Why Frontier Airlines' decision not to outsource its call center is a smart move

* Sometimes, outsourcing call centers hurts customer service

Last October, I wrote about mounting consumer dissatisfaction with offshore call centers. I suggested that some companies would come to the realization that they could differentiate their company through a high service model including in-house, real employee driven call centers. So you can imagine how pleased I was to see a story in the Denver Post about Frontier Airlines doing exactly that. What is even more interesting is that Frontier is considered a "low-cost" airline, and yet made a choice for higher call center costs to maintain high service levels.

Outsourcing can be a strategic advantage but it can also be a big mistake. It depends on how well the process is managed, the relationship with the outsourcer, and the overall strategic fit with the goals of the business. Outsourcing can even increase customer satisfaction and the value delivered when best of breed specialists are included in the process of delivering a product or service. However, it is interesting that one of the biggest areas outsourced has been the call center. When did customer interaction become so unimportant that it is shuttled off to another organization?

When the call center is not key to the customer relationship, but an after-the-sale support function, I can see the advantage of outsourcing to reduce the cost. If I need basic support where information can be quickly shared, I do not mind a professionally run outsourced or offshore call center handling the task. But when the interaction is key to a sale, key to the customer relationship or moves past basic tasks, it should be handled by in-house staff. Unfortunately, many companies do not see what Frontier sees - that customer service is better when an employee with a stake in the game is interacting with customers. And that such personalized attention can make a big difference in customer experience, which will translate into revenue and goodwill.

Too many companies are hiding behind their outsourced/offshore call center to avoid their responsibilities to their customers. Recently I had the opportunity to interact with an India-based outsourced call center for Compass Bank. The person I talked with was respectful, relatively easy to understand, and competent to deal with the first part of my reason for calling. However, as soon as we were outside of his scripted dialogue, he was no longer effectively helping me. Now, if there was a process in place for him to transfer me to someone at the bank with the authority to operate outside of the script, I would have been quite happy to speak with someone else at that point. Being the weekend, I would have been happy with a call back from someone with more authority, someone who could speak for the bank and make a business decision outside of pre-scripted scenarios. No process existed and all he could do was continue to repeat the same final step in his script, which was not sufficient to address my reason for calling.

Outsourcing done poorly can hurt your business. If you outsource your call center, make sure it is for basic information sharing interactions and always provide a path for your customers to speak to an employee of your company who has the authority to speak for the company. Customer service matters, and Frontier Airlines is making a point of putting its best foot forward with its customers by using its own in-house staff to interact with customers. The airline may outsource food service, reservations systems software development, IT systems management, etc., to efficiently run its business. But it has put the right priority on its customers and that will pay more dividends than 20% savings on call center costs.

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Copyright © 2006 IDG Communications, Inc.

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