Outsourcing: “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man’s lawful prey” - John Ruskin
Outsourcing has been a growing trend since the 1980s and remains at the forefront of the business agenda. It has proved an appealing option to more and more companies feeling the financial strain of their customer relations and sales departments as they grow to meet expansion. And yet, the highly attractive commercial benefits must be weighed with other considerations as businesses operations steadily become more sophisticated.
In the call centre world, most outsourcing deals were originally decided on a quantitative basis weighing up the costs of averages on speed of answering a call, average cost per call, % agent time spent on the telephone etc. Companies analysed the cost base of the outsourcer to make a decision. Thus, an outsourcer with offshore facilities or one funded by government grants or job creation schemes would be in a strong position to win the contract. This often led to large inexperienced teams being paid an hourly rate who were then micro-managed by the outsourcer to deliver value.
While such savings look good on a spreadsheet, they often create the wrong focus. They miss the fundamental purpose of call centres – to supply an effective, available and scalable customer communication capability across all touch-points. Initially call centres just dealt with telephones and post but now call centres are expected to provide service along a myriad of communication channels, including SMS, webchat, video and mobile mediums.
Outsourcing should not simply be seen as a cost cutting exercise. Choices made in this way not only put specific business functions at risk but also infringe upon brand at a wider level, creating a question mark over the overall future of the business. The call centre is a powerful machine that can significantly increase the revenue and profit of a business because it is positioned at many critical points in the customer journey.
Businesses need to take a wider view to the added value outsourcing can bring to the business and choose a supplier based on their quality and knowledge rather than simply the cost of their business offering. Indeed, because the outsourcer becomes effectively an extension of the company’s brand, value should be seen as the key differentiator when outsourcing operations.
It’s important to assess what influence the outsourcer has on customer behaviour. This concerns everything from customer purchasing decisions to customer loyalty and recommendations. Only after this has been assessed can a business be convinced that these services are being delivered in the most cost-effective way. Keeping costs down to a minimum in a call centre involves careful processing across technologies and is best run by experienced management. Cost base should not lead the argument; anyone can find a sales director for £15,000 a year but no company does, so why do so many companies hire sales or service reps on price alone?
It ‘s no good spending millions of pounds building up a reputation for being a reliable, customer- focused business, with fantastic products if you then deliver a sub-standard call centre experience; customers just think you are being insincere. It’s the whole experience of a brand that is important not just the product alone, and it’s this experience that determines whether your company will be one that people choose to use and recommend to others.
In any event, many cost savings based purely on analysing the cost-base of the outsourcer are false economies. For example, if you halve your cost base but double the call length you have made no cost savings and probably aggravated your customer by keeping them on the phone so long. If you halve the cost base but the customer has to double the calls he makes to resolve the issue then your cost of resolution has not been reduced and what’s more the customer is disgruntled.
In truth, outsourcing is really about letting those who possess a particular skill or expertise in a given area do the work better. Therefore, one has to define what “better” means. One has to start with the business objectives. Normally, this revolves around increasing lifetime value and enhancing the brand.
The levers of lifetime value tend to be:
- Number of customers,
- How long they remain loyal
- How much customers spend in relation to the company’s cost of servicing them.
The lever of brand is the management of customer expectation towards the corporate image that is promoted.
In response to today’s demands a new breed of outsourcer is flourishing. At the heart of their success is a different approach to the traditional “bums on seats” model.
These value adding outsourcers have:
- Operational Excellence
- Multi-channel technology platform - one that has single view of the customer communication and allows an agent to simultaneously use several communication channels across the phone and the web.
- A tailored approach - All activity should be bespoked to the needs of the clients, including the people, IT and processes.
- Transparency -The project management structure in place should deliver accountability and responsibility, resulting in the empowerment of staff.
- Financial alignment - A return on investment model is signed up to by both parties that is linked to the key strategic drivers.
- Brand understanding - It’s crucial to understand that every client is very different. Even if they have virtually identical products; they have very different brands and strategies and the call centres will need to reflect this.
- Customer journey planning - The outsourcer has to be able to map the customer journey and plan how to effectively influence every customer touch point
- Customer intelligence - Call centres take millions of calls every month and provide invaluable information about the customers, the products, the propositions and the expectations. The feedback loop needs to provide effective insight.
- Listening skills - The outsourcer needs to understand their clients and understand their customers and help bring them together in a more effective way.
Tags: business acumen, call centre, customer behaviour, customer loyalty, experience, multi channel, Outsourcing, price, technology
