Successful Contact Center Outsourcing

Jan 01, 2006 10:30 PM  By

Most U.S. businesses today are vastly different in structure, strategy, and purpose than they were even 10 years ago. But it’s safe to say that for utter resilience in the face of change, none can beat the call center industry. Buffeted by economic uncertainty, globalization, and massive changes in the mail order and retailing sectors, call centers have gone with the flow, morphing into multifaceted “contact centers” that handle every customer interaction possible, in every communication medium possible. And when it comes to outsourcing some or all of your contact center requirements, there are two ingredients common to every arrangement, whether domestic or international: good measurement and good management. The information on these topics provided below is adapted and reprinted from articles supplied by The Outsourcing Institute, a research and consulting organization based in Jericho, NY. Note: The terms “call center” and “contact center” are used interchangeably.

Call center outsourcing is not a new phenomenon, but it has evolved and come a long way from its origins — and is, in a sense, entering a more collaborative era, one that treats the center as a valuable competitive weapon. As call center outsourcing has become more widespread and more important to customer relationships, companies and vendors have learned a number of lessons about how to best approach the practice. These include the following:

Establish rigorous governance processes

Outsourcing agreements should be detailed enough so that both parties have an absolutely clear idea of their responsibilities and are working with the same expectations in terms of performance and results. At the same time, however, such arrangements should provide the flexibility needed to deal with unexpected changes and new challenges and opportunities that are more than likely to arise over the life of the agreement. Written contracts can’t encompass every possible eventuality, so agreements need to include mechanisms for assessing change and making midcourse corrections. Governance processes should regularly monitor performance, acquire input from clients’ business managers, and establish regular interactions between the two companies’ managements — with the goal of ensuring that the call center operation continues to deliver what the client needs in a changing environment.

Balance cost control with customer experience requirements

Call center outsourcing has traditionally focused on cost savings. But at many companies, 70% or more of customers will contact the company through the call center, making it a strategic tool in the effort to build customer relationships. With that in mind, companies should be alert to short-term cost-control measures that can lead to other (and often significant) costs in terms of dissatisfied and defecting customers and lost sales opportunities. Investments should focus not just on internal efficiencies but also on providing speed and accuracy in execution.

Ultimately, enabling call center reps to serve customers as quickly and effectively as possible can help drive customer retention and the expansion of business. In essence, companies that get the most out of outsourcing will not approach the call center as a “commodity” operation. Instead they will work with their vendor to use the call center as a vehicle for differentiating themselves in the marketplace and as a focal point of superior sales and service.

Approach offshoring with care

Moving call centers to overseas facilities can clearly reduce per-call costs. But when it comes to inbound customer-care centers, offshoring has the potential to create problems due to differences in language, culture, escalation processes, and training. Indeed, some major companies have pulled customer-facing centers back from overseas in response to customer complaints about service. In addition, the cost savings from wage differentials are often offset to some degree by the costs of managing and overseeing distant operations. All in all, such problems aren’t insurmountable — but they do require special consideration and a full understanding of the risks as well as the benefits.

Think long term

Business is fraught with planned and unplanned changes, and it is important to ensure that your call center infrastructure will provide the flexibility to meet business needs over time. Companies need to think about how their call-center-related needs are likely to evolve in the coming months and years and prepare for what is likely to transpire. It’s also important to consider business continuity issues for call center operations. Is there sufficient remote backup capacity in case of a natural disaster? Are data protected adequately? In that same vein, do the call center operations provide the scalability to handle sudden changes in workload due to events such as product recalls or unanticipated demand for a new offering?

Focus on employees as well as customers

The connection between satisfied employees and satisfied customers is well established, and that connection is especially strong in call center operations. After all, unhappy reps will find it difficult to provide a positive customer experience. For high morale, the basics need to be in place — good working conditions, decent pay, recognition programs. Lack of advancement opportunity is often cited as a cause of low worker morale, but that problem is often alleviated through outsourcing, because the vendors’ employees are working in an area that is a core competency for their company and therefore one with room for growth. Companies can also enhance morale by offering cross-training in technical or other disciplines and by making sure there are clear career paths and solid development opportunities for high performers.

