Customer service is critical, yet delivering it can be expensive, particularly as companies grow larger. "Where do I base the reps? How do I stagger time zones? Do I provide live chat? Or text?" says Scott Carr, CEO of Modria, which makes dispute-resolution software. Do you forge ahead on your own, as Modria does, or do you outsource?
"If customer service is not your core competency, if it's not a strategic differentiator, and if you can't do it cheaper, you should outsource," says Tom Lewis, a former Deloitte partner who has headed its call-center advisory practice.
Cost isn't the only consideration. Arccos Golf, a platform that allows golfers to track their performance, decided that in-house was not a problem but an opportunity. The company, which sells sensors that attach to clubs and send shot analytics to a smartphone, chose to hire PGA pros and tech-obsessed golfers to handle calls. "It puts us at a different level," says Sal Syed, CEO and co-founder. "We're not selling a product, but rather an experience."
In any outsourcing calculation, cost is a factor, of course, but the bigger issue might be one of focus. Keeping customer service in-house may channel more energy away from product development and innovation. Generally, the more complex and costly the product, the less the attraction of outsourcing, which, says Vikram Subramaniam, vice president of customer experience at the freelance marketplace Upwork, can be like throwing your business over a wall. "They may work on my stuff for a while," he says, and "then a few hours on someone else's."
Essentially, the outsourcer's job is often to play Tetris and fill every box--i.e., to keep every agent busy with whatever. Subramaniam is trying to carve out a space so that even relatively small companies can outsource customer service. Upwork, with its 10 million freelancers, is trying to become a solution for outfits worldwide that need smaller, dedicated teams of four to 400 web developers, marketers, and customer service agents.
Handing over certain repetitive customer service tasks--appointments and payments, say--to technology saves complex issues for those more expensive, highly trained humans. Lewis left Deloitte to head up SmartAction, an artificial intelligence company that provides automated voice self-service systems. AAA in New York, New Jersey, and California now handles roadside-assistance calls with SmartAction's Intelligent Voice Automation. It understands, for example, "Hold on a sec" and "Can you get here sooner?" Modria sells a system aimed at short-circuiting small problems--like damaged goods and wrong items--before they escalate. Customers click a Resolve button and are automatically offered refunds or sent replacements. "We can resolve 60 to 90 percent of disputes through our software," says Carr, "leaving the messy 10 percent for customer support people." Speed matters. "Customers would rather lose fast than win slow," he says.
Understanding the Lexicon of Call Centers
There are some 65,000 call centers in the United States. Employee turnover is high, so you are paying the training cost. But proximity offers more control.
Central American and Caribbean nations offer lower rates, and they're close enough to visit if, say, you need to demonstrate new products.
India is cheap, the Philippines are culturally aware of the U.S., and Central Europe is getting popular. But accents can be an issue. And complex products are better served at home.
What You Need to Know About Call Centers
- Decide What Counts Most
"Every call center is like a snowflake," says Tom Lewis, CEO of SmartAction. "There is no best of breed in all areas like chat, email, social media." Consider using multiple contact centers and a champion-challenger setup so they compete for the business.
- Metrics Matter
If you want 80% of calls to be answered in 20 seconds, says Lewis, determine how that will be measured. Averages can be deceiving.
- Know What You Don't Know
Ask yourself how engaged you want to be with such tasks, advises Vikram Subramaniam of Upwork. "If you don't have a clear vision, you can end up over-outsourcing"--that is, handing outsourcers such tasks as the writing of scripts and communicating your brand message, which are better kept in-house.
- Nail the Locale
Make sure there's enough capacity in the center you've been sold, says Lewis. Otherwise, you'll end up with a second-string site.
- Outsource Your Outsourcing
If you haven't outsourced before, consider a consultant. There are the big guns like Deloitte, but plenty of single-shingle outfits, too. "A good consultant," says Lewis, "should have six or seven solutions for you."
The Changing Map
A Deloitte outsourcing survey outlines which customer service functions are being moved and where.