Research just published reveals that UK companies setting up overseas call centres are losing customers at a rate that actually negates the cost-saving of outsourcing abroad. The following article in Brand Republic describes:
The current use of offshore call centres is damaging the brands of UK companies and hitting profits, according to a new survey.Industry analysts ContactBabel says one in seven customers who used an offshore centre responded by changing supplier.
The report, "Finding the balance: the effect of offshore customer contact on profit and brand", claims that UK businesses are using the offshore call centre industry in a cost-obsessed and unimaginative way that is severely hurting their brands.
The report, which analysed a survey of 1,008 UK adults in February 2004, found that 14.2% of the UK public changed their supplier as a result of using an offshore contact centre.
Out of those who personally experienced offshore customer contact, 74% said they felt more negatively towards the company than before. UK telecoms and insurance companies experienced the greatest levels of offshore-related customer resentment, with Scottish consumers the most likely Britons to change supplier because of an offshore service.
The survey also found that those who experienced offshore contact were also four-and-a-half times more likely to change their supplier than customers who had no direct experience of offshoring.
ContactBabel said that a typical high street bank would save £9.26m a year in operating costs by replacing 1,000 UK agents with the same number in India. However, if only an extra 0.343% of customers defected in protest, the bank's revenues would be reduced by the same amount. Last year, 1.09% of UK banking customers changed banks as a direct result of customer service offshoring.
As I stated in a previous blog, it seems that many businesses today view their customer interactions as a COST TO BE REDUCED rather than as a potential investment in service, dialogue and learning. By automating customer interactions or outsourcing them overseas for example, many companies are at risk of commoditising one of their most precious future innovation assets: the opportunity to learn from and create value with their customers. In most cases such cost-focused initiatives will fail to deliver lasting value. Why? Because organisations use them as quick-fixes instead of addressing their more deep-seated underlying problems - i.e. a lack of customer knowledge and a limited market orientation...
I was interested to see your article. Nowadays I ask two questions when I suspect that I am being phoned from an overseas call centre by a UK company. My first question is, which company are you calling on behalf of? Secondly, what country are you calling from? If I believe the call centre has been placed in that particular country in order to undercut UK wages and social costs, I then say "Thank you very much. Goodbye" and where/when possible e-mail the company in question to request that they delete me from their sample and explain why I wish to be deleted.
I am not necessarily against calls coming from a foreign country. For instance it may be that the call centre has been placed there because there is availability of staff with particular skills and if I know that the country maintains certain levels of welfare for their workers then I am happy to go ahead. However I will not do business with companies who locate call centres in places like India simply because they can pay people peanuts and do not need to pay social costs.
Posted by: P Murtagh | June 22, 2005 at 02:37 PM