Offshoring, Outsourcing and Consumer Perceptions: American Agents are the Clear Choice

In the course of my business I speak to a few hundred contact center executives every year. One of the topics that seems to come up frequently is their offshore contact center outsourcing successes, failures and strategies.

Overall, outsourcing contacts to foreign countries is often perceived to be a necessary evil for a company wanting to be competitive in the global market. Consumers are demanding lower prices, shareholders are demanding more profits, and customer service often finds itself in the middle, getting the financial squeeze.

What I hear from business associates who offshore some or all of their contacts is that they feel the quality has improved over the past few years, but that prices are starting to rise. Also, consumers still have a negative opinion of offshored contact centers. If costs were comparable, many contact center executives have told me that they would instantly bring the jobs back.

The sense that offshoring customer contact is less than ideal comes through loud and clear in these interactions, but people are hesitant to act without more information. The costs of customer acquisition versus the loss of a percentage of customers due to offshoring contact centers is not currently measured in most organizations. Could this metric be the tipping point to bring the calls back onshore?

WHAT CUSTOMERS REALLY THINK ABOUT OFFSHORED CONTACT CENTERS

A Purdue University study found that some 65 percent of consumers would change their buying behavior if they learned that a company with which they were doing business used an offshore call center, even if they were satisfied with its customer service.

The study, conducted by Purdue’s Center for Customer- Driven Quality, showed that the “vast majority” of consumers believed their telephone contacts were handled by domestic call centers. The survey of 721 U.S. consumers had an error rate of plus or minus 4 percent.

According to the 2012 Contact Center Satisfaction Index (CFI Group 2010) customer frustration with offshore centers yields poor scores across the board.

When rating their overall satisfaction, customers rated onshore centers significantly higher than those of their counterparts offshore.

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OFFSHORING HAS AN IMAGE PROBLEM

Let’s look at the reasons why customers are expressing dissatisfaction and frustration with offshored contact centers, even after many years in operation.

CUSTOMER EFFORT MATTERS, EVEN WHEN THINGS TURN OUT WELL

The first reason is mechanical—customers simply report having a difficult time understanding offshore agents, a communication problem that leads to ineffective and inefficient interactions and process. Even when it works out—in interactions in which the outcome is the exact same with an onshore versus an offshore agent—the perception of service is consistently lower for offshore agents. At a basic level, interacting with an unfamiliar dialect is more challenging to people and requires them to work a little harder to both take in information and make themselves understood, particularly among older people or people with reduced hearing or lack of exposure to new dialects. On the face of it, this is just another way that organizations set themselves up for high or low Customer Effort Scores.

Customer Effort Scores or CES developed as a customer service concept from research published in the Harvard Business Review in 2010, and they’re based on the idea that when customers have to expend more effort than they expect, they leave. In regards to offshoring customer contact, it follows that even well-managed obstacles—centers that employ very highly-skilled English speakers—are still obstacles and increase the amount of effort a customer must expend to complete a task.

POLITICS, ECONOMICS, AND PERCEPTION

The second reason why customers are dissatisfied or frustrated with offshored contact centers is less tangible, but still very real. The combination of economic insecurity and high unemployment often leads to insular thinking—a kind of circle-the-wagons mentality. As United Nations High Commissioner for Refugees and former Prime Minister of Portugal Antonio Guterres said, “In my experience as a politician, I’d say that when things go wrong in a country, there are two potential targets: one is the government, the other is the foreigners.”

The 2008-2009 Great Recession led to many Americans being out of work, while companies were outsourcing jobs offshore to save money. Consumers saw offshoring as fundamentally anti-American and expressed themselves through social media, mainstream media, and most importantly through their wallets. Consumers started moving away from companies that outsourced jobs out of America and the “Made in America” mantra expanded to include “Served by America.” Even several years into economic recovery, there remain many Americans who are unemployed or underemployed, and the “Buy American” idea is as strong as ever.

OFFSHORED CALL PERCENTAGE ON THE DECLINE

Consumer perception of service has a direct effect on the brand strength. Because of this, many American organizations are seeing value in bringing contact center jobs back to America. In fact, the percentage of calls being outsourced to foreign countries has decreased consistently over the past few years across almost every industry.

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So what to do? If customers are important to you (which I believe they are) can you afford to lose customers to real communication or perceived political problems? Simultaneously, you and every contact center professional is being pushed by your customers to provide better service, and pushed by your shareholders and stakeholders to bring down costs.

ONSHORING AGENTS AT HOME

One solution many organizations are looking to is an at-home agent workforce. With advances in technology including VOIP and SIP, stronger security measures, and an increase in the popularity and viability of remote workforces, more agents than ever support customer interactions from their own homes.

Through the use of an at-home workforce companies are:

  • Realizing true cost savings through reduced facility costs (square footage, utilities, furniture and other infrastructure).
  • Experiencing a more flexible workforce that will work odd schedules and be available to log in when call volumes spike unexpectedly.
  • Attracting top talent regardless of geographic location, thus improving the caliber of agents supporting their customers.
  • Experiencing reduced tardiness and absenteeism. No longer do you have people calling in when the weather turns bad, or when their car breaks down, or who come in late because of traffic jams. Your agents have a one minute walk from the living room to the office.
  • Enjoying reduced attrition. At home agents have attrition rates that are significantly lower than those of brick-and-mortar contact centers. Some believe this is due to the lack of interpersonal issues, complicated group dynamics or negativity that might be spread by other workers, in addition to the improved flexibility of scheduling and lack of commute.

Remote workforces are on everybody’s mind—and some companies’ strategic plans

At-home solutions are not for everyone, but according to a recent study 49% of all survey respondents said they either currently had an at home workforce or were considering it for 2014.

An at-home workforce is not the answer for everyone, but for those that are able to modify processes, it is a potential solution that could result in higher customer satisfaction, lower customer attrition and decreased costs from brick-and-mortar contact centers, thus making your customers happy and your shareholders happy. Wow, what more could we ask for?

Eric Berg is the Vice-President of All-Calls Call Center Services and a founding member of the Midwest Contact Center Association. Eric has over 20 years’ experience in the contact center consulting, outsourcing and staffing industries and is a frequent speaker at contact center industry events. Eric can be reached on LinkedIn at https://www.linkedin.com/in/ericberg1 or by email at eric@all-calls.com.

About Eric Berg

Eric Berg is the Vice President of All-Calls™, an American based at-home call center outsourcing firm. A 20-year veteran of the contact center industry, Eric has held a variety of roles from contact center agent to Vice-President of a 950 seat, multi site contact center operation. Eric is a national speaker on contact center strategy and trends. Eric also is Co-founder and Treasurer of the Midwest Contact Center Association (MWCCA) and serves on its Board.
About Eric Berg 33 Articles
Eric Berg is the Vice President of All-Calls™, an American based at-home call center outsourcing firm. A 20-year veteran of the contact center industry, Eric has held a variety of roles from contact center agent to Vice-President of a 950 seat, multi site contact center operation. Eric is a national speaker on contact center strategy and trends. Eric also is Co-founder and Treasurer of the Midwest Contact Center Association (MWCCA) and serves on its Board.