The globalization of our economy is an ongoing, unfolding process. To survive, U.S. companies need to regularly refine their strategies for tackling all kinds of challenges and capitalizing on any and all opportunities. This includes outsourcing, a popular strategy for managing non-core business functions, particularly voice-to-voice or online customer service interactions. Contracting with call centers in lower-wage countries was a smart idea because it could cut operating costs while freeing up enterprises to focus on their core competencies. They could become leaner, more flexible, and more capable of innovatively responding to the demands of a swiftly changing marketplace. But now that companies have been doing this for a number of years, we’re learning more about some unanticipated ramifications associated with the practice. And what we’re learning calls for immediate corrective action.
Evidence is mounting that indicates a customer service function outsourced to an offshore or domestic service provider can incur unexpected costs and unwelcome consequences; most notably, diminished customer satisfaction. Even so, outsourcing is still a smart idea. For many enterprises, it’s not just smart – it’s essential for maintaining flexibility and competitive advantage. As such, it’s a strategy in need of refinement.
The situation is similar to our collective experience with new technology. We’re often presented with new technologies that are intended to help us save time, save money, and make our lives easier. But in recent years we’ve discovered that managing the technology itself can use up a lot of time and resources. For example, we’ve realized we spend too much time reading, responding to, filing, and cleaning up emails; figuring out new operating systems; and downloading, uploading, and reloading software updates. So now we’re getting smarter about how we incorporate certain technologies into our lives and businesses. Likewise, we need to get smarter about how we employ providers of outsourced services.
A combination of several factors can help determine whether outsourcing your company’s customer service will be a smart move. Important considerations include:
Depending on the volume of customer service your business handles, it may or may not be profitable to hire an outside company to do it for you. Estimate the cost of creating your own customer service department and compare it with the cost of outsourcing. Be sure to consider all factors, such as employee compensation and training, equipment and supply purchases, construction or rent costs, and maintenance – and as always shop around.
Just because outsourcing customer service will save money doesn’t always mean it won’t cost you money in the long run. If your company regularly takes customer calls on technical or complicated issues, you may be better off keeping customer service in-house to ensure customers are receiving correct, complete answers to their questions. Also, if your departments tend to hand customers off to one another often, that process may be complicated by adding an outside party.
Another element to weigh is how outsourcing customer service will affect your day-to-day operations. In essence, think about who it will free up. Unless customers are calling with detailed questions that require expert answers, your time or that of your employees may be better spent on other projects that lie within their talents. Sales or research and development of new products, for example, can be better investments of your employees’ time in the long run. So while you should attentively examine the costs of outsourcing, don’t forget to include the benefits in your decision.
If customers want service you can’t provide with current resources, it’s a sign that outsourcing customer service may be right for you. Do customers need assistance at times when your staff is not available? Do customers require service at a volume your current staff cannot provide? With outsourcing, you can get the amount of service that fits your company best at the times you need it. Many agencies offer 24/7 support, which may be too costly for some businesses to provide in-house. Whatever your current customer service needs are, it’s best to crunch the numbers and draw up a clear comparison.
If you’re considering a particular call center, find out who some of their clients are and do a test call as a customer asking a question. It’ll give you a real-world look at how your customer’s calls will be handled, and can give you an idea of whether or not you want to engage the company to handle your customer service.
Doing an online search for blogs or forum posts that mention the center’s clients may bring up consumer reviews that can give you further insight into a typical customer service experience.
We’ve all heard someone complain about trying to resolve a problem with a customer service representative they couldn’t communicate with. It’s frustrating for both the customer and the representative when language barriers prevent clear, effective communication. If you choose to outsource customer service based in an area where this may be an issue, investigate this aspect of service by doing a test call to be sure it won’t interfere with service quality.
Another way to maximize the level of customer service when outsourcing is to find vendors that provide incentives to customer service representatives. Some call centers provide tiered bonuses that allow representatives to earn more money per hour, or a bonus, when they exceed goal expectations. Others provide point reward systems that allow employees to cash in points they have earned in exchange for prizes. Any fun, competitive contest can help revitalize a customer service floor and encourage them to meet metrics. You may be amazed at how productivity can increase from some friendly competition.
Many companies set up a system that records some calls or all calls. The calls can then be reviewed on a regular basis. Monitoring calls allows you to give representatives feedback on their service. If the system records all calls, they can also be accessed to help with resolving escalated customer service issues or for legal reasons. Just knowing that a call may be recorded goes a long way toward encouraging call center employees to provide excellent service.
Business process outsourcing means the management of a specific marketing function, such as database management, leads generation, or telemarketing, using either internal or outsourced technology. For example, a call center company that handles your telemarketing is a business process outsourcer. The distinction is useful, and, of note, some vendors provide both services.
