QUESTION

Outsourcing Customer Service- Is it a real solution? Outsourcing any of your business functions can pose risks, or at least give you reason to lose sleep, but above all, customer service outsourcing is seen with the most stress. After all, what is more important to a business than its customers? The thought of hiring an overseas firm at a discount rate, with limited monitoring, and asking them to interface directly with your customers is bound to raise your blood pressure.

Customer service outsourcing can be done right, and with the proper supervision and training, can be a huge cost-saving benefit to your business. But it can also be done wrong, and the following case study will offer some insight as to what can go awry when outsourcing, in this case, to India.
A mid-sized web services firm in California decided to outsource their call centers to a firm in Bangalore, India. Most of the calls were for sales or technical support, and the business is built on many repeat and long-term customers. They were currently spending over $50 per hour on a call center in the U.S., and the Indian firm offered the services for only around $10 an hour, so the temptation for tremendous savings was immediately apparent. But here are the main things that went wrong:

1) Technical issues: A delay in the phone connections resulted in stilted and confusing communications for many customers. While India has a first-rate telecom system, the geographic distance sometimes does cause delays that many U.S. callers are not accustomed to.

2) Priorities: The call center in India had been trained to maximize call volume by keeping calls short and getting their representatives to move onto the next call. The company didn't specify which metrics would be used to measure the success of the call center, so they fell back on what they had been trained to do for a previous client. For the current company, short and hurried calls led to increased customer dissatisfaction

3) Training issues: The call center in India had a handful of employees trained by their U.S. counterparts, but over time, these employees had to train others, who in turn trained others, and the effect of the training weakened with each step. This led to the occasional mishandling of a call, or the giving out of information that was completely incorrect.

4) Language issues: While many call center employees in India actually speak very good English, this company ran into issues with technical jargon that was not properly baked into the training to begin with. Many words mean something slightly different in the version of English they speak in Indian schools, so some basic phrases can get muddled if they are not pre-screened and properly covered in the training. Ultimately, the California firm suffered too much form declining customer service, and despite the cost savings of outsourcing, they had to move their call center back to the U.S.

Required: Outsourcing customer service has tremendous disadvantages on a company. What would you do if you were managing the Californian web-service company? If not outsource, what measures would you adopt to integrate efficient customer service in your company?