The allergic reaction to nearshore and offshore call centres
From the editor: Whilst this article was authored by Nick Jiwa who is based in the USA, the concerns and sentiment regarding the use of nearshore and offshore call centres remain the same in Australia.
In sharing this article with permission from Customerserv we hope it highlights that the topic of contact centre outsourcing to a country other than your own is always a hot topic no matter which part of the world you live in.
“Hell no” is often the first reaction when someone in your budget meeting says:
“Why don’t we cut costs by outsourcing our call centre offshore?”
The visceral response is understandable—in fact, most of us probably had a similar “first” reaction to offshore call centres.
I remember when the idea was initially proposed to me in the very early days of offshoring (circa 1995)—my immediate reaction was pretty negative.
Today, nearshoring and offshoring are ubiquitous and mainstream for those of us who “live” in the call centre/BPO industry and are very familiar with the globalism of call centres.
But those who are less familiar often find it challenging to warm up to the idea of their valuable customers talking with call centre agents in a foreign country.
Common concerns with offshore and nearshore call centres
After many years of counselling and guiding client-side decision-makers, we find the “allergic reaction” to offshore and nearshore to be rooted in the following:
- Voice quality concerns — language barrier, communication and cultural differences.
- Information void — lack of understanding of the pros and cons of working with call centres located outside of the USA.
- Brand damage — customer service and customer experience issues.
- Bad experience — previous horror story with a nearshore or offshore call centre.
- Perception — the unshakable vision of heavily accented agents pissing off customers.
- Data security worries — customer data theft, data breaches, etc.
- Scalability — concerns that overseas call centres can’t meet staffing requirements.
- Safety — State Department warnings and personal safety dangers.
- Geopolitical — government policies, unstable political leaders, terrorism, etc.
- Business continuity — weather events, business disruption and related issues.
- Media hype — news stories that portray outsourcing as the “evil” job stealer.
- “Buy American” — companies with a strong U.S.-only mandate.
With these and other concerns, it is understandable that some corporate leaders are leery about using overseas call centres.
So let’s try to separate perception from reality.
The attraction to nearshore or offshore call centres
The primary objective for using a nearshore or offshore call centre is cost savings along with other potential advantages like the availability of college-educated agents, multilingual services, redundancy and staffing flexibility.
And, proponents of near- and offshore believe that the call centre agent “job” is more “valued and appreciated” outside of the United States; therefore, agent turnover and performance levels might be better than in U.S. call centres— a view, among others, that can be debated both ways.
The availability of lower cost global call centres does not mean all of them are bona fide.
There is a clear delineation between vendors that are Tier 1 market leaders, in comparison to vendors that are Tier 2 and Tier 3—those that have a less attractive operating model.
- Tier 1 nearshore and offshore call centre vendors are higher quality organisations that we strongly prefer.
- Tier 2 and Tier 3, lower quality firms, don’t often invest in basic operating tools such as quality control, training, workforce management, infrastructure, business continuity, etc. and are riskier options.
We will continue to highlight the differences between these types of firms throughout this discussion.
Is it possible to move past a bad experience with a call centre vendor?
Even a single bad experience with a nearshore or offshore call centre can turn stakeholders against the idea, rendering the strategy anathema.
Yet, quite often, foundational problems within the prior vendor relationship contributed to the poor outcome.
Perhaps the client signed up for an unsustainable low price or a lower-grade (Tier 2 or 3) outsourcer that lacked the delivery mechanism to support the client’s needs.
Or even if the client picked a Tier 1 vendor (higher grade), it could be that the provider simply wasn’t the right match, or that the particular line of business could not be adequately serviced outside the United States.
A bad experience can also be attributed to overreach—trying to sprint before learning to walk.
If stakeholders are already nervous about moving call centre support outside of the USA, it might not make sense to go right to the Philippines or to an emerging offshore market that is still in its infancy.
Distance and other “learning curve” issues might add to the client’s anxiety, so it might be more prudent to test the waters nearshore first—closer to “home”.
The ability to make frequent visits to a nearshore site and develop a close working relationship would help to help alleviate many concerns.
