Eradicating 'Derek Debit' (alias direct debit) from customer databases and Zebras rather than Zebra Road Crossings from car insurance claims; combined with customer pleas such as the Australian who just wanted to "talk to an Australian" not "someone in Scotland", is forcing organisations to rethink outsourcing customer management offshore.
Cloak and dagger activity abounds in this market. Delegates are reported to have travelled incognito to a recent Offshore Customer Management Conference in New Delhi, whilst major brands 'stealthily' return 'onshore' because of brand damage and unforeseen costs. Offshore is a highly charged subject, yet undoubtedly here to stay as a strategic option for sourcing customer management. However, decisions should be based on customer and resource needs not simply sourcing.
For too long the decision on CM outsourcing, particularly offshore, has been driven by cost. Quality of customer service and experience has been ignored because the business case is 'too hard' and ‘not proven’! Given that 40 per cent of company costs are in transactions and service, focusing on cost is right but not at the expense of quality. Doing so ignores another major economic fact, that competitive differentiation lies in relationships built up through good experiences and valued service. (see From Interaction to Profit - Peppers & Rogers - free - also Building Great Customer Experiences - Colin Shaw - chargeable )
The state of relationships with outsource suppliers has also contributed to the damage now suffered. Instead of building crucial strategic partnerships to facilitate business improvements through 'coalface' knowledge, procurement teams have favoured Draconian gains/loss models that would make a mathematician look twice. The result is the loss of a market pulse critical for ensuring market adaptability and competitiveness. (see Making Your Business Fast + Simple Budd - free) Now, as the cold light of reality dawns, organizations are searching for a new frame of reference for the outsourcing/offshore decision.
Fortunately one does exist, emerging from the confluence of brand engineering and process engineering; where the customer value proposition meets delivery through the customer experience. Touchpoint mapping. (CRM- “Managing Its Touchpoint" – Scott MacStravic -free)
Via dynamic touchpoint mapping, designed customer service/experience at each point of the customer lifecycle, is translated into processes and matched to data, people and technology needs. (see CM Insight and Virgin Money Improving the Customer Experience Designed - free). Using the map, choices can be made about where to use high touch and where high tech resource. It is then that decisions can be made on cost effective sourcing – inhouse, insourced, outsourced and where geographically - on, near or offshore.
When looked at in this way organisations realise that CM sourcing can be ‘blended’. Some, processes can go offshore, some near and some would be better done in-house. Back office processes still find favour offshore, but increasingly global companies are using relevant areas of the world for brand advantage eg to service non English speakers.
By mapping out customer lifecycle interactions it also suddenly becomes clear that a variety of outsourcers are being used for customer management, not just call centers. Analytics and advertising outsourcers for targeting, lead qualification call centers in the business development stage, and direct mail for customer management (see Outsourcing in Direct Marketing - DMA - free). CM sourcing therefore, needs a more holistic approach if a more consistent customer experience is to be achieved. Seeing this, suppliers are starting to move from their traditional functional areas to 'full service' customer management. For example call centers are becoming customer interaction centers with services covering areas such as direct marketing, business process design and customer insight. The winds of change are blowing.
Touchpoint mapping also highlights changes needed in the criteria for supplier choice. (see Channeling and Rechanneling Care, IBM - free). Up the list go:-
- cultural match for building a strategic partnership
- capabilities to deliver the required quality of service cost effectively
- providing relevant knowledge on market changes and customer feedback in order to support business improvements and even, innovation.
- consideration should also be given to the ability for skills transfer
More time must also be spent looking at the new services such as feedback, analytics, and sharing data; and gauging staff quality via recruitment selection, retention, coaching and philosophies. New people capability standards are springing up to help in this task eg People Capability Maturity Model, but how should competence in the other services be judged? Time must also be spent in ensuring that outsourced staff are treated as part of the client organisation and receive support such as brand coaching.
So organizations asking 'if a call centre should go offshore' are not asking the right question. The question should be 'how do we cost effectively resource our customer management?' A slightly more strategic question, but one that should save a lot of money.
As always we’d like to hear your comments. Make them below or email me at firstname.lastname@example.org
- Customer Relationship Management – a people focused approach - The Proctor Consultancy (Free)
- The Little Things That Mean A Lot – Jennifer Kirkby (Free)
- Retail Financial Services - "The Next Generation of Call Centres"(Free)
- Service Excellence = Reputation= Profit (Chargeable)
Jennifer Kirkby Strategy Archive
Download previous strategy reports by Jennifer Kirkby:
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- 2006 - Company (Relationship??) Management
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- The 'Must Have' Customer Strategy - Linking Vision to Execution
- Winning friends and influencing people!
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- 2005 – The Year of The Customer Community
- Insight from your CRM Strategy Polls
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