Twice in the past month, I have seen the word "bigotry" used in relation to customer backlash to offshore call center outsourcing. The first was in CFO.com's article "Customer Disservice?" The article discusses negative customer reaction to offshore call centers by callers to a radio talk show in San Francisco. Given that San Francisco is one of the most diverse and tolerant cities in the world, participants in the talk show were shocked at how many people were complaining about offshore call centers.
The second reference comes out of the U.K. as a result of comments made by a BT executive about customer reactions to offshore call centers. BT's chief procurement officer labeled certain customers as "bigots" for the way they treated Indian call center staff. A follow-on article, "Best of Reader Comments: BT slams offshore 'bigots'" highlights several customer reactions to the comments. The comments ranged from, "Am I a bigot because I expect to be able to be understood?" to "they're not empowered to do anything when a problem falls outside their range of scripted scenarios." It is clear that a large number of customers are not happy with the service and were not happy with the label of "bigot."
Purdue University's Center for Customer-Driven Quality conducted a survey in 2004 of 721 U.S. consumers on the subject of offshore outsourcing. The survey revealed that 65% of American consumers would alter their buying behavior toward a company if they knew or had the impression the business was using an offshore call center, regardless of the level of satisfaction the customer received from the call center experience. This response was found to be consistent across all call categories - high value calls (product information, purchases, reservation), low value calls (account or order status), technical support, and complaint calls.
Customer backlash will not reverse the offshoring trend directly. If companies can cost justify the move offshore, and they believe "everyone is doing it," then there will be no perceived risk in putting off customers' concerns. However, I think that over time customer backlash will cause some companies to hear the voice of the customer and realize that they can differentiate their service with domestic call center representatives.
Like with many trends, the pendulum swings wide. The swing toward offshoring started with companies taking the low cost strategy where offshoring the call center makes sense to deliver the low cost product. As other companies move to off shore call centers, all companies benefit from the lower cost, but service levels may drop. Lower service on products not positioned as low cost is a bad deal for the consumer. When the market has had its fill of poor service, the pendulum will swing back the other way. As painful as continued growth in offshore call centers may seem to the economy, I believe market conditions will reverse the trend.
Call centers have a direct customer touch, so offshore call center decisions are ultimately exposed to customers. Other forms of business process outsourcing, and a new growth area, knowledge process outsourcing, are not so transparent to customers. These functions also involve higher cost workers and could reflect both bigger savings to companies using the services as well as a longer term and more significant shift in the labor market. Knowledge process outsourcing is the topic for next week.