Traditional Customer Service Costs: A Redux |

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Endorsed by the Chairman of KPMG, CEO of Whirlpool, CEO of Intuit, CEO of SAP, Gary Hamel & others!

Traditional Customer Service Costs: A Redux


Posted by on March 26, 2010

Connie Chan, Principal of Chess Media Group, is guest posting today.

Remember the days when we picked up the phone to call the toll-free number to contact a customer service representative when we weren’t happy with the product or service we received from a company?  It was normal to dial in and wait to speak to a real person, sometimes with little wait time: “Your call will answered in the order in which you called.  The estimated wait time is 12 minutes.”  Wait 12 minutes!  At least I could air my grievance with a live representative of the company and hope to get my issue resolved after listening to an 80′s music track.

Overtime, companies realized that the cost of employing domestic customer service call center staff was having a huge impact on profit margins and they had to find a way to slash labor costs.  Enter the outsourced customer service call center.

I recall about 8 years ago I had to call American Express Customer Service.  I was somewhat surprised to hear a strong Indian accent answer my call.  I had just read an article about call center outsourcing in Fast Company, so I asked the agent where he was located.  He told me Bangladesh.  No matter.  His command of the English language and accent were not communication barriers and the agent was effective in quickly resolving my issue.  I know that many others, including myself since then, haven’t always been as successful in overcoming language comprehension barriers.

As we all know, consumers are rushing to social networks to air their customer service problems online, whether directly or indirectly with companies.  Comcast Cares employs a team of 10 people to respond to problems, comments, suggestions, etc. that its Twitter followers leave on its account.  How long will it be before the Digital Care Team needs to grow to 20 or 50 or 100?  Will the high Customer Service call center labor costs of old be revisited and even increase due to the exponential nature of online customer service?

Digital Customer Service departments are staffing up with social-trained agents to respond.  With consumers now expecting response, acknowledgment and resolution in almost real-time, the old days of Customer Service call center wait times seems almost inevitable, except now, consumers want you also understand their personal needs and wants, another wrench in a company’s Social Customer Service strategy.

I’m curious how long it will be until Social Customer Experience is also outsourced.  Do you agree that this will happen?  If so, how do you think outsourcing will affect a consumer’s social relationships with companies?

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  • mikekypros

    Good post Connie. It’s tough to say if social media will be exported or if responses will become much more automated. If it is exported will it lose what made it a favorable option for customers in the first place, having a voice into the company? I do think that customers want to be heard, and they want to know that companies are listening to them. Good customer service and being heard are definitely part of the value equation for consumers, and they will gravitate towards companies with great customer service. One reason why is if companies listen to their customers their products/service will improve and consumers will get more value out of the product/service. Another reason is people do not want to be treated like a number or a dollar sign.

  • lolbsolis1

    Connie – Thanks for the interesting thoughts :)

    I think this is one segment that will never be outsourced. Simply because, almost every employee will have personal brands, in the very near future. As opposed to outsourcing, there will be more global collaboration. Thoughts??

    Cheers,
    Prince

    • conniechan8

      Hey Prince,

      Thanks for your comment. I agree that people have personal brands, but I believe that employees, as representatives on their employer's brand, need to follow their social media guidelines and policies.

      So with the increasing demand for quick response via social media channels, companies will need to increase their staffing to respond. This demand will require a person to respond, thereby increasing staffing costs.

      • lolbsolis1

        No, thank you for responding back :) Love it!

        I still think the increased demand for real time responses will be, and should be, scaled across the employee base of the organization. Employees are knowledgeable not only about their company/products/services, but in most cases, will be passionate & believable advocates – something that cannot be replicated by outsourced personnel, and neither should it be. In fact, that strategy is fraught with long term negative connotations on brand equity.

        What I do see happening is the hiring of power SM practitioners and an expansion of PR, Customer Service, Marketing, Sales, and IT teams.

        What do you think?

  • http://www.kingrpg.net/ KINGRPG

    I like that you think. Thank you for share very much.

  • conniechan8

    Hey Prince,

    Thanks for your comment. I agree that people have personal brands, but I believe that employees, as representatives on their employer's brand, need to follow their social media guidelines and policies.

    So with the increasing demand for quick response via social media channels, companies will need to increase their staffing to respond. This demand will require a person to respond, thereby increasing staffing costs.

  • lolbsolis1

    No, thank you for responding back :) Love it!

    I still think the increased demand for real time responses will be, and should be, scaled across the employee base of the organization. Employees are knowledgeable not only about their company/products/services, but in most cases, will be passionate & believable advocates – something that cannot be replicated by outsourced personnel, and neither should it be. In fact, that strategy is fraught with long term negative connotations on brand equity.

    What I do see happening is the hiring of power SM practitioners and an expansion of PR, Customer Service, Marketing, Sales, and IT teams.

    What do you think?

  • PaulRoberts1

    I think its inevitable that some will outsource/offshore – much like many organizations do now with front and back office functions. In reality, a twitter, facebook or forum response is not that different from an email. The thing that is stopping many organizations from outsourcing now is that many are still coming to terms with the technologies involved. As the phenomenon becomes more mature, so will with the business models to support it.

    Another side to this is that not all organizations offshore their current call center activities. Many prefer a combination of technology and processes to help optimize their resources and drive down costs. This helps them to better know their customers, identify high value customers and serve them first or better personalize service levels. Maybe they even use proactive outreach to preempt a service call and ensure that the customer doesn't need to call and thus add to call traffic.

    In terms of social crm, I think we will see something similar. Some will outsource while others will employ sophisticated technology and strategies to appropriately serve their biggest customers and/or most vocal detractors. We are already seeing the start of that with social monitoring and knowledge management solutions which identify certain keywords or sentiment.

  • Rasheed Bello

    I think customers always act in a delibrate and an unhelpful way.But with much professionalism companies must be able to resolve their problems.

  • Rasbel4ever

    Companies must ensure good customer relations,customer care and excellent delivery services.

  • Joel Gray

    “Customers are always right”, this is may sound to be a cliche but it points out to a very important subject– the value of customers. Any company would always include customer service in its marketing strategy. I wish to share a helpful tool featured at http://www.InfoProductMarketingRevealed.com for a related post. Thanks.

  • Rasbel4ever

    Marketing is challenging but when u consider a good market segementation u will always hit ur target as well as meeting to the standards and satisfaction of ur clients…

  • http://twitter.com/RPGoldenberg Rachelle Goldenberg

    The thing is that not all call centers operate in that way. Most high-quality, reputable call centers answer immediately and never put customers on hold. Outsourcing doesn’t have to be a negative experience, if you go about it in the right way. If you outsource to a company that treats your customers as important, and the same way they would be handled as if they reached the company directly, they don’t even realize they have reached an outsourced service, it’s just an extension of the company’s service. Instead of outsourcing overseas maybe people should consider using a US company like http://www.directlineanswers.com. As a consultant I work hard to connect my clients to resources that add to the customer/client experience, while allowing the company / organization to grow in a healthy way. Frequently, this does mean outsourcing things that can be done professionally and with high-quality results, at least temporarily during transition, but often for the long run if done right.

  • http://www.beatsbydrefed.com/ monster beats

    This is a really good read for me, Must admit that you are one of the best bloggers I ever saw.Thanks for posting this informative article.


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