Your target market is looking for you – even if they don’t know it yet. In order to help them find you, you need to understand who would be interested in your product or services. We sometimes hear our clients say they have no idea who will buy from them, or they assume that ‘everyone’ will be interested. Assumptions like this can lead to the wrong marketing strategy.
While it is possible that a random person might come along and buy your product, it’s even more likely that someone who was targeted because there is some common ground between themselves and your product or service, would buy your product.
The task then becomes determining, as closely as possible, exactly who those people are, and ‘targeting’ your business’s marketing efforts toward them.
In order to find strong leads, you need to determine what or who defines those who would be most interested in your products or services. This might sound like a simple or perhaps insignificant question at first but it can possibly make or break the success of your sales if you don’t give it some serious thought.
Think about the following and consider the selections that you think might be interested in your products or services. Don’t rule out any group completely. Think about each Select and how they might apply.
Getting access to an integrated, technology-rich set of marketing applications can be an expensive exercise. A better solution is often to outsource specific marketing functions to specialists who use leading-edge technology. In the long run, this works most effectively when the marketing staff has direct access to the technology so they can develop their skills accordingly. When the staff is sufficiently experienced, deploying new applications internally or subscribing to them on demand can become a simple financial decision.
How much do you know about your customers? If you’re like most businesses the answer is “not enough,” according to Alan Trefler, the founder and CEO of business software provider Pegasystems and author of Build for Change. Trefler is on a one-man mission to get businesses to stop collecting data and make better use of the data they already have.
“Data only tells you who the customers are and what they did in the past,” he says. In order for data to be useful, you need to understand customer intent–on why they do or don’t buy from you. And for that, he says, you likely already have all the data you need.
One big mistake many business leaders make is to draw conclusions based on correlations alone. That is, if you put an ad in the local paper and sales went up, it may be because of the ad. But it could also be that your product is one that’s most used in fall, and the change in weather brought customers to you. Without understanding customer intent, correlations can lead you astray. “The divorce rate is nearly perfectly correlated with consumption of margarine,” he notes.
To get the best information out of your data, he says, follow these three steps:
Who, in general terms, are your customers? Are they suburban dads who tinker on the weekends? Career-driven mothers? High-school athletes? Perhaps all three?
Your customer base can’t be everyone, so Trefler recommends creating “personas”–hypothetical characters who represent a typical customer for you. “See if you can group your entire customer base into five or six fictional people,” Trefler says. “Tom, the weekend athlete business man. Sue, the super-aggressive executive. For each of these, envision an actual made-up person, like a character in a play. What types of things would drive that person to make a purchasing decision? What things would they find insulting or demeaning?”
This is a thought exercise you should be continually revising, he says. Just as important–are there personas who aren’t buying from you, but should be?
Once you’ve created your personas, make some educated guesses about how each one is likely to react to different things you might try. For instance, if one of your personas lives in the suburbs and commutes to work, you might think that radio advertising during morning and evening drive times is an effective way to reach that person. If another persona is very focused on family, then tying your marketing efforts to holidays might be a smart approach.
Begin by comparing your hypothesis against existing data. You likely have detailed sales records and know which times you did better and worse. You also should have detailed records of promotions you tried and what advertising you ran when. You should know when you adjusted prices up or down and what impact that had on sales. “Most small companies do have a lot of data at their disposal,” Trefler says. “It’s important to tie that data to what you’re trying to accomplish.”
Next, test your hypothesis in the real world. Does your data suggest that a slight price drop will lead to a sharp sales upturn? Then try dropping prices in a limited-time offer without changing anything else, and see if that idea holds true. If it does, you’ve learned a valuable lesson about how price-sensitive your market is.
The more you create and test hypotheses this way, the better you’ll understand your customers and how to reach them, Trefler says. And you can get to a pretty sophisticated understanding of your market without using any analysis tool beyond a simple spreadsheet, he adds.
“The big mistake most companies make is they focus on data without first forming a hypothesis,” he says. “You need a different way of thinking.”
Many new business owners don’t know how to determine their unique selling point. Either that or they’re suffering from the results of not having one. They’re getting lost in the crowd and dying a slow death because they aren’t able to attract enough customers to support their business.
If your customers aren’t happy, you aren’t happy. Your goal is to ensure customers are completely satisfied with your products and services, and that includes all aspects of customer service, including before, during and after the sale. In order to ensure you have the maximum customer satisfaction rates, you need to be certain that anyone dealing with your customers or potential customers has undergone extensive training so he or she can adequately represent your company and its services or products. Outsourcing customer service can have its financial advantages, but if you are not attaining a high level of customer satisfaction and gaining new sales, you are not maximizing your investment.