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What is the secret to successful outsourced customer service?

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26th Sep 2008
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The performance of outsourced customer service has been brought into sharp focus in recent years. So how can you get the most out of your outsourced customer service - and how can you develop a more strategic partnership to contribute to this success?

secret to success

By Martyn Hart, National Outsourcing Association

Competition in the customer management outsourcing industry has reached fever point in the last five years, with more and more providers competing for market share. There is no doubt that customer service is one of the most important differentiators in today’s marketplace. With the recent consumer and press backlash against offshore call centres, the need for organisations to make correct sourcing decisions has become more important than ever.

"Firms are starting to look beyond cost cutting as the only defining factor when choosing an outsourced provider; they are beginning to see strategic integration in an outsourcing contract as being an important aspect."
Martyn Hart, chairman, National Outsourcing Association

 

Firms contracting outsourcers to supply customer management must ensure that both they and the supplier identify what is expected of both parties. Businesses cannot simply expect a supplier's method of working to just fall in place with their own strategic objectives and should be careful that the supplier doesn’t expect you to fall into the way they do things (unless that’s what you want of course!).

End users are now starting to look for the right balance between the quality of the service required and the best savings. This is where the right strategic management of an outsourcing deal becomes imperative.

Organisations are now taking a hard look at which location and call centre will best suit their needs. Decisions based solely on cutting costs can actually create more costs, more work and cause far more headaches to the organisation and also the supplier in the long run. Organisations are starting to look beyond cost cutting as the only defining factor when choosing an outsourced provider; they are beginning to see strategic integration in an outsourcing contract as being an important aspect.

Shaping up customer management services

In a highly competitive call centre market, end users can’t run the risk of alienating their customers through poor service, and then having that poor service pasted across the trade and national press. It is the ‘customer experience’ that people remember and through which customer satisfaction can be driven. Increasingly organisations are realising the value of keeping high-end customer facing functions in their domestic market or nearshore.

"For too long end users have viewed outsourcing as nothing more than a cost saver. This narrow expectation has resulted in contracts that do little more than squeeze providers’ margins and penalise them when productivity falls."

In response to this, suppliers are having to shape up their customer management services. In the long run this will be beneficial for both end user and supplier. End users will engage more with those suppliers that have the capacity to tailor their services to meet the strategic objectives of end user organisations. Of course, this puts these suppliers in a stronger position and will create a competitive edge over other service providers who are still playing catch up.

While the performance of call centres has been criticised by consumers, the debate about who is to blame - the organisation outsourcing, its customer service or the outsourced service provider - has raged within the industry. With around 30% of all outsourcing contracts continuing to fail and a further 30% unlikely to be renewed at the end of their term, organisations and outsourced service providers need to move towards a truly strategic partnership in order to make these relationships a success.

For too long end users have viewed outsourcing as nothing more than a cost saver. This narrow expectation has resulted in contracts that do little more than squeeze providers’ margins and penalise them when productivity falls. If we accept that satisfied customers stay loyal, spend more and pass on recommendations to their family and friends, it makes sense that contracts should be designed to reward service providers if customer satisfaction increases in line with strategic objectives rather than penalise them when productivity falls.

Outsourcing contracts

Organisations need to ensure they undertake the following tasks before they enter into an outsourcing contract:

  • Ensure the end-to-end in-house processes are right before outsourcing. Otherwise the gaps that exist will only grow when the process is outsourced (unless of course that is why you are outsourcing, to fix a service, but expect to pay more).
     
  • Keep an element of ownership within the organisation, otherwise your run the risk of losing control over your customer’s experience.
     
  • Resources are another key factor. If the right resources are not in place on both sides of the agreement (the organisation and the supplier), then tough times lie ahead.
     
  • Ensure that clear objectives are set from the start. There is no use setting or accepting unreasonable metrics, this will only result in a breakdown of trust and ultimately a cancellation of a contract, try to make some metrics business orientated.
     
  • Both parties should come to the contract table with open hands, in order for outsourcing contracts to run smoothly and efficiently both end user and supplier must be open about their intentions and what they can provide.

    The performance of call centres, especially those located offshore, has been brought into sharp focus in recent years. Negative press coverage has meant that end users are now insistent on receiving the highest possible levels of service – in terms of security, compliance and customer relations. Level of quality has become just as important as cost when making a sourcing decision.

    The responsibility for producing a successful outsourcing and offshoring agreement must be shared between the end user and its supplier, and strategic objectives should form an integral part of those contracts. This realisation has dawned on most within the customer management industry over the past years and both sides are now becoming more fully aware of the key roles and responsibilities that they play to ensure that any outsourcing deal, whether onshore, offshore or multi-shore, is successful.

    Martyn Hart is the chairman of the National Outsourcing Association (NOA), www.noa.co.uk.
     

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