![]() | |
![]() | |
![]() |
Customer Service Information |
|
![]() |
Customer Service and Call Center Outsourcing, Whats The Buzz?
The buzz is all about customer service and call center outsourcing, also known as BPO (Business Process Outsourcing). According to Gartner, the outsourcing market in Europe has grown with over 6%, BPO with 10%. The market for offshore outsourcing (to low wage countries) is growing with a whopping 40% this year! However, the subject of outsourcing is not without controversy. So what's it all about? In the 90s, growth was the motto for organizations. Eat, or be eaten. Through the continual increase of stock value this could be easily financed. As a result, businesses were acquiring activities that are, on the surface anyway, only loosely related to the original business goals, and to each other. The demise of world economy and the burst of the Internet bubble changed all that. In these days of tight budgets and heightened attention on ROI (Return on Investment) and TCO (Total Cost of Ownership), companies are taking a good look at what they are in business for, and what they are best in. This focus on the core business has lead to the selling of complete branches of companies. Now, businesses go even further by taking a look inward, in search of generic processes to outsource. Finance, Human Resource and Customer Service are now the focus of outsourcing, which was more or less the playground for IT support in recent years. Outsourcing, the utilization of resources outside an organization, is not a new thing. Barter trading, the oldest form of trading, was in fact just that. One person traded a skill (or a product made through that skill) to get access to another person's abilities. In the old days, it made perfect sense to let an activity be done by the person most skilled. And old becomes new, as they say. Benefits of Call Center Outsourcing It makes sense that a company who's core business it is to organize and execute a call center, is more likely to do a better job at it (although that's not a given)! It's like hiring someone to put a floorboard in your house. You may be able to do a decent job yourself, but they are a lot quicker at it! So efficiency is a clear benefit. Being in the call center business, call center service providers are more likely to be able to hire skilled and experienced personnel. And, since a service provider (usually) services more than one company, there is more support personnel to go around. This helps continuity, as your service isn't jeopardized if an employee decides to leave. Also, since the customer service reps are probably working for more than just your company, you can benefit of lessons learned from other contracts. Ah, didn't I mention the money? The #1 reason for outsourcing is, of course, to lower costs. Outsourcing companies can have lower rates because of the greater efficiency, but also through economies of scale, which actually means that fewer personnel is needed for servicing the combined contracts than when each company would organize it themselves. Plus, they can easier mix more junior and senior staff, which is a near to impossible feat if you have just two customer service reps! The money question is getting even more interesting if we take the possibility of off shoring into account. Outsourcing to low wage countries like India is bringing extra financial benefits into the equation (but also some pitfalls, as you'll see later!). The different work moral is also often viewed as a benefit. For example, in India, workers are very disciplined, and organizing a 24/7 service is easier than in Western countries. Outsourcing Pitfalls Outsourcing projects often fail on unclear expectations at both the customer and service provider. When considering outsourcing make sure you yourself have a clear image of what the level of service is that you are expecting. Be as specific as you possibly can. Pick out the elements that are most important to you and think about how this would best be managed. Measurable performance indicators are better. Remember that outsourcing is a game of trust as well as money. If, when negotiating service levels, you feel that you have to stamp out every eventuality in a contract, I'd advice against outsourcing. I would, however, put an opt-out into the contract, in case trust is lost between the outsourcing partners. Believe me, no partner would want to get stuck in a contract between two distrusting partners. For the rest, focus on measurable Key Performance Indicators (KPI's) and a clear payment scheme to protect your bottom line. Anxiety for outsourcing is often fed through the loss of operational control. Remember, you no longer handpick customer service personnel, and you are much more limited in directing the service. Also, you may have to fit in the standard approach of the service provider. But the trade-off for the loss of operational control is more managerial control. But this trade-off only happens if you negotiate your service levels properly, as mentioned earlier. And then off shoring... With the advent of off shoring, a lot of vendors are now operating the market. But if you're selecting a partner, don't rely on the reputation of the vendor alone, but do make sure that you deal with the people who will be managing your service. Take special attention to the level of experience of these people. The cultural differences can be enormous, especially when outsourcing to India. Don't make assumptions, but be very specific in your business needs. And India, although the buzz is all about it, is not the only low wage country in the world! You could consider outsourcing to low wage countries that are not so far away, for instance Spain or Mexico. Another element to take into account is this: if your business is adding only minimal value or profit to the service provider, you risk receiving substandard service levels. If this is the case, it's probably safer to steer clear of off shoring. Conclusion Looking at both the benefits and pitfalls of outsourcing call centers and customer service, it is clear that there are clear opportunities for reducing the level of costs for organizations. However, do not downplay the risks. If an organization is inexperienced in managing customer service, the risks for failing are very real, as tight management and KPI evaluation is very important. But in the end, it's all a matter of trust. Ask yourself: do I trust a partner, this partner, with a piece of my business? About The Author Erwin Steneker is a senior support consultant with over 12 years of experience in both sales and IT support. Check out www.customerservicepoint.com for articles on quality Customer Service, CRM, help desk software tests and more.
