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April 23, 2009

Outsourcers Need Focus On Expertise, Not Price: Datamonitor

By Brendan B. Read, Senior Contributing Editor

For teleservices firms to compete successfully in this economy to retain existing business and gain new clients and programs it is no longer enough to be competitive on price: they must also offer a compelling value proposition on services. These include on ways to help clients with customer retention, customer relationship management, high quality support, and collections.
That is the message of a new Datamonitor report, ‘Managing outsourced contact center functions during the economic slowdown (Strategic Focus)’. The paper, written by Peter Ryan, lead analyst focusing on contact center outsourcing and services, points out that the recession has changed in customer service delivery goals. No longer is increased revenue generation cited as a principal objective: rather, the need to ensure a maximum degree of end-user satisfaction is key. 
“In a recessionary period, outsourcing clients are more concerned with retaining as much of their client base as possible,” says Ryan. “Clients understand the opportunity to cross-sell and upsell will come with the recovery, but the immediate future means keeping customer churn to a minimum. If this can be achieved through lower-cost alternatives, such as automation or offshore and home-based customer service agent delivery, then all the better for the client’s bottom line.”
The paper explains that sales and marketing, once the ‘bastion’ of teleservices has evolved in recent years. The growth of do-not-call lists across both developed and developing economies has made outsourcers and their clients become more creative in how to use outbound functionality. Many have opted for warm-calling approaches in which contact center agents contact end-users with whom the outsourcer’s client has an established relationship, so as to ascertain their satisfaction with a recent purchase. Not only does this reinforce the commercial relationship, it also affords insight into future buying, and can also lead to immediate cross-sell / upsell opportunities.
At the same time the domain of technical support is no longer the commodity it once was, with more consumers globally using devices and solutions that are more complex than ever. However, according to Ryan, this is an area in which contact center outsourcers have the chance to win significant business in the coming years.
“There exists significant opportunity for contact center vendors in the field of technical support,” says Ryan. “Clients selling any type of technology are tired of the headaches related to recruiting savvy customer service personnel who can address end-users using multiple channels and guaranteeing excellent levels of interactions. A savvy outsourcer, using a combination of offshoring and automation, can not only take on and improve the technical support end-user experience, but also do so at a reduced price. In the technology sector, where margins are constantly being squeezed, this is an important success factor.”
Meanwhile one of the likely silver linings in the downturn for teleservices is debt collection a.k.a. accounts receivable management (ARM (News - Alert)). It can be argued that the same technologies i.e. predictive dialers can be repurposed and agents easily retrained from outbound telemarketing.
While the Datamonitor paper acknowledges that debt collection/ARM has been pointed out as a growth area it points out that there are a number of obstacles for outsourcing vendors looking to enter this space. This includes statutory compliance requirements and saturated markets as being among the most important. 
“But, if an outsourcer is willing to invest the funds necessary to take on the right management team, or potentially buy a debt collection specialist, the long-term rewards could be significant,” says the report.

Brendan B. Read is TMCnet’s Senior Contributing Editor. To read more of Brendan’s articles, please visit his columnist page.

Edited by Stefania Viscusi

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