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To Outsource or Not to Outsource: Keeping Customers Close to the Vest

Putting one's customers — the lifeblood of an organization — in the hands of an outside agency can be a frightening thing, akin to new parents leaving their child with a babysitter for the first time. Corporate executives can be forgiven for feeling a certain degree of apprehension. Nevertheless, many companies have successfully arranged for an outside vendor to manage their customer care needs.

Following is an examination of the most common objections to outsourcing:

“Employees of someone else's company can't care as much about my customers as my own people.” This is a common but misguided perception. Customer service representatives will care about the things for which they are trained. If your predominant corporate culture dismisses customers as a bothersome pest, that is how your CSRs will treat them. If your outsourcing bureau instills positive values to their employees, that will color their actions accordingly.

“I need a higher level of CSR. Agencies tend to hire “en masse,” and I'm afraid of what I'll get.” Generally speaking, you get what you pay for in life, and you can expect what you inspect. In other words, your return is generally commensurate with your investment in time, energy and cash. If you're hiring agents that are dedicated to your program, let your vendor know what you expect in terms of CSR profile; that's what it will recruit. And if you offer to help screen prospective reps, you can positively affect your agency's hiring program — resulting in a situation not unlike having your own inhouse representatives.

“My training regimen is unique. An outside agency can't hope to replicate it or its results.” Why not? Is there some reason you don't plan to share critical information with your new partner? If you have a specific training plan that has worked effectively in the past, you should bring that to your outsourcing partner's attention. Your outsourcing partner has probably learned a thing or two along the way. Join forces to develop the strongest training plan possible.

“I won't have enough influence over the service levels achieved by the center.” If you feel that your customers won't get the attention they deserve — and that you're paying for — be sure to contractually agree upon specific service levels. And of course, the appropriate reporting mechanism to keep you informed regarding compliance should be in place. If you haven't thought this element through, the odds are that your inhouse center won't provide the level of service you want.

“I'm afraid that I won't have a high level of involvement with my customer interaction center if I outsource.” If you plan to locate your inhouse operation adjacent to your home office building, certainly — proximity does have some impact. You'll have fewer choices of location when outsourcing. However, by eliminating the need to establish facilities and personnel, you can react more quickly to changing market conditions and make decisions based on long-term needs, not location or human resources. Still not sold? Team up with an outsourcing partner that is willing to run your inhouse center. Ultimately, involvement is the key to program success, client satisfaction and, finally, contract longevity.

“Inhouse reps have greater access to customer information and company data that may be necessary to sustain the customer relationship.” This is true only if you limit your outsourced CSRs' access to necessary information. Today's technology should make that objection as obsolete as a vacuum tube. If your inhouse CSRs are taking time to walk down the hall to visit “the hall of records,” then you have internal efficiency issues that need to be seriously addressed.

“If my outsourcing partner can make money managing my customer relationships, then it stands to reason that I could save that much money by handling the whole task internally.” This objection negates the entire concept of core competencies and the built-in efficiencies that come from doing one thing well. But even if it were true, building and operating a customer interaction center and maintaining the human and technological resources necessary are an expensive proposition. Your company may well have other things it could do with that money to greater corporate advantage and competitive edge.

For years, pundits have waxed philosophical about the concept of outsourcing customer service programs. “Better efficiency and flexibility,” maintain outsourcing proponents. “Better care and greater CSR loyalty,” respond the inhouse champions.

There are pros and cons to each side, and the best and only answer to the question, “Should I outsource my customer care functions?” is a resounding, “It depends.”

In either case, personnel matters are central to successful operations. The good news on the hiring line is that customer interaction centers haven't been affected by the tight U.S. job market as much as other types of businesses because they rely on unusually deep labor pools. According to Datamonitor, 3 percent of the U.S. working population is employed in customer interaction centers, for a total of 1.55 million CSR positions. At a 6.5 percent compound annual growth rate, that number will reach 1.979 million by 2002.

Additionally, CSRs are more qualified today than ever due to Web-enabled CRM programs and more complex technologies requiring a higher skill set. For example, in technical support situations, it's not uncommon to find a Microsoft-certified systems engineer on the other end of the call.

Of course, with a labor pool this deep comes the issue of retention. With qualified CSRs on the front lines, businesses must be mindful to offer continuous training and coaching to everyone. Motivation means offering incentives to people who perform well. It also means promoting from within, a strategy that's not remembered often enough in call centers. Establish a management track and don't discount the motivational effect of a $150 chair or $200 headset on someone who might cost $30,000 to replace.

Ultimately, cost and HR issues aside, the decision of whether to outsource is one based on convenience and desire. There are no foolproof methods for guaranteeing success within the customer services space, outsourced or not. Chief among the advantages to outsourcing is the fact that you pay for what you are doing after the fact, as opposed to having a major cash outlay up front. It's not a right or wrong decision one way or the other but a decision that must be arrived at for all the right reasons.

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