MORE RESOURCES: AI Chatbots Are Ready to Talk to Customers. Sort of. The Wall Street Journal Pricing, AI, DPA, Customer Service Tools; Bill Emerson Interview; Training This Week; STRATMOR CD Workshop Mortgage News Daily Samsung Electronics Canada Customer Service Wins Bronze in ‘Best Use of Omni Channel' at International CX Awards 2024 Yahoo Finance Qme secures $3M funding to streamline customer service across Africa Techpoint Africa Building Competitive Advantage in Customer Care Through AI The Business of Fashion 311 Customer Service Center City and County of San Francisco FTC Finalizes Order with H&R Block Requiring Them to Pay $7 Million and Overhaul Advertising and Customer Service Practices for 2025 and 2026 Tax Seasons Federal Trade Commission News JEA is inviting bids for 19-story downtown tower that used to be its headquarters The Florida Times-Union Consumers Demand Enterprises Modernize to Improve Ailing Customer Experience, Says Research Business Wire American Lamprecht Enhances Visibility for Air and Ocean Shipments Using Descartes Solution Supply Chain Dive Neterra Enhances Its Customer Service Monitoring System Total Telecom Women in Fintech: A Conversation About Loyalty Ecosystems in Financial Services with Becky Hill Finovate Gladly Named a Leader in Constellation ShortList™ for Digital Customer Service and Support PR Newswire QueueKiosk™: Saving Thousands of Active-Duty Man Hours & Improving Customer Service at the MPF Office Kiosk Marketplace Finally, hard data on a real-world AI business use case: It’s huge for customer service Sherwood News Liverpool reinvents customer service through digital platform ComputerWeekly.com Firm to expand customer service in Yorkshire with new service centre Golf Business News CSPI & Nutrition Action Customer Service CSPI Newsroom Textron Aviation to Open New Service Facility at Essendon Fields Airport, Expanding Capabilities in Australia Pittsburg Morning Sun Help Department of Taxation and Finance Six Game-Changing AI Customer Service and CX Strategies Hospitality Net Consumer Directed Personal Assistance Program (CDPAP) New York State Department of Health Cigna's customer-centric strategy could ripple across the sector Modern Healthcare Major AI Success Story: Giftify Achieves 40% Faster Customer Response Times with Enterprise AI StockTitan How banks can build consumer confidence with stellar customer service Insights by Samsung Contact Us About Your Bill myclearwater.com Customer Service Center apps.tampagov.net 311 - Birmingham’s Customer Service Center City of Birmingham (.gov) DESCO's meeting held to enhance customer service and power reliability The Business Standard Palm Coast Utility Department Celebrated for Enhanced Customer Service City of Palm Coast 70% of customer service to rely on AI by 2028: Gartner Outsource Accelerator Customer Service & Support Hillsborough County (.gov) My experience as a Customer Service and Sales Intern Toby Shapiro's Experience at A.D. Sutton and Sons Chapman University Delta’s annual profit-sharing day spotlights ‘people first’ strategy The Atlanta Journal Constitution 3 Ways To Quickly Make $50 GOBankingRates Welcome to Riverside Public Utilities City of Riverside (.gov) Celebrate Customer Service Week City of Riverside (.gov) Which companies have the best customer service? Amazon, Shein, Costco among top-rated brands USA TODAY Con Edison Proposes Investments to Meet Growing Demand for Clean Energy, Enhance Customer Support T&D World Contact Reverb Support Reverb Charter Names Robyn Tolva Senior Vice President, Customer Service Reliability | Charter Charter Communications America's Best Customer Service 2025 Newsweek 8 strategies for using AI for customer service in 2025 Sprout Social Attorney General Bonta Demands Better Customer Service for Californians California Department of Justice AI for Customer Service Market worth $47.82 Billion by 2030 - Exclusive Report by MarketsandMarkets™ PR Newswire Can artificial intelligence rescue customer service? The Economist Permits–customer services King County Lifeline Support for Affordable Communications Federal Communications Commission Department of Transportation Governor Tom Wolf President Biden Announces New Customer Service Actions, Targets Subscriptions and ‘Doom Loops’ CX Today 11 key elements of excellent customer service Business.com Launch of New Districtwide Customer Service Platform The School District of Philadelphia Shep Hyken, HPU Customer Service Expert, Mentors Students and Staff High Point University Summer EBT | Department of Human Services Governor Tom Wolf Video Quick Take: Intercom’s Brian Donahue on How AI Agents Can Be Your First Tier of Customer Service Support HBR.org Daily How Intercom Achieves 86% Resolution Rates with Claude AI: A Customer Service Revolution - Anthropic |
![]() |
![]() |
![]() |
RELATED ARTICLES
