Customer service outsourcing
How to evaluate if you should outsource
|"We are a $15 million
business that sells through a network of dealers.
Our dealers are our customers
though they do not use our products. All our
competitors outsource their customer service and we are
now feeling the pressure to do the same. How
should we evaluate if it is a good idea for us to
outsource our customer service?"
Outsourcing is a
way of life if you do business in America. I personally
support outsourcing of anything that is not core to your
business. For instance, I see no reason for a business to
manage its payroll or 401(K) plan or a range of other
business processes that can be more cost-effectively done by
someone else. I do, however, have a serious objection to
outsourcing of customer service for the following five reasons:
Customers are your biggest assets. If
you lose your customers, you have nothing left.
In today's information-rich economy, most
customers can find a substitute supplier in literally no
time. If you treat them well (through customer
service that delights) your chances of customer retention
Excellent customer service is the subject of
stories in the business world. So use it to generate
word-of-mouth marketing for your business.
Business process outsourcing (BPO) providers,
no matter how good they are, cannot do what you can do for
your customers (which in your case are the dealers whether
they are end-users or not). Even if you put incentives
and metrics into the agreement, there is nothing like your own
employees doing it.
Customers do not like it when they are
talking to a third party rather than you. Once they find
out they are always disappointed. (Related:
understand why you would want to do this, but have you
thought of other alternatives:
Relocating your office to a less
expensive location. If you want to take advantage
of offshoring, then set up your own subsidiary rather
than rely on a local outfit
the web to provide as many as services as you can
(e.g. online account management)
Limiting the hours in which you provide
service and the number of employees that you have in
your customer service group (customers are likely to be
more receptive to excellent service on a limited basis
than shoddy service 24X7)
Transferring some of the customer
service functions to salespeople and account managers
Many BPO outfits
have convinced business leaders in corporate America that customer
service is not core to a company's business. I totally
disagree. If you cannot and do not want to serve your
customers by using your own team of dedicated and committed
employees, you should not be in business. I am even opposed
to hiring telemarketers for outbound calls (howsoever you might
hate doing it yourself) because when a potential customer receives
the first introduction, it better be a pleasant experience because
not only will s/he not do business with you, s/he might be
motivated to say bad things about you to others. Your brand
is at stake here.
Are there circumstances in which you can
outsource customer service?
If the answer to
any of the following questions is Yes, it is somewhat acceptable
to consider outsourcing, though I still continue to believe that
you should explore other options first:
- Do your customers buy on price alone?
- Does your product meet the criteria of a 'commodity'?
- Do you have millions of customers with an
extremely high churn rate (e.g. long distance phone service)?
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questions, feedback, and suggestions