Why do offshoring and outbound telemarketing have poor reputations among consumers? One explanation is that these practices, in the way that organizations employ them, often seem to be at odds with what we as consumers perceive to be our needs.

The price of a product usually includes the cost of receiving service. If consumers want items or services that cost less, then they are inadvertently demanding that companies lower the cost of service. To fulfill this implicit demand and maintain viable margins, companies have two options: use technology to automate service, and find ways to reduce wages for those who assist customers. It is apparent to anyone who has dealt with call centers that these are the primary options companies have chosen for inbound, customer-service calls. But how does this same economic principle apply to outbound calls—services that customers may not have been requested?

That’s the catch: Consumer and business-customer tolerance for unsolicited calls is notoriously low. In the wake of the National Do Not Call Registry, many firms have pulled back on any form of outbound calling—from any location. Yet offshore, outbound BPO is gaining renewed interest because it offers corporations a chance to push innovative new services to customers at price points that make once unthinkable ideas, especially in the realm of customer-loyalty programs, possible.

The biggest problem with thinking about offshoring strictly in terms of saving labor costs isn’t that these savings diminish over time; it’s that lower costs don’t add any value. The same is true with outbound efforts such as telemarketing—they’re only effective when companies and their customers both perceive these efforts to be valuable.

If there is a potential benefit of offshoring, it’s the dissemination of best practices that transcend the locations where they occur. The implications of this approach apply not only to offshoring but also to outbound communication, in terms of bridging the gap between what companies want from customers and what customers want from companies. This isn’t a widely understood principle.

“Other than [reducing] labor costs, I do not know of any value,” says Kathleen Kelly, CEO of TeleDirect International, a Scottsdale, Ariz., developer of predictive dialing systems. Frank Fuhrman, VP of marketing with the service bureau American Customer Care in Bedford Hills, N.Y., acknowledges that offshoring “does indeed lower the cost of labor,” and finds that this practice “is part of the teleservices mix.” But he also says that he’s “seen more and more clients coming back from offshore.”

So where is the value that offshore telemarketing ought to bring? The answer: With telemarketing, or any other outreach to customers, the value isn’t in the location or in low wages; it’s in the communication itself. Here is another way to think of it: If money were not a major barrier, what innovative new services would you begin to offer your best customers? Would you remind a customer to buy his or her spouse an anniversary gift? Would you prompt them when it’s time to book a vacation? Would you verify more purchases to help reduce credit-card fraud?

	Sourcing In this report prepared by the editors of CMP Media’s Call Center Magazine, a range of global-sourcing experts were asked whether originating customer calls overseas improves outbound communication beyond reducing labor costs. It’s a loaded question, and it yielded responses from a half dozen call centers—on and offshore, call-center product suppliers, market observers, and corporations with offshore call-center operations, among others.

Outbound Upswing

Lynne Levy, principal product manager with Concerto Software in Westford, Mass., a developer whose products include predictive dialers, says that due to Do-Not-Call legislation in the U.S., “the number of people that organizations can call for telemarketing purposes has decreased.” With this in mind, Levy explains, these organizations “need to look at their base of customers and approved prospects and be creative in approaching them with new opportunities.” Levy characterizes these efforts as “cross-selling and up-selling new services and products that they might find beneficial.”

As she cautions, “it is important when this occurs, however, to not make the customer feel like he or is being sold to, but rather that the customer sees the added value in the opportunities presented.” The worst thing companies can do, says Levy, “is to frustrate the customer and have him or her ask to be put on your internal do-not-call list.”

What offshoring and outbound telemarketing have in common is that they engender in customers not demand, but rather the desire to curtail or even eliminate these practices entirely. Many companies have tried to minimize backlash from consumers by segmenting certain operations, so that, for instance, they bring technical support for individual consumers offshore while providing technical support for corporate entities closer to where these entities are located. Companies are also striving to keep what they understand to be strategic—like customer service—onshore, while moving processes they consider to be tactical—like telemarketing—offshore.

But such segmentation doesn’t automatically make offshoring or outreach to customers more effective. The best example we’ve seen of a company that successfully combines offshoring and selling (without telemarketing) is Alaska Airlines. Rather than opting to employ call-center agents in locations where wages are lowest, the airline has brought a strategic process, namely evaluation of agents’ conversations with customers, overseas.

The evaluations come from people located in India, but the agents serve customers from the U.S. What’s more, the evaluations emphasize strategic objectives; among the skills that the evaluators factor in are whether agents encourage frequent-flyer customers to sign up for the airline’s credit cards. Ultimately, the value of a customer conversation, and not just its cost, is what should emerge as your primary gauge of performance.

Source: TrammellCrowCompany