers and at the same time, you are able to utilize unique skills, expertise, technology and people management skills that already exist in the provider’s contact center environment. This is extremely advantageous for small and medium-sized companies with limited resources.

Hi Annie,

I'm currently setting up an outsourced customer service solution based in the Philippines. Here are a few of my observations so far....

- It's a cheaper option than building inhouse, but not ridiculously cheap as many people may think. For a small call centre (4-5 FTE) you're looking at around USD$16 - $20 per loaded hour.

- The loaded hour is relatively well resourced, including telephony, supervisor, training, quality assurance and HR costs.

- Outsourcing at a basic skill level is very process driven. You'll need to make sure that your process and policy is very well documented.

- Although OS customer support has certain stigma associated with its image, the skill level of candidates is generally very high. Many CS roles in the Philippines for example are set as a professional vocation and usually require perfect bilingual language skills as well as a undergraduate degree.

- Many of the large offshore providers only start providing viable services over the 40-50 FTE mark (think Sitel, Convergsys, Integra, Teletech, etc.). There are boutique offshore providers that provide professional services for smaller scale projects, however.

- Expect to achieve cost savings realisation by about week 24 as compared to bringing CS inhouse. There's about a 25%-30% cost saving after 24 months using BPO (business process outsourcing).

Hope this helps, and good luck!

I believe outsourcing is a viable solution as long as the company is willing to establish a knowledge foundation first; one that will empower (or continue) to empower your customers via web, social, etc. and one that will empower the contact center agents-whether that be held internally or outsourced.

Retaining customers for "your type of business" is the key objective when you are looking to outsource customer support. You are the best judge to make this determination that your customers will like it or not.
In my opinion outsourcing CS can be cost effective and beneficial if you have the Tier 1 and Tier 2 operations outsourced to a reliable company and have the supervisors or Tier 3 within your organization. This will help you in many ways
1- Instead of keeping a tab on the vendor, your supervisors will always have updated and current knowledge on problems, complaints and customer affairs
2- Changing vendors would be much easier if you are not satisfied as the third Tier would be able to bring the new vendor upto speed very quickly.
3- Live in house customer support data would enable you to create upsell campaigns that are time effective.

Hi Annie,

Yes, outsoucing is a viable option. I would ask, what are my company's strategic imperatives? How is outsourcing playing a role to meet those imperatives?

Is it cost cutting? Then take some time to do the financial analysis.
For starters, consider your fully-burdened costs including: payroll tax, benefits, overtime pay you typically spend. Look into your space, furniture, personnel procurement, hardware and software including maintenance agreements, turnover, training, cost for supervision and non-productive labor. How does in-house impact other departments? Is there extra IT support as a result of having agents in-house? Is there additional HR personnel?

Does it include quality? Weigh the pros and cons to your customers experience. Speak with a few outsourced providers (including me), find out how we manage quality in our centers. In most instances, I've found our auditing frequency and CRM tools are far more aggressive than our clients. If you chose an outsourced provider, make sure someone in your organization acts as the liaison for quality initiatives for the center. It should significantly improve the relationship with your providers, and ultimately, your customers.

iServe's portfolio includes a number of leading internet and catalog companies and a handful of Fortune 100s. If you're interested in starting a dialog, please contact me at your convenience.

Thanks,

Jeff Ostapa
iServe Direct Commerce Services
www.iservedcs.com
jostapa@iservedcs.com
1-866-895-4379

Annie,

I would love an opportunity to compete for your business! I have over 20 years experience in the industry and I am celebrating my 16th year with CGS, a leading global contact center provider with facilities in the US (Tampa and Atlanta) as well as Romania (Brasov and Bucharest). We can provide support from our facilities or yours. Let me know if you have time for a brief conversation.

Sincerely,

Scott McKinley, Vice President
Contact Center Solutions Division
Computer Generated Solutions, Inc.
Office: 813-249-3281
Email: smckinley@cgsinc.com

Annie,

Looking forward in this industry, you want a company you can trust to manage your whole customer lifecycle and to help you build profitable customer relationships including the security of your revenues. This means you want tangible business results.

When supporting your sales efforts you want a company that will focus on helping you win new customers, and realize their full value.

Additionally your partner company will help you grow business by keeping customers close and build loyalty through exceptional service and support. (This is probably the most common vision of a call center, but that is changing.)

And finally you need the customer to pay you for your services. A really great partner will offer comprehensive credit management and debt recovery services to protect your revenue streams.

Hope this helps.

Daniel G. Willis
Transcom WorldWide (North America)Inc.

I have found the biggest value to outsourcing your support needs is not just the potential money saved. Outsourcing can certainly provide some cost savings - especially if utilizing an off-shore model.

To me, however, the biggest value is the expertise that is recognized. As a business owner or manager, you have your core competency and your focus should be on your expertise. You know your product and your time and resources should be kept there. Outsourcing allows you to keep your focus on your core competency while giving your support model over to industy experts.

Outsourced providers have a lot at stake in taking over your support needs. Their livlihood is directly based on the satisfaction of your customers. Because of this, they will work to ensure your customers are satisfied.

The real trick comes down to the contract between you and the vendor. When proper levers are in place in the contract, the vendor has skin in the game and can be held accountable to maintain high levels if support.

Dear Annie,

One inexpensive means of having your own in-house call center is to use a virtual call center platform. With a virtual platform, there are no capital expenditures necessary for expensive equipment and you pay a low price per seat model. Virtual platforms offer all the same features and functionality you would get from an expensive equipment solution plus they are easy to deploy and can scale up and down to meet your needs.

My company, Northwinds Contact Solutions, offers the premiere virtual call center platform on the market. For about $100 per month per seat, you get the virtual call center platform, ACD, outbound dialer, detailed call reporting, call recording, Whisper functionality and much more. See http://www.northwindscontactsolutions.com for more details or call 602-515-0395.

With regards to outsourced options, Northwinds partners with Inspiritec Teleservices to provide the most unique outsourced call center solution on the market. Inspiritec is a Non Profit call center that hires agents that are people with disabilities. Unlike most contact centers, Inspiritec’s goal is to help provide jobs to disabled individuals and cover their costs; they have no specific profit margin they have to meet. The result is that their services are priced just slightly higher than “offshore” rates.

Because Inspiritec uses Northwinds Virtual Call Center platform, clients benefit from being able to login to the platform to view activity and can access “real time” detailed call reporting, live call monitor. It is an outsourced solution that feels like it is “in-house”.

Pricing: Depends on each client’s unique situation. Submit an RFP/RFQ to receive a pricing proposal customized to meet your needs.

Contact:

Darren Prine
Northwinds Contact Solutions
dprine@thenorthwinds.com
1-800-831-8130

Hi Annie,

Outsourcing is a tricky concept really that looks very attractive initially but does have some little foibles that can be a killer!

In the first instance, understanding the diference between 'outsourcing' and 'offshoring' is important. Just because you want someone else to do the grunt work for you doesn't necessarily mean that you want it moved to another country (a suprisingly hard concept for the general public to 'get' based on the call center industries image).

The biggest hurdle in my opinion is loss of quality. Regardless of how stringent the QA methods are, on the whole, there is always at least a slight drop in quality when a call center project is outsourced. Simply, the CSR's don't care as much as they would if they worked for you directly (various reasons why but not going to get into that here, yes it can be combatted but it does happen).

Before looking at at the outsourcing route, get an call center expert to look over and assess your existing operation. You might be very surprised how some fairly little changes can impact results and reduce costs.

Outsourcing can be a superb option but take time to sit down with a 'pro' to work out your actual needs before diving into the RFP process!

Regards

Tom