These are general guidelines for management. In practice there is no single right answer for every outsourcing arrangement. But companies can supplement these guidelines with an understanding of their own goals and strategies, by benchmarking other companies’ outsourced call centers, and by exploring possibilities with potential outsourcing vendors.

Gold standards

With any outsourced business process, the way performance is measured is key to the success of the outsourcing relationship and the process itself — and that is particularly true when it comes to inbound contact centers. As these facilities have come to play a critical role in a company’s relationships with its customers, the measurements used to track their performance have evolved as well.

Increased efficiency has always been a fundamental part of the call center equation. Traditionally this was because the call center was largely viewed as a tactical customer service necessity and, therefore, seen as a cost center. But even as call centers take on a more strategic role, standards that focus on driving internal efficiencies are still important, simply because intense competition in most industries makes cost control critical across the company. Contact center operations can be gauged through a number of such measurements, including

  • cost per call/cost per minute
  • average time to answer calls
  • calls abandoned
  • calls escalated beyond service representative, and why
  • issues handled in one call
  • average call-handling time
  • average postcall administrative time
  • employee turnover

Such measurements may seem fairly straightforward, but they need to be used carefully — and reassessed from time to time — to ensure that they are encouraging the performance the company wants. This is not always simple. For example, an increase in employee turnover may, on the surface, seem like a problem, but it may actually be a positive indicator if the turnover is the result of an active internal recruitment program that encourages the best performers to move quickly into more-rewarding roles. Similarly, more time spent on the phone with the customer may not be a negative if that extra time is making it possible to deal with a customer issue in one call rather than two or three calls.

There is a growing trend in call center management to add a focus on measuring the quality of service to such quantitative factors as time and cost per call. In keeping with the call center’s growing customer-relationship-building mission, many companies are emphasizing customer-oriented measurements, such as customer complaint rates, customer satisfaction, customer retention, and cross-selling rates. Here are three proven tactics to help make sure that the outsourced call center is reaching and serving customers effectively:

Monitor calls jointly

Although call monitoring is a widespread practice, some outsourcers make sure that the senior managers of both the client organization and the outsourcing service collaborate on listening to and assessing individual calls (either live or recorded) to improve performance. To get a broad, business-oriented perspective, it is especially useful to set up a multifunctional group that might include the client’s vendor management, operations, and quality-control personnel as well as the outsourcer’s operations managers, front-line call-center supervisors, and perhaps corporate management.

Employ “mystery customers.”

In the same way that brick-and-mortar retailers use undercover mystery shoppers to report on the shopping experience at their stores, contact centers can have trained assessors call in with typical customer issues, giving the company a window into the customer experience. These investigations can help identify not only problems with individual customer service reps but also more-systemic problems, such as reps having insufficient access to information or automated routing systems that are too complex.

Ask your customer

Customers’ feelings and satisfaction levels can be gauged directly through postcall phone surveys — often conducted by an independent research company. In many cases, such surveys can be handled with automated systems that quiz customers immediately after a call. This makes it possible to conduct more surveys, ensure consistency in the survey process, and analyze electronically tracked results.

Each company’s goals and challenges are different, so any approach to measuring call center performance needs to be tailored to the specific situation. Typically an outsourcing vendor can work with the client company to make sure measurements are in line with the desired business performance.

Finally, it is critical that a company have a solid grasp of the call center’s “as is” performance before setting up new benchmarks. That means that a company needs to assess its current customer service levels and full in-house costs associated with the contact center. Doing so will establish a solid baseline that both the outsourcer and the client company can use to accurately gauge performance improvements and understand the true value that the outsourced call center will deliver.