As Mark Twain once said, “The more you explain it, the more I don’t understand it.” A recent study shows that confusion and frustration caused by the language barrier still plague the customers of companies outsourcing their customer care centers outside of the USA.
It’s no secret that American companies continue to cut costs in the wake of the worst recession in US history. And for service intensive industries like telecommunications, outsourcing call center functions has been a major trend in cost containment, prevalent among even the industry giants. Ironically, the customer is the one who has suffered the most for it.
According to CFI Group, a leading authority in customer satisfaction, the issue is significant: “In general, customer frustration with offshore centers yields poor scores across the board.” The grim reality is that CFI’s satisfaction index rating is 27% lower for customer experiences where the perceived location of the call center was outside the US. CFI reports, “Callers have a difficult time understanding offshore agents, which leads to an ineffective and inefficient process.”
In light of this study, the obvious question becomes, “Is outsourcing customer care to foreign companies a viable, long term cost cutting strategy – all things considered?”
Perhaps it’s still too early in its adoption phase to tell. The fact is that companies which have opted to outsource could actually be experiencing a negative net impact. While direct service costs may be reduced, the savings may be offset by loss of revenue from directly-related customer churn, as well as the impairment of good will, which eventually translates into loss of revenue. Furthermore, as statistics show that it’s normally easier and less costly to generate a dollar of revenue from an existing customer than from a new one, marketing to a less-than-satisfied customer base could lead to higher sales acquisition cost.
The good news, according to CSI, is that customer satisfaction with call centers in general has been trending steadily upwards in small increments in recent years. With that trend, it will be interesting to see if American companies will be able to justify to their stake holders, their customers included, the outsourcing of customer care to foreign companies.
What’s your opinion on this?