Outsourcing Your Customer Service Operation

Outsourcing Your Customer Service Operation

By Eli Willner, President, Trebuchet Outsourcing Services, Inc.

Customer Service – In or Out?

 In our previous article we defined “outsourcing” and discussed its general benefits to your business. We also provided guidance on how to select a good outsourcing partner. In this article we discuss one of the most common and effective areas of outsourcing – customer service.

Many companies treat customer service as an afterthought: they focus on product or service development, business development and of course sales and collections but take for granted that customers will understand how to use their product or service without assistance – and that problems will be infrequent and simple to resolve.

Thus the default “solution” to handling customer service is to handle it in-house, in the naïve belief that it can be handled as a secondary task by existing personnel – maybe even by the front desk receptionist! Unfortunately this usually doesn’t work out, for several reasons.

1)      Talking to customers in a manner that makes them feel that solving their problem matters to your company and that they are valued is a skill that not everyone has

2)      Communicating in a manner that is clear and easily understood is not a skill that everyone has

3)      Not everyone on your staff understands the nuances of your product or service and has the knowledge that senior management takes for granted

4)      Ad hoc customer service means that there will probably be times when no one is available to deal with customer issues, leaving your customers angry and frustrated

5)      Your employees will soon resent the continual interruptions of their primary tasks to deal with customer support issues and that resentment will inevitably come across to your customers

In fairly short order your employees will find excuses to avoid customer service. Customer dissatisfaction will become rampant and negative reviews of your product or service will start appearing on social media. Clearly not a desirable state of affairs!

In contrast, good customer service will enhance the stature of your company and its offerings. It can even turn the “lemon” of an unanticipated bad situation, like a faulty product, lack of stock, late delivery, etc. into “lemonade” by giving the impression of a caring company that is contrite about inadvertent missteps and intent on setting things right for their valued customers as quickly as possible.

Good customer service is a discipline that requires native skill, training, adequate staffing and the right tools in order to be done effectively. It requires a dedicated department, professionally staffed, equipped, housed and trained. But most companies lack the personnel or the know-how to build their own well-equipped customer service departments. And truthfully there is little reason to go through the effort to recruit the right personnel and to build the skill sets necessary to run a good customer service center. There are professional organizations with the infrastructure already in place that can do the job as well or better, without the management headaches, and usually at lower cost.

We will describe the kinds of things that a good customer service operation will have in place. Look for these things when you research customer service alternatives. The three key elements of a good customer service operation are,

1)      Robust systems and tools

2)      Rigorous human resource and recruiting standards

3)      Scalability

Systems

A key ingredient in good customer service is systems. This means two things:

1)      Rigorous pre-planning to assure that all possible customer service scenarios have been anticipated, and that detailed responses to them have been prepared

2)      A state-of-the-art computerized infrastructure that efficiently routes calls, provides assistance to customer service agents when they respond, collects information about the incident and the client, records all customer service activity and produces meaningful management reports that enable the improvement of your product or service, as well as the improvement of the customer service experience.

Pre-Planning

Pre-planning begins at project inception. The client/project onboarding process is critical to a successful customer service engagement. A good customer service facility will have a well-defined process for learning the product or service they will be dealing with. They will meet, face-to-face if possible, with any existing in-house customer service personnel. They will meet with senior management and with product/service development teams to learn as much as they can about the product and service – where it is now and it’s anticipated future direction.

They will identify the issue that your customers are currently facing and attempt to anticipate issues they might be facing in the future. They will document these issues along with suggested resolutions. They will identify situations that might require escalation to your own development staff.

Finally, they will examine any documentation you might have and augment it by documenting their own findings for use by the team designated to support your products/services.

Infrastructure

Today virtually all modern customer service facilities employ sophisticated computer-based systems to manage and track customer service activities. These are either dedicated in-house systems or – more common nowadays – cloud-based systems with similar functionality. Cloud based systems are preferred because they shift the burden of maintaining the hardware and software to a firm whose sole business is running that system. They also provide a wider array of accessibility options to the support center.

Whether dedicated our cloud-based, configuring and running a computerized customer service system does require expertise – another reason to farm out your customer service work to a professional organization that does customer service for a living.

Computerized customer service support systems have revolutionized the industry. These systems can intelligently route calls or tickets to the appropriate agents, minimize customer wait times, assist agents by providing on-screen prompts for follow-up questions and solutions, automatically collect information about calls, and enable the collection and databasing of additional customer information. They also provide valuable reports that can be used by customer service center management to gauge agent effectiveness, and by clients to identify common customer problems, enabling the improvement of products and services.

