Should contact centres be placed offshore?

A survey has indicated that 65% of customers didn’t care where their calls were handled, as long as they were handled well.

Jo Causon from the Institute of Customer Service argues that if you export bad practices overseas, you will still get bad customer service.

Mention customer service and before long the issue of contact centres and overseas call centres will inevitably enter the conversation.

This in itself is hardly surprising. We live and work in a 24/7 society and we expect access to services to be available all hours. Contact centres are currently the most widely available option in meeting these expectations and in many sectors, consumers’ view of an organisation is shaped by their experience with this channel of contact.

We investigated this subject in our UK Customer Satisfaction Index, published at the turn of the year. We polled our 26,000 consumer base asking them to identify the organisation that gave them their worst customer service experience and then pinpoint which element of that incident they most disliked. The biggest single issue was dealing with contact centre staff outside the UK, with close to one in five respondents citing this problem. This figure escalated rapidly as you moved through the age groups, from just over 12% among 18-24 year olds to almost 27% in the 65 and over age group.

So there is clearly a great deal at stake here. In the drive for organisations to remain price competitive, the need for ‘follow the sun’ operations must be balanced against maintaining customer service levels and the dangers of damage to brand reputation should these moves fail.

Since offshoring became a mainstream business option in the 1990s we have seen a steady stream of companies returning their operations to the UK, often accompanied by great media fanfare. BT is reputed to have cut 4,000 positions from its Indian call centres in the past year while the Mumbai-based company FirstSource, whose clients include some of the UK’s best-known brands, now plans to hire 500 people in Britain in the next two years.

Such announcements have been met with knowing looks and an ‘I told you so’ attitude. A number of companies have also made a point in their marketing that they only operate UK-based call centres. But does it follow that offshoring has failed?

All abroad?

From this Institute’s point of view, this rather misses the point. You can just as easily deliver and experience poor customer service from a UK call centre as you can from an overseas one. It doesn’t matter where the contact centre is based. It is about the ability of the employee in that centre to be able to help.

This is the crux of the problem. If the main driver for offshoring was cutting operational costs, many organisations have found that these savings didn’t materialise over time. In part this has been because they underestimated the amount of resources which would be needed in supporting geographically distant operations.

For instance, one survey in the financial services market found that overseas call centre workers didn’t have a strong enough understanding of the UK financial system and this meant that they struggled to deal with ‘non-standard’ requests.

A central tenet of good customer service delivery is the requirement to provide employees with the knowledge and freedom to deal with customer queries and not to be too tightly bound by scripts and process. This means treating customers as individuals and understanding that customers are different, not only in the nature of their enquiry but in how they want it dealt with.

Much of this comes down to training, not only in the details of the product or service in question but also in providing a real understanding of the values and ethos of the client’s brand the contact centre is delivering. For here lies the major risk for companies outsourcing their contact centre operations, whether in the UK or overseas. As indicated earlier, given that for many consumers the main contact they will have with an organisation will come via a contact centre, the experience they receive will profoundly shape their perception of that organisation’s brand reputation.

A potential disadvantage of an offshore call centre is that the company must rely on a third party to handle its customers. Arguably, employees at an offshore call centre have less of a stake in customer satisfaction than the company for which they are working.

Consistently poor service will have an even more pronounced effect on reputation, with consequent detrimental effects on customer loyalty in a difficult economic environment where organisations are attempting to retain their customers and competitors are eager to recruit disaffected consumers. Brand loyalty is built through marketing and product satisfaction, and ineffective customer service, whether outsourced or in-house, can easily destroy that investment.

Shifting sands

One thing we need to remember is that things have changed dramatically since offshoring was first introduced. As customers we have become much more demanding. In 2001 50% of people were willing to complain. In 2010 our research shows that figure has gone up to 75%. But without doubt the most striking change has been in how we complain.

The rise of social media means that we don’t just swap stories of bad customer service with friends and neighbours, we can post our concerns and experiences on social media networks for millions to read. We found that close to half the people we polled related their experience to 5 or more people, while 20% told over 10 people.

A customer now has the same impact as a newspaper reviewer. Our research confirms that negative word of mouth is now what organisations need to tackle rather than merely complaints that are made to them.

So there is much at stake and companies need to be clear about what they are hoping to achieve by moving part or all of their customer service function offshore. It is no good exporting bad practices overseas, you will still get bad customer service. If you are aiming for excellent customer service, average handling time metrics are not appropriate, whether your call centre is in the UK or overseas.

Opening this article I stated that call centres are perhaps the most regular contact a consumer has with an organisation. They are not the only contact and it is important to remember that fact. While it is true that many people express frustration at call centre service, including being held in a queue, constantly passed from agent to agent, repeating their customer details, etc., it is equally true that at other times customers welcome the convenience of such contact. This can include making changes to personal details, out-of-office-hours contact – or switching from web contact to speaking directly to an agent at the click of a button.

Technology is providing an ever-increasing number of options for communications between organisations and their customers. With opportunity comes challenge as consumers expect to be able to develop a relationship with these organisations over the channels of their choice, when and where they want.

Jo Causon

Contact centres will continue to play a key role in that activity. It is true that in 10 years’ time, maybe even in five years’ time, they may look very different from today. We live in a global marketplace so it is reasonable to expect that overseas centres will continue to be part of the customer experience.

The important lesson to heed is that wherever they are, contact centres cannot be viewed in isolation from the rest of an organisation’s customer service focus. This may have been an issue in the past when the move offshore was driven by a focus on cost cutting.

In a world where product differentiation is short lived, value for money a given and customer feedback and communication immediate and highly visible, we need to view the role of the contact centre as part of our overall processes and culture which focus on the customer. This is because customer service is the only sustainable competitive advantage in the world we live in today.

Jo Causon is chief executive of the Institute of Customer Service.  www.instituteofcustomerservice.com

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Author: Jo Robinson