The debate about whether or not outsourcing call center services offshore is an effective way to conduct business, has been raging on for quite some time, with prominent companies following whichever school of thought they find best suited to their organization.
Offshore outsourcing means the company hires a call center located outside its country to take care of customer services and conduct all telemarketing campaigns. Companies can either outsource a section of their call center operations (such as sales, support, marketing, etc.) or the entirety of operations to this external call center.
The external service provider would then be responsible for employing call center software to determine telemarketing strategies, managing infrastructure for customer service, and training of call center agents in specific skills and in day to day operations independently.
It is often seen that companies choose to not interfere much in the activities of offshore call centers; giving them autonomy to do what they believe is best for the customer service wing of that company.
Many a times, companies decide to outsource their customer service operations to bring down costs. Opting for countries with cheaper skilled labor, more workforce and lesser pay requirements means the organization can cut costs efficiently.
However, it is also very important to consider the quality of service that can be assured at this lower cost. If the quality is at par with industry requirements, outsourcing can turn out to be a great deal.
If not, however, companies could find themselves in trouble for putting the interests of quick profits above loyal customers. This trade-off has no absolutely right or wrong choice, which is why companies need to carefully consider their own unique situations before taking a call.
“The true mark of a leader is the willingness to stick with a bold course of action — an unconventional business strategy, a unique product-development roadmap, a controversial marketing campaign — even as the rest of the world wonders why you’re not marching in a step with the status quo.
In other words, real leaders are happy to zig while others zag. They understand that in an era of hyper-competition and non-stop disruption, the only way to stand out from the crowd is to stand for something special”, says Bill Taylor in his article, “Do You Pass the Leadership Test?”
While leaders are borne out of bold, unconventional decisions, a leader must also clearly foresee the consequences of a move. Right choices come from studying data and understanding the market.
In this article, we will highlight some of the advantages and disadvantages of opting for outsourcing offshore call centers. We will also take a look at which method is most suitable for different organizations, and whether a combination can be achieved to provide best performance or not.
Advantages of Call Center Outsourcing
1. Reduction of costs: As it has been mentioned before, outsourcing allows you to obtain the effort at a fraction of the cost. Companies that have opted extensively to work with external service providers have seen their operational costs go down by a very significant margin.
This can have a real impact on the savings accrued by the company on a periodic basis. In addition, the money that is saved from outsourcing call center duties can be implemented in other avenues such as research and development or personnel training to bring about even better productivity.
2. Handling higher call volumes during peak times: It can prove difficult for a company to come up with enough resources to tackle inbound volume of calls during peak business hours.
Even with all of its customer service personnel handling calls, the company’s productivity takes a hit if people who would contribute better in other areas have to spend their time on the phone to ensure quality customer service.
In this area, dedicating an entire offshore call center simply to remain by the phone not only ensures that customers are not placed in queue or their queries are not abandoned, but also that the company can now fully employ its resources to work within its walls to increase productivity.
3. Monitoring is enhanced and compartmentalized: An offshore call center, while enjoying autonomy of operations, has to send reports back to its parent company every once in awhile, usually on a monthly basis.
The parent company can judge its performance on the basis of this report outlining its key performance indicators, and can then clearly understand exactly what is being done right, and what is being done wrong.
This sort of monitoring allows the company to give clear directives to its call center as and when required, so that operations are carried out in a manner that is best suited to the company, without the company actually having to chalk that plan out from scratch.
4. 24*7 support: Typically, the enterprises that have the need for offshore service providers are the ones that cater to thousands of customers across the globe.
With such a varied customer base, comes the need to be available for clarifications and support regardless of difference in time zones, volume of calls, etc.
This is where companies find it impossible to be available on call 24 hours of every day, which is why they outsource these elements to call centers where agents are available on call in different shifts so that there are people manning the phones at all times.
5. Focus on core business principles: Customer service is definitely a valuable aspect of business that needs to be nurtured for the business to grow. However, the USP of any business is its core product, which requires continuous maintenance, development and evaluation.
The company would want all its recruited members to be dedicated towards working for an improved product all the time, so having to employ qualified people for customer service is a toll on the company as a whole.
Outsourcing customer service allows the business to dedicate its entire energy and attention towards its core business principles, which leads to further advancements in its core product.