Staffing

Of course the best systems in the world are no better than the people who are using them. These are the people who directly interact with your customers and cause them to have either favorable or unfavorable opinions of your company. A good customer service provider knows how to recruit agents with personality and experience profiles who will give the best impression of your company. They look for people who are inherently cheerful, patient and altruistic – people who achieve satisfaction when they can assist others.

They look for people who pick up new concepts quickly – to assure a quick project onboarding – who are educated, good communicators and who are culturally similar to your client base. There is nothing more off-putting to a customer than to deal with a foreign accent or with someone who is culturally foreign to them! In today’s world economy many good customer service centers employ agents from diverse language and cultural backgrounds in order to service a diverse customer base.

Training

As part of the onboarding process the customer service center will carefully identify the right personnel to handle your project. Here is where good pre-planning, as described earlier, really shines. The materials gathered during that process are used to train the staff that will be supporting your customers in your products/services, issues and resolutions.

For more complex projects/services training with your own staff might be advised. This can usually be accomplished remotely, using Skype or similar video conferencing software.

The customer service center will work with you to determine the optimum size of your team based on current and anticipated demand, typical call or ticket duration and other factors. However good centers will cross-train additional personnel so that unanticipated peaks or staff absences can be handled smoothly and without negatively impacting your customers’ experience.

Scalability

Anticipating load isn’t an exact science. In many industries customer service load is seasonal but it can also be seemingly random. Of course you hope and expect that your business will grow, meaning that customer service demand will grow as well.

In addition to peaks there may be valleys – slow times or slowdowns. You want these peaks and valleys to be completely transparent to your customers and a good customer service center will accommodate by cross-training additional staff to handle peaks, as mentioned earlier, and by quickly re-assigning agents on either a temporary or permanent basis, to other projects.

Methods of Handling Customer Service

Finally, a quick word about methods of handling customer service. By their nature, many products and services call for an immediate response to customer problems and in that case telephonic customer service is a requirement. More and more, though, businesses are realizing that for many products and service an immediate response is not a prerequisite and in that case less expensive web-based chat may be an option – it is also real-time – and if the need for immediacy is even lower web-form or email customer service may be perfectly adequate. Response times for web-form/email customer service can vary from an hour or two to a day or two depending on need. Of course the longer the permissible lead time, generally the lower the cost.

Summary

Customer service should be considered an integral part of every business plan and not treated as an afterthought. Good customer service is a discipline in its own right. For many companies it is most efficiently and economically handled by outsourcing to a professional customer services firm with the attributes described in this article. Good customer service pays for itself in enhanced customer good will, leading to increased sales.

Author bio: Eli Willner is Founder and President of Trebuchet Outsourcing Services, Inc., a 5-year old US based corporation with a work force consisting of American and other Anglo professionals currently living in Israel. He has been involved in outsourcing for more than 15 years and has also managed outsourced workforces in India, Philippines and Sri Lanka. Eli authored the article, “Is Outsourcing for Me?” in a previous issue of this publication. He can be reached at eli.willner@trebout.com. 

Is Outsourcing For Me?

Is Outsourcing For Me?

By Eli Willner, President, Trebuchet Outsourcing Services, Inc.

What is Outsourcing?

As a small or medium-sized business owner and entrepreneur you are continually looking for ways to squeeze maximum value out of your dollar and you may be wondering whether outsourcing can benefit you. I run an outsourcing company and I’d like to educate you about outsourcing so you can make an intelligent decision about whether or not outsourcing is for you – and if you decide it is for you, this will assist you in finding an outsourcing partner.

First, let’s define “outsourcing”. Outsourcing is the process of identifying certain business activities of and contracting with another company to handle those activities for you rather than doing them in-house. What kinds of activities might you want to outsource? There are four general areas:

1)      “Non-core” activities – These are activities that are crucial to your business but don’t involve the special expertise or experience that your business, in particular, brings to the table. Let’s say, for example, that your business manufactures and sells widgets. Your focus, naturally, is on making sure that you have the best widgets, that they are competitively priced, that they reach the right markets, etc. These are your core activities.

Things like billing, accounts receivable, payroll, collections, etc. are critical to the running of your business but are not “core” – they are standard business activities. Rather than distracting yourself by recruiting and managing a staff to handle those functions you might want to consider contracting with an outsourcing firm that specializes in those activities to handle them for you. This allows you to maintain your focus while not neglecting the standard functions without which a business cannot exist.

