Bringing Call Centers Home: The Business Case for Onshoring
Posted: 07/13/2009 12:00:00 AM EDT | 9
The call center industry has transformed and evolved over the last decade, away from the focus on customer service and customer satisfaction, to bottom line revenue and outsourced services. Not surprisingly, we have seen steep declines in customer satisfaction and loyalty, and a significant increase in call center employee churn. This obsessive focus on the bottom line has led to many large companies going offshore for call center customer service and technical support, with other companies playing “follow the leader”. The result, overall call center customer satisfaction has declined significantly.
Customer Relationships: The Lifeblood of Call Centers and Ultimately of all Companies
A poll by Opinion Research indicates 69 percent of Americans are less likely to do business with a company after one bad call center experience. Yet, according to a 2007 Aspect Index report, customers are 33 percent more likely to do more business with a company after a positive call center customer experience.
So, while everyone understands how important satisfied customers are and how powerful extremely satisfied customers are, many U.S. companies have shipped this responsibility to the lowest cost provider, often an overseas call center with low wage, under-trained workers. In the rush to commoditize services, the call center industry has taken the relationship with the customer—your customer, your company’s “crown jewels”—and overshadowed your customer’s support and service satisfaction by considerations solely for bottom line.
Offshoring call center services fail to tell the whole story—no one mentions customer satisfaction plummets due to the inability to deliver call center service that fulfills the expectations of an American customer. This has led to a loss of customer satisfaction and customer retention for many companies.
In Outsourcing Call Centers We Have Outsourced Our Most Important Person in Today’s Economy: The Customer!
The 21st Century needs a new call center model to transform the industry, focused on the customer, not the cost of doing business with that customer. The call center industry needs to look at the value, not simply the cost of call center services with the ultimate goal: to provide extreme customer satisfaction, which will yield an enthusiastic customer who will, in turn, stimulate strong word-of-mouth loyalty, which ultimately leads to higher revenues.
Yes, cost is key and some call center outsourcing can help save costs, but the siren call of the bottom line obscures the high risk of customer dissatisfaction, which is inevitable due to language barriers, extended length of calls, comprehension issues, Plus there is a lack of cultural context. This lack of language comprehension and cultural awareness kills call center productivity. The net effect of extended calls is a call center productivity decline of 39 to 105 percent.
In addition, many of the behaviors that Americans intuitively expect from call center representatives are literally and figuratively foreign to international representatives. Representatives need to be able to empathize with customers and respond in a culturally appropriate manner. It is reported that problems with comprehension occur in an average of 18 percent of offshore calls (about one in five calls), which is a prime cause of customer frustration.
Offshore Call Center Support and Service is the Life Time Value (LTV) of a Loyal Customer and Customer Retention
Whether it’s a loss of customers due to the fact they reached a foreign country for call center service and immediately hung up, or a customer who had a bad call center experience, current call center industry practices are causing an increase in costs to retain existing customers and gain new customers—to convert prospects!
We have to recognize that not delivering on the promise of extreme customer satisfaction not only inhibits a company’s word of mouth references, but can also destroy a company. An individual’s campaigns against a company, either face-to-face with family and friends or via social media, allows that story to be told again and again and again, and a company is unable to remove or control these negative references.
The key is not just reducing call center costs, but improving overall return on investment (ROI) of the customer experience. at the call center. It’s not about how quickly are calls answered or first call resolution. A real call center partner should understand the traditional variables, but also recognizes the value of an extremely satisfied customer. This means call center managers must understand what it takes to satisfy a customer’s needs. The call center manager must develop a long-term relationship with the customer to continue to evaluate, recognize and support the customer’s ongoing needs—to build a relationship with the customer that transcends a single call center interaction.
The call center industry must look at offering their services as solutions providers, not body shops. We must understand each client’s specific objectives and the service and support needs of our client’s customers. The only way to meet these objectives and provide extreme customer satisfaction at call centers, is to evaluate the processes and procedures of every touch point of customer contact. We must then determine how to support and implement call center services that positively affect these specific areas, so the client’s customers receive excellent support and service.
Re-Evaluate and Re-Invent the Call Center Industry to Make the Customer Number One
The new call center market is based on three things: the innovative use of technology, a closely knit partnership between the outsource organization and the company it supports, and a unique workforce model.