Disadvantages of Call Center Outsourcing
1. Quality of customer service: While costs are likely to go down when call center operations are outsourced, there is also a very high possibility that the quality of customer service being provided may not be up to standards.
There has to be a reason for the costs to be low, and often that reason is insufficient domain knowledge or skills on the part of the employees to provide the level of customer service that an organization of that stature demands.
2. Language barriers: Agents located in a different part of the world will likely struggle to identify with the customer’s cultural significance.
They may lack the fluency in English, or whichever language of business is adopted by the organization, to effectively communicate with the client.
There have been cases where the accents of offshore customer service agents have been difficult to interpret for the customer who expects to be communicating with a person of the country the company is from.
While this is nobody’s fault, it does happen to be a significant barrier to effective communication, and it is an almost inevitable byproduct of outsourcing customer service to cheaper locations.
3. Focus of the call center employees may be divided. The call center that carries out telemarketing for your company could also be on the roster of other organizations.
Thus, it is dedicated to carrying out customer service for more than one company, and has to adopt the best selling procedures of each company depending on which customer he or she is communicating with.
Their attention is bound to be divided and they cannot be expected to be completely dedicated to the cause of your company alone.
4. Security concerns. There is no guarantee that overseas call center agents are legally held to the same levels of liability or have stringent background checks done on them, so the customer may inadvertently be exposing sensitive information trusting the company to keep it confidential, whereas this information is far less secure with local agents in parts of the world where security is not absolutely top-level yet.
This is a major threat to the trust that customers have on the company they have invested in.
5. Hidden costs. The obvious estimate is that costs are lower with shipping your customer service offshore. However, there are costs associated with possibilities of legal issues in that country, lawyers versed in international law, loss of customers due to poorer customer service and the employing tactics to regain those customers, etc.
These costs often go unnoticed in broad decisions, but have a real impact on the company’s finances as a whole.
The Case Study
We have seen various pros and cons of outsourcing customer service. To counter some of these problems, call center software solutions have been created as applications that can allow you to access a global pool of call center employees working remotely for your organization, rather than grant a select pool of local employees to manage all operations.
We will see how this can bring about an impact in a case study of the firm AlphaTech solutions, which faced problems with outsourcing its customer service operations, but found the costs to be minimal and agreeable to the company policy.
The Problem Scenario
The firm had decided to outsource its call center operations to a different country so as to bring down the costs associated with managing telemarketing services onshore.
The costs were lessened, but there were complaints from customers regarding quality of service, inability to understand the call center employees’ accents, lack of proper explanations, etc.
They were looking for a way they could change their customer service operations without having to take it on in-house directly.
Some of the challenges that the company faced are listed below.
1. Customers found it difficult to understand the accent of the employees they were interacting with, and this led to a significant decrease in the level of customer satisfaction.
2. The agents charged with inbound services lacked the type of domain knowledge that is necessary to answer the clarifications from customers of such a large organization.
As a result, many people were finding it difficult to get their doubts cleared regarding a specific product or service.
3. Call center solutions were being compromised because clients were skeptic about the security and privacy of their data.
They did not trust the local call center employees with their sensitive information, and therefore it was very hard for the company to effectively understand on how to improve its services.
The managers at AlphaTech recognized that the operational procedure needed to change, as they were losing clients and this was hampering their business. They drew up the following solutions to counter the problems they faced.
1. They decided to invest in the best call center software that would let them recruit people globally who could work from home, rather than restricting their offshore employees to any specific place.
2. Because they had a wide range of applicants to choose from, the company could filter only those who matched their cultural identifications best, the ones most proficient in speaking with a mild or negligible accent, etc.
3. Keeping track of the performance of the call center agents was easier and more effective because data was being produced and displayed in a real time. Employees could also take decisions according to the trends projected by this data, to further benefit business.
Dependence on software greatly improved performance of the firm as well as brought together a pool of agents best suited to carry the company’s baton of customer service forward.
Customer satisfaction levels increased, client retention was at an all-time high and sales went up 4.5% compared to the previous year, all within a year of using the online call center software.
Thus we see how outsourcing can affect customer service, and in turn, customer satisfaction.
While outsourcing call center services offshore is a necessary reality for almost every big organization, we have seen here how the implementation of software and technology can help to find the best men for the job, and direct agents to work in the most effective manner to boost productivity.