2)      “Bread and butter” activities – These are activities that require some level of training and skill but don’t require a long onboarding period and don’t vary much in challenge from day to day. Some examples:

a.       Product research and database maintenance (such as finding out detailed data about products you sell so that you can provide that information to your customers)

b.       Business-to-business or business-to-consumer telemarketing (this is a big outsourcing area)

c.       Transcription (financial, legal, medical, broadcast)

d.       Online and phone based customer service

e.       Editing (reviewing and correcting material for publication, including marketing material)

These are just illustrations; the list goes on.

There are several advantages to outsourcing these kinds of activities. First of all – and this is often cited as the major benefit of outsourcing – it’s usually less expensive to outsource these activities than it is to do them in-house.

But cost isn’t the only or even the most important benefit. Let’s consider telemarketing as an example. Telemarketing is a discipline in its own right; the difference between a professional telemarketing operation and an ad hoc home-grown effort can be the difference between marketing success and abject marketing failure. An outsourcing firm with a solid telemarketing team provides professionals who know how to sell by phone and have proven track records – they will do a much better job than a team you recruit and hire in-house. Moreover the outsourcing firm will have sophisticated tools to manage the calling and reporting processes that most firms can’t afford in-house.

Similar considerations apply to customer service and the other services in this category, mentioned above.

3)      Seasonal activities – These are similar in nature to bread-and-butter activities but are seasonal in nature rather than ongoing. For example a training program that runs several courses per year will need assistance handling course registration but only in the weeks leading up to the start of a new course. Or, a larger company may some level of customer service capability but that level is inadequate for busy seasons.

In both cases it’s more effective to outsource the seasonal load (or overload) to avoid the HR overhead of continually recruiting and training temporary workers. An established outsourcing firm will anticipate their clients’ needs and will have “rolling” staff that are moved from project to project within a particular domain so that they can always provide their clients the seasonal coverage they need. Typically, most of the staff assigned to a particular project will have worked on that project last season – and a good outsourcing firm will handle any necessary training and monitoring for new staff in a manner transparent to the client.

4)      Special expertise activities – These are activities that require specialized skill and training and are typically used to augment a client’s in-house staff. For example, a law firm might utilize a legal outsourcing firm to supply qualified attorneys for research, drafting briefs, document review – activities that would otherwise be done in their law library – but can be done just as effectively, and far less expensively, in an outsourced mode. Companies that do software development often utilize outsourced programming talent to supplement or even replace their in-house staffs, again enjoying lower costs without sacrificing quality.

Outsourcing’s “Bad Rap”

Unfortunately the word “outsourcing” has developed some negative connotations over the past few years, for a variety of reasons. First, many people have heard horror stories about outsourcing engagements that went bad, causing financial loss to hapless clients. Second, outsourcing has come to be viewed in some circles as unpatriotic or as exploitative.

There is no question that there are outsourcing horror stories resulting from “bad apple” outsourcing shops but that’s no reason to condemn on a wholesale basis a valid business practice that can save your business money and enable it to grow, and to provide services, that would be impossible otherwise. The key is in knowing how to choose an outsourcing partner wisely. We will provide some pointers that will hopefully help in distinguishing reputable shops from the shysters.

There are those who argue that outsourcing provides jobs to foreign workers that would otherwise go to Americans, so outsourcing is “unpatriotic”. There are several things wrong with that argument. First, “outsourcing” does not necessarily imply offshore outsourcing – companies can outsource work to American outsourcing shops as well as to foreign companies.

It is true, though, that the major cost savings can be achieved by outsourcing to companies with an offshore workforce, located where labor costs are less expensive than they are in the USA. But is that really unpatriotic? Consider that companies are budget-driven. If a company has $X available for a telemarketing campaign and $X buys them twice as many calls offshore as it would in the USA, that translates to twice the potential sales to the company – and to twice the production, which produces more revenue, more jobs, more consumer spending and more tax dollars.

More fundamentally, though, in the 21^st century international commerce is the default way of doing business. Companies that don’t allow themselves to benefit from the cost savings of working offshore will be driven out of business by competitors that do participate in the international labor market and enjoy lower costs, higher margins and the ability to offer better end-user pricing.

And lower offshore wages do not translate into “exploitation”. Offshore workers aren’t slaves – they compete in an open labor market and typically live comfortable middle class lives in accord with local standards. Sure, no one wants to outsource work to a Chinese prison labor camp – and no one has to.

