Losing Money By Spending Less
When Outsourcing Customer Service Doesn't Make
Business Sense: A Case StudyWeb.com is a medium-sized Web
hosting and Internet services provider located in Brookfield, Connecticut.
We've been in business since 1996 and pride ourselves on two things:
offering flexible and customizable solutions and being a completely
customer-focused organization. Due to the technical nature of our business
(and often not-so-technical customers), our clients can require a lot of
attention and personal care. One of our earliest decisions, then, was to
offer live sales and technical support 24 hours a day, 365 days a year.
We take our customer service very seriously, whether it's for a $40,000
Web development project or for a $4.95 domain name, because we value the
people with whom we do business, and we understand that one displeased
customer can undo the work of 10 happy customers. However, taking orders
from a thousand new customers every day is not something for the faint of
heart or the ill-prepared. It requires time and patience, a tremendous
devotion to service and a highly skilled team of professionals.
The Decision To Outsource
We wrestled with the decision to outsource our customer support for
over a year. After reading numerous articles in industry publications,
researching the subject quite extensively and spinning out cost analysis
after cost analysis, we decided it made good sense from a business
perspective. Let the truth be told, the primary reason was cost. In doing
our homework, we learned that it cost only about $11 net per hour for
customer service in India, versus $30 plus to run a call center in-house
in the U.S. The decision seemed like a no-brainer, so we selected a
company in Bangalore, India, gathered our 'best-practices' documents and
began training the key personnel who were going to manage the program in
India.
We thought we were off to a good start, but then came the technical
issues. Even after the considerable ramp-up time to get phone switches
purchased and correctly set up, many of our customers experienced delays
when making calls to Web.com. The dirty little secret of undersea fiber is
that, to Americans, 100 milliseconds is an incredibly long delay,
especially since they are used to having their voices travel at the speed
of light. We also found the physical distance and time difference to be a
big problem. Because the Indian reps were not in shouting distance of our
internal technical team and key executives, important issues were not
being escalated in a timely and efficient manner.
Business differences emerged, as well. Traditionally, when we take a
customer service call in-house, we expect and are prepared to talk as long
as necessary to resolve the issue and ensure complete customer
satisfaction. The key metrics that our Indian call center focused on, such
as call times and abandon rates, worked against this approach. We quickly
learned that the call center in India was less focused on our business and
the important needs and objectives of our customers and more interested in
meeting their pre-defined call center metrics. If, for example, they could
make a conversation shorter or answer more calls per hour, they would do
so and were then rewarded for it. As many of us are acutely aware,
however, shorter call times don't necessarily translate into happy
customers.
Another negative side effect that we experienced was what we've now
coined a 'replicate fade,' meaning our service and best practices became a
copy of a copy of a copy. The highly qualified and skilled people we
trained for three months at our corporate headquarters were training
people underneath them who were then training others, and so on. Because
the effectiveness of our training program was being diluted, our customers
were not receiving the stellar customer support that is the cornerstone of
our business.
The greatest problem we faced with outsourcing our customer service,
however, was the cultural clash. More times than not in our business,
there's a communication gap between the support staff and customers; but
take that misunderstanding and add to it a cultural gap, and you'll start
to see some serious problems ' like we did. The word 'revert,' for
example, means one thing in India and an entirely different thing to a
customer in Oklahoma. In response to this, we attempted to 'whiteboard'
the support process with 'yes/no' procedures, but the exceptions to every
scenario left the board a tangled mess. We soon realized that if you can
draw your customer support process on a whiteboard and definitively answer
'yes' or 'no' to any possible situation ' meaning you can predict and
script every scenario ' outsourcing may be right for you. However, if
there is a 'maybe' anywhere in the mix, you will likely find, as we did,
that all of your problems will gravitate to that 'maybe,' like iron
filings to a magnet.
These misunderstandings in language and technical jargon, combined with
the ambiguous nature of customer support in the hosting environment, led
us to eventually bring our support functions back to Connecticut.
Lesson Learned
Initially, we were optimistic about outsourcing, but in the end, we found
we were starting to lose the quality customer service we had worked so
hard to build. Now, our call center activities are once again in-house, in
the same building as the administrators who run and monitor the network
and servers on which our business depends. By keeping our customer support
within the 'corporate domain,' we are able to maintain control of our
business processes, build trusted relationships and keep customer care,
training and brand management consistent. What's more, the communication
across our different departments has dramatically improved. The staff
receives continual in-house training on the products and services that we
offer and our 'front line' of employees ' the people who talk on the
phones with customers every day ' are in a position to provide constant
feedback to our management team; this ensures we are always in tune with
our customers' needs and requirements.
Outsourcing our customer support process may have resulted in a 3:1
savings in gross costs, but this was quickly negated when our customers
began leaving in droves due to the lower quality of service that resulted
(despite our months of training). In addition to customer frustration,
reduced sales and increased cancellations, we witnessed on-going
technological gaffes and a Sisyphean learning curve, to say nothing of the
fact that we ignored a pool of highly skilled workers who live in, and
contribute to, our community.
In leading Web.com's (www.web.com)
growth, Will Pemble drives and directs all aspects of business, technology
and service development. Having led three previous Internet companies
through every phase of a successful business lifecycle, Pemble draws on
two decades of diverse experience with Internet and e-business
development.
If you are interested in purchasing reprints of this article (in either
print or HTML format), please visit Reprint Management Services online at
www.reprintbuyer.com or contact
a representative via e-mail at
[email protected] or by phone at 800-290-5460.
For information and subscriptions, visit
www.TMCnet.com or call 203-852-6800.
[
Return
To The May 2004 Table Of Contents ]
|