For the call center industry to be successful, we must design and implement support systems that use state-of-the-art hosted on-demand technologies. Call center managers must solve customer service and technical support issues with the appropriate technology that achieves the best results, whether voice, e-mail, chat and allows the call center and remote representatives to be closely integrated and monitored, ensuring the highest level of customer satisfaction.
Call center managers must develop and implement a strategic workforce management model, which uses “natural human resources” available in America such as students, retirees, stay-at-home parents, special needs individuals and veterans. We must take responsibility to not only look at the bottom line, but to provide education, training and call center jobs in the United States.
The Call Center Industry Must Change
The call center industry must elevate customer service and technical support so people are satisfied by the contact, not matter what form. We must deliver a customer experience that responds to the people’s expectations so they are do not dread their call center experience. We must provide call center services that respond appropriately to the cultural context of the customers.
Providing call center services that respond appropriately to the cultural context of the customers will turn customers into loyal followers, and even evangelists, because the experience will align with the customer’s values. For the companies who employ the new call center model, increased customer satisfaction will help attract and retain customers, develop customer loyalty and through the “value-added experience,” feed the emotion of the customer, which has far-reaching benefits.
The call center industry must demonstrate that onshore call center services that are cost effective and price competitive. We need to deliver exceptional expected services that are culturally appropriate, work with our customers to define the most appropriate response to their customers’ needs and deliver extreme customer satisfaction, better than is currently provided.
We must re-invent the call center industry to meet our customer’s expectations. We must bring call center services careers back to America to perform customer support more effectively, so as not to waste a customer’s most important resource: time.
First published on Customer Management IQ.
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Joe...I like your emphasis on customer satisfaction more than just being cost centric. However I beg to differ from the fact that only if you onshore customer service will improve. We can debate in length but offshoring locations like India are known for Technical resolution ability, researching skills, flexibility in working hours etc. While to do with pure customer service, upsell processes Philippines is looked upon as people are very customer centric there.
I do agree to your point in rightly saying that the system requires more maturity to make the customer happy and we may have to work on a global shoring model. Leverage strengths in each of the BRIC and other developing nations + see how high skilled work like L2 or L3 escalations can be maintained back in the USA to get customers confidence.
Let's not mix a lot of stuff in this topic, is customer satisfaction the topic or getting jobs back to America?...both cannot be clubbed. While there are differences in culture etc. we need to be open minded beyond the emotional quotient " oh I lost my job" and look for ways of improving customer service by bringing in the blend of several models together.
If America is ready to take the wages that are provided in offshore (which are more than 10 times lower) and provide better customer service levels then I can assure you that onshoring is possible 100%.
Joe, great read. I wrote an article about this, but from a different slant based on experiences I had with offshore contact centers. Your business case speaks directly to me as a consumer and as a person in the customer experience space. Thank you for sharing.
You can read my article here if you get a moment: http://riverstar.com/blog/id/3042/do-americans-prefer-american-call-center-agents.
Joe, you may want to add that you were a pioneer regarding the "core logic" of collocation international call center support. You had provided this featured service to your clients over a decade ago and at the present time echoing the same resounding message that international call center support and customer satisfaction can be and always has been cost effective in America. The business of providing state of the art networking to your clients and their customers has always been your forte. It is great to see the movement of on-shoring coming full circle.
I love the energy around this topic and am more pleased that its being discussed. I've felt that Outsourcers have taken their eye off the ball and focused on bringing down prices instead of finding ways of improving customer support, which has led to an increase in Top Brands bringing call centers in house. The reality is offshoring is a huge part of the decline in Cust Sat when compared with customers dealing with local/onshore call center reps. The Customer Sat Gap of Offshore vs Onshore is 59:75 for Phone-based transactions (CCSI ‘08).Outsourcers utilize best in class technology, in market contact center reps and take a passionate view about exceeding their Customers "Customer Sat goals" not just saving them a few bucks.
Joe, your comments are right on target relative to results companies are realizing from outsourcing their “most important person”, the customer. In reading and assessing your article, one has to consider the role management is faced with in business today and over the last 20 years. It about now, not last year, or two years ago or what the future holds. C level executives are driven to make short term and narrow decisions to increase revenue and/or reduce expenses to hit the numbers. In large to medium size companies, public and private, these micro decisions work for awhile on the surface but the impact as stated in your article is massive from a macro and long term perspective. What is the answer? Management must be given time to make wise decisions not knee jerk reaction decisions. Consider executive from Japan, China and other countries who management has 5 – 6 years to develop, implement, modify and assess the results of programs and projects. In America, they may have changed CEO’s two times in the aforementioned time frame.