We Got It Wrong: Never Under Promise & Over Deliver You know how it is, you believe something for so long, everyone agrees with you, all the books tell you it's true and then suddenly you have a blinding revelation - we've all been duped! You know like my gorilla mates were? (If you're not sure about my gorilla mates then you really need to read the book - we've got a great offer on at the moment!)And you feel such a chump - how did I ever fall for that - the logic just isn't there - I must have been a fool. Let me explain. Foolproof Customer Service Strategies (That Only A Fool Would Try!) Ever notice how customer service varies from store to store? You walk into some stores, and before you can say "Buzz off!" a salesperson asks "May I help you?""No thanks.""May I help you?" asks another. The Dissatisfied Customer We, as small business people, naturally dislike complaints from our clients and customers. Because we're intimately involved with our home businesses, small businesses, or freelance careers, any complaint takes on a personal commentator. CEM Can Improve Customer Loyalty 'A 5 percent increase in customer retention increases profits by 25 to 95 percent.''The greater the loyalty of customers, employees, suppliers, and shareholders, the greater the profits reaped . Whatever Happened To Customer Service? Do you remember the last time you went into a shop and the person 'serving' raced over to you, greeted you with a lovely smile, heaps of enthusiasm and said, "Welcome to our store, what can I help you with today?" And then listened attentively to what you had to say?Doesn't happen very often does it? In fact, while I was writing this, I couldn't recall when I had experienced it. I'm sure I must have yet it would have been so long ago, I can't remember. Tips for Curing Bad Customer Service Bad customer service is everywhere these days - unmanned front desks, surly servers, clueless staff, employees talking on the phone, and managers who refuse to acknowledge a customer. It's no longer an exception . Complaining Consumers The salesman's job is to be well informed; extremely well informed. For this information is how he earns his bread. Who Says the Customer is Always Right? We all know the old adage, "The Customer is Always Right." If you are an online business owner or offline for that matter, you are on both sides of the subject almost everyday. 4 Tips Toward Overcoming Bad Customer Service Customer service is the pits, you say. You are not alone. Are You Putting Technology Before Your Customers? Which is more important the technology or the customer?The one thing about the online world you can be sure of is change.It seems like every day there is a new technology being addedwhich will make the internet more accessible. E-Business's Best Friend: eCRM From Ebay to the smallest home-operated start-up, e-businesses of all sizes struggle to accurately answer a common question: who are my customers? If you can't answer that question, chances are you're also in the dark about the following questions. What customer demand trends can I expect in the future? How can I improve customer retention? What can I do to build long-term relationships of trust with customers? Knowing the answer to these questions can mean the difference between long-term growth and profitability and crashing and burning. Improving Customer Service Improving customer service starts at the top - with us owners and managers. We need to be living pictures of how we want our staff to treat customers. How To Keep Your Customers Coming Back -- Understanding Customer Retention Why do some businesses offer points, stamps or every tenth coffee for free?These businesses understand that a customer retention program is a fantastic way to ensure that customers keep coming back. The most recognized customer retention programs are those loyalty programs used by retailers, but this same principal can be applied to any business that wishes to maintain a loyal customer base. Dont Be Afraid To Give Problem Customers The Boot Q: In a recent column you made the point that the customer is always right, which I agree with. However, in the same column you also said that it is sometimes necessary give problem customers the boot. Sending Mixed Signals Can Send Your Clients Away I call it the "wave and roll."You walk up to an intersection. Whats The Customer Service Buzz About Your Business? If you're a regular reader of my column you know that my number one pet peeve is bad customer service. Nothing chaps my backside more than paying hard-earned money for a product or service only to have the provider of said product or service become apathetic, obnoxious or just downright rude after the transactional smoke has cleared. Create Win-Win Deals With Your Competitors In the competitive world of the 20th century, we generally viewed competitors as the enemy. And a competitor was anyone who sold to the same target audience as us - even if they sold a different item. We Sell For Less and Our Stores Are a Mess! What kind of image do you present when marketing your products? Are you professional and well organized or does your store/site/whatever scream, "sloppy!," to those who matter the most: your customers? Let's see how one leading retailer is winning the sales war, but losing an important battle: store organization.WalMart is dominant in so many categories with the various products that they sell. Why You Should Always Honour Your Guarantees - Even When The Customer Is In The Wrong The Reason Why Direct Internet Marketers Have To Work So Hard To Earn Our TrustA bad attitude to customer service can literally destroy your business.So, I thought I'd share my response to what I read on an Internet Marketing Forum recently to illustrate my point. Doors by Catering to Your Clients Clients? they are the most important influence in the success of any business. It is vital to keep them satisfied and happy. ![]() |
home | site map |
© 2006 |