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The Green Sheet Online Edition

May 24, 2010 • Issue 10:05:02

Outsourcing customer support? Think again

By Nicholas Cucci
Network Merchants Inc.

Everyone agrees that great service is essential for long-term customer retention. Consumers today are enjoying more choice than ever before. Many companies are, however, wrestling with the idea of outsourcing customer support.

From a cost perspective it appears to make sense: on average, it costs about $11 per hour to outsource customer service versus $30 per hour to run a call center in the United States.

But many companies tend to forget why it's so much cheaper to outsource. Could it be outsourced workers receive less training? Lower pay? Both? Less training means only one thing: customer service representatives are not fully equipped to answer questions. Paying an employee less is also a motivation restrictor.

The only real difference in cost incurred by going overseas is that it might not affect your pocket right away.

Why outsource?

Five top reasons companies cite for outsourcing are to:

    1. Reduce operating costs
    2. Make capital funds available
    3. Increase company focus on core competencies
    4. Free resources for other purposes
    5. Get a cash infusion

Outsourcing pros and cons

To run your own call center, you must purchase and correctly set up phone switches, as well as worry about delays your customers may encounter while on the phone with the call center. Don't forget that U.S. consumers are used to having their voices travel at the speed of light; they consider delays on phone calls, even those that last less than a second, unacceptable.

Call centers outside of the United States are less focused on getting to the bottom of the situation at hand and more concerned about call times and abandon rates. In the United States, we are more inclined to talk as long as necessary to solve a problem, and we know a little small talk never hurts. The customer becomes comfortable, and this enhances the support staff's rapport with the company's customer base.

This difference in priorities is the crux of the problem with outsourcing tasks to other countries. Shorter calls don't necessarily mean happy customers.

Call centers overseas also do not have the resources to answer every single question. They often are not in proximity to the technical team and thus cannot easily contribute to resolving certain issues. This can cause minor difficulties to escalate into major, unresolved issues. The no-brainer in cost savings is greatly reduced by diminished customer satisfaction.

What's at risk?

Companies work hard to satisfy their customers, but many do not realize that customer support is their Achilles heel. Customers will, without question, pull out of a business when they have been misguided or dismissed by support staff.

You will absolutely see a decline in business if you outsource your support. You will have frustrated customers, reduced sales and an increased number of cancellations.

Alternatively, the fastest way to expand your business is through effective communication. The spoken word is so powerful that, most of the time, a company's performance hinges on the quality of its customer support team.

How many times have you heard from a friend that a certain company is great? Perhaps the company exchanged a product or refunded the purchase price without question or fixed something broken at no cost and without delay. Statistically, people are more likely to remember something positive; however, one bad experience can permanently ruin any future business with whatever company it occurred.

Excellent service is the key to running a thriving enterprise. When a company's support team fails to hold up their end, the company's foundation begins to crumble. And the second a business loses the credibility it worked so hard to establish, it comes to a screeching halt.

Before you contemplate outsourcing, make sure you realize the potential risks. Is it worth losing your entire customer base? Do you really want to turn away your repeat customers? The Green Sheet, Inc.

Nicholas Cucci is the Marketing Director for Network Merchants Inc. He is a graduate of Benedictine University. Prior to joining NMI, Mr. Cucci worked in the payment processing division for a Fortune 500 company and has advised several large retailers on credit card fraud protection, screening and risk assessment. He can be reached at ncucci@nmi.com or 800-617-4850.

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