I am convince America is still the most technologically advanced, creative with well trained leaders and managers, but executive management can no longer put a bandage over a wound gushing lost dollars and customers. Who will stand up and be a pioneer and realize increased revenue and savings from providing the customer experience customers are demanding? The technology and processes are available now and the time horizon to assess impact and results take only 12 – 15 months.
Regarding the case forbBringing callcCenters home to the US, I attended the Call Center week conference and had the opportunity to speak with Mr.Jacoboni at length. As Chief Operating Officer of
Prosperity America Inc we are also a leading proponent of capturing previously outsourced call center jobs and filling those positions with American Veterans, Disabled Veterans and their dependents. We applaud Mr. Jacoboni's efforts and the position he has taken on this issue. His recent comments echo those of our CEO Fred Landrum’s comments during his April 29th press conferences.
Prosperity America Inc. differs from Contact Centers of America in that CSA primarily focuses on developing its work force by integrating itself with colleges, its primary source of employees whereas Prosperity America's primary goal is to hire veterans, particularly Iraq and Afghanistan veterans both discharged and/or disabled as well as dependents of active duty personnel and the communities that support them.
However, as CSA, Prosperity America Inc. also believes that it is the mission of everyone in the call center space, customers and operators alike, to review the validity of price based call center purchase decisions.
Regardless of our differences, the central point that both Prosperity America and CSA are making is that well qualified American citizens' offer cultural and life experiences that cannot be duplicated by workers in countries like India, Romania and the Philippines.
I believe that for those Companies that value their customers experience and count on customer loyalty for their continued success, should be putting American call center representatives on the phone with American consumers offers the best way to deliver a high quality consumer experience and provides the greatest likelihood of retaining that consumer as a repeat customer.
COO Prosperity America Inc.
Prosperity America, Inc is a broad based teleservices and call center company whose founders are experienced executives with deep service industry backgrounds. Our company is concerned that the BPO and Teleservices space is not being used to support and develop productive jobs for our own citizens. Rather, tens of thousands of jobs are being migrated to places like India, the Philippines, the Caribbean and elsewhere. We strive to make a difference in a real and quantifiable way. The company believes that the call center industry is an ideal medium for developing, implementing and bringing this vision to fulfillment.
This is the economic climate to which thousands of our service people, some disabled in the wars Iraq and Afghanistan are returning. Is it fair that those who have served unflinchingly are subjected to the most difficult employment environment in more than half a century?
For more information about our company and the mission it is dedicated to fulfilling go to: www.prosperityamerica.us.com.
Lot's of good information and thoughts Joe. I agree that our pursuit of cost reduction and contact elimination has greatly damaged customer satisfaction, trust and loyalty. It has turned outsourcing into a commodity and the customer experience into a frustrating game of searching for a connection and an answer. The brand damage is huge. There is a technology solution I am working with, SatMap, that seeks to optimize the customer-agent interaction by matching the right caller to the right agent through a deep analysis of demographics, psychographics and performance history. This neural-network adaptive learning technology is currently delivering superior results for Fortune 500 customers in Financial Services, Telecommunications, Insurance and Travel/Hospitality. I believe it's a game changer and could be the key to a return in customer centricity.
As much as I support the idea of improving the customer experience, I do not know if bringing back "home" call centers is the solution. First of all your argumentation with regard to customer satisfaction does not seem to be in line with the facts. Please take a look at ACSI score-development over the past 5 years: http://www.theacsi.org/index.php?option=com_content&task=view&id=31&Itemid=35
As you can see, after a serious drop in the years 2004 -2005, scores have gone up again and are now at the highest level since '94.
It might make sense to analyze in depth per industry or even company that has off-shored customer services to sustain your argument (or not).
My take for now: There might be some (temporary) sentimental gains through back-shoring, but what is truly needed is a different approach towards managing customer services.
Customer Services / call center management needs to shift from a cost-centered to a customer-centered approach.
Before companies decide to start back-shoring based on "made in the USA" sentiments, it would be better for them to take a close look how their own management approach has affected the customer experience. My bet is that changing the management approach will have better leverage in the short and mid-term on customer satisfaction and loyalty than back-shoring call centers whilst maintaining a cost-centered focus.