How to Pick an Outsource Vendor

Here is a list of 10 points to look for when shopping for an outsource vendor:

1)      Look for a company that has been in business at least 3 years

2)      Always ask a company for US client references, preferably references who have used services similar to the ones you need

3)      Ask if you may view the credentials of and interview your proposed offshore team lead

4)      Ask about the experience level of your individual team members on projects similar to yours

5)      Expect a serious business analysis – it is a good sign if your prospective outsourcer asks a lot of questions, makes suggestions and seems genuinely engaged in understanding not only the particular project you are bringing to him but also your larger business needs

6)      Ask for a quotation and be sure that there are no hidden costs. Basis for pricing may be per man-hour, piece of work or other metric, depending on the project. If possible get several quotations and be sure that they are pricing on the same basis so you can compare pricing “apples to apples”.

7)       Beware of cultural or language or accent issues. This is especially a consideration when working with third-world outsourcers. On one project an India-based staff was asked to categorize newspaper ads (real estate, auto, employment, etc.). An ad for a condo was classified as “auto”. Why? “Condos” aren’t common in India so the operator guessed that it was a car. Certain accents will be associated in your customer’s minds with low quality – so you don’t want to confront your customers with those accents in a customer service or sales scenario.

8)      If possible ask to visit or at least see pictures of your outsourcer’s facility. Home-based personnel are acceptable on certain projects, in carefully controlled circumstances. If your prospective outsourcer has no workplace at all, though, look elsewhere.

9)      Ask about your outsourcer’s quality control procedures. Expect a detailed QC and QA plan in writing.

10)   Ask about the chain of command. Who do you call if there is a problem? What is the problem resolution process? Will you have ready access to senior company management personnel?

Summary

There is a lot to be said about outsourcing but I hope I’ve given you an idea of what outsourcing is all about and started you thinking about how it can benefit your business and how you can start the process of utilizing this valuable practice to save your business money while increasing its capabilities.

Author bio: Eli Willner is Founder and President of Trebuchet Outsourcing Services, Inc., a 5-year old US based corporation with a work force consisting of American and other Anglo professionals currently living in Israel. He has been involved in outsourcing for more than 15 years and has also managed outsourced workforces in India, Philippines and Sri Lanka. He can be reached at eli.willner@trebout.com.

When and How to Outsource

Panel Response: When and How to Outsource

Grow From Inside Out

Congratulations to the correspondent for successfully making the transition to  his own business! Many have tried and failed so it’s a tribute to the perseverance and providence of the ones who succeed. Figuring out how to scale up is the best kind of business problem to have but it needs to be considered carefully so as not to jeopardize the success you’ve enjoyed so far.

My suggestion is to start by identifying those business functions that you do best and that you most enjoy doing (usually they are one and the same!) Those are the functions you delegate last, since they were the keys to your current success. You don’t want to kill the goose that laid those golden eggs! Let’s assume that you excel in business development – identifying good leads and using your persuasive skills to convert them to customers. For now you want to hold on to those functions.

Now, identify the other things that are taking up your time and keeping you from business development. Those could be customer service, bookkeeping, and other non “core” but still necessary business functions. My suggestion is to first hire someone in-house and offload those functions to them. Be very choosy in whom you hire and pay them fairly – you want them to be dedicated and loyal to your business long-term. Now, it may sound odd for a guy who runs an outsourcing firm (me!) to suggest that you hire someone in-house but I believe that a business should always have a microcosm in-house of all skills that it needs to function smoothly, before it considers outsourcing.

Train this person yourself, mentor them and oversee them closely until they are fully up to speed. This is a primary advantage of keeping your “understudy” in-house – they will be learning your skills by watching the master at work, directly and not second hand.

In time you will probably find that even after offloading the non-core chores, even the ones that you kept for yourself are becoming too much for one person to handle – of course, that’s also a good thing! When that happens follow the same advice – find someone who has a similar skill set to your own and carefully train them in business development, as you did your first assistant.

NOW, when the three of you start becoming overwhelmed, is the time to think about shifting some of the work out-of-house, to an outsourcing firm. This can be the non-core functions but if you want to continue to grow it will have to include the core business functions, like business development, as well. The transition has to be managed carefully but you now have two reliable in-house assistants who are intimately familiar with those tasks and can handle the transition for you.

Look for a firm that has been in business for a while, has performed similar functions for other clients and which is staffed only with educated Americans (right or wrong, people resent foreign accents and non-Americans simply do not understand American culture and business practice like Americans do). As for references. Start small and ramp up with your outsourcing partner gradually to assure that you are satisfied with their work before making a major commitment.

Best of luck and feel free to reach out to me directly if you have additional questions!

Eli Willner is Founder and President of Trebuchet Outsourcing Services (www.trebout.com), a multi-domain outsourcing firm with a workforce consisting of Americans living in Israel. He has managed outsourcing companies in several countries for over fifteen years and can be contacted at eli.willner@trebout.com.