It is somewhat of a balancing act for businesses when it comes to the offshoring of their operations because, whilst it is inevitably cheaper to offshore call centres, it is often at the cost of customer loyalty because many customers are irritated by offshoring practices.
Offshoring is becoming increasingly commonplace in many industries but, of course, the industry which offshoring is most prevalent within is that of contact centres. Unfortunately, however, the practice of offshoring is often to the detriment of customer retention because most don't like having their requests, complaints and queries being dealt with in an overseas call centre. It is clearly apparent that a business needs to keep its customers happy if it is to be a success in the long run but much recent research has pointed to the problematic relationship between offshore call centres and customers based in the UK and the inevitable consequence is that customer relations are damaged and the level of loyalty demonstrated to the company in question dwindles. With this in mind, it is clear to see that it can be a difficult decision to weigh up the pros and cons of offshoring in relation to how likely it is to jeopardise relations with a business' client base.
Offshoring – Looking at the Key Problems
One company that recently explored the viability of offshoring their business operations, Customer Consulting Ltd (CCL), made some interesting discoveries regarding the financial implications which can arise from taking the decision to operate contact centres offshore for UK based businesses. Speaking of their findings, CCL's managing director, Simon Rustom, stated, “Our research shows that the cost of running a full end-to-end customer contact centre in India - including both the ‘back office’ administration and ‘front office’ voice elements of telephone calls, emails and faxes to customers and potential customers - is some £18m a year”. There are two sides to every story and the same is true with offshoring and Rustom goes on to state, “On the other hand, the cost of bringing back the ‘voice’ (front office) element of the operation to the UK, leaving the administration in India, is some £21m. However, according to our research, this results in increased customer satisfaction and higher levels of customer retention. Indeed, our research reveals that the cost of customers lost through using India-based contact centres is some £12m a year.”
Offshoring – Providing the Right Service for Customers
It is, of course, imperative that a business does everything that it can to make sure their customers remain satisfied with their performance, even if this isn't the cheaper option. With this in mind, CCL came to the conclusion that they would keep their administration practices offshore but wouldn't risk offshoring their front end operations through fears it would compromise their relationship with their customers. This problem with offshoring isn't limited to the call centre industry and almost any type of industry which engages in offshoring should think about the long term consequences of losing customers as opposed to the short term cutting of costs. http://en.wikipedia.org/wiki/Offshoring