Common perceptions about nearshore and offshore vendors
A common perception is that call centres outside the USA cannot provide the level of professionalism that American consumers expect.
There is some truth to this.
Not all lines of business or call types can be properly serviced outside of the USA—causing many companies to repatriate their call centres back to the USA.
Again, an argument can be made that perhaps the wrong nearshore/offshore call centre vendor was selected in the first place.
Or if the overseas location was a captive or company owned site, perhaps the wrong site location was selected.
Again, many variables need to be examined. On the other hand, despite customer upheaval and even revolt, some companies can’t afford to, or, they simply won’t move their call centre support back to the USA. What then?
As consumers, we have all had our share of frustrating experiences with offshore and nearshore call centres.
But many of us have also experienced issues with U.S.-based call centres as well.
There are myriad reasons for poor customer experience at any call centre, anyplace in the world and so we have to put things into proper perspective.
Blanket statements or hyperbole suggesting that “all” nearshore and offshore call centres are bad is simply inaccurate.
The truth is, because of the stigma attached to them, nearshore and offshore call centres that are focused on delivering an excellent customer experience (Tier 1 firms), often have to work harder to impress U.S. clients.
What do “Tier 1” nearshore and offshore vendors do differently?
Leading nearshore and offshore call centre vendors invest heavily in their people.
For example, some of our vendors have “paid” English language academies which they utilise to attract and retain talent.
Employees receive compensation for completing the curriculum at these academies as part of the vendor’s investment in developing English language skills for a successful call centre career and beyond.
In the most successful nearshore and offshore client-vendor relationships, both sides work in close collaboration and are in simpatico.
Contractual terms notwithstanding, communication between the parties is open and transparent—enabling them to effectively deal with speed bumps and challenges, which will happen in every outsourcing relationship.
Key features of Tier 1 providers include:
Tier 1 providers are either U.S.-based vendors with domestic and overseas sites, or, they are organisations that are headquartered nearshore and offshore but with a delivery model that rivals best-in-class U.S. call centre BPO firms.
Tier 1 vendors invest heavily in process and infrastructure such continuous training, attractive and “people-friendly” call centre sites, agent retention, community involvement, data and site security, advanced technology, business continuity, responsive client account teams, value added tools and other critical areas.
Some of our vendors provide transportation services and on-site amenities like childcare and medical clinics.
Tier 1 outsourcers do not cut corners the way that Tier 2 and 3 vendors do.
As a client-side outsourcing decision maker, if the main goal at your company is to find the cheapest vendor with a “butts-in-seats” mentality, irrespective of quality, there are plenty of these vendors available around the globe.
“Expatriate” influence and contribution are very strong at Tier 1 vendors, enabling U.S. call centre leaders to play an active role in the development and success of the nearshore and offshore staff.
Vendors have introduced practices like video focus groups and virtual onsite tours to help reinforce the client’s brand, mission, values and customer engagement mandates within the outsourced site(s).
Some vendors and even clients go so far as to require an “English only” policy on the call centre floor, requiring everyone from the call centre agents to senior management to only communicate in English.
Many Tier 1 outsourcing firms also have certifications such as PCI, ISO, SSAE, etc., and are fully compliant with TCPA (Telephone Consumer Protection Act) regulations and other compliance.
Tier 1 vendors tend to have more “Tier 1 clients” with high standards of excellence that they demand from their outsourcing vendors.
Such clients include Fortune 500 companies to multi-billion dollar healthcare organisations to iconic Silicon Valley brands and beyond.
These clients outsource a wide range of services from highly complex and technical interactions to more transactional.
Making the right decision
Bona fide nearshore and offshore call centre vendors can reduce outsourcing costs from 30% to 50% compared to U.S. vendors, depending on the country location, the agent skill set required and contract size.
However, as stated earlier, price alone should not drive the decision to use a nearshore or offshore call centre.
If nearshore and offshore costs are lower but your selected vendors underperform, then it defeats the very purpose of outsourcing globally.
In some instances, you might end up paying more as a result of incorrect vendor selection.
Remember, all metrics count when choosing and managing a call centre vendor or site location outside of the USA.
When evaluating prospective nearshore and offshore call centre vendors, your due diligence process is absolutely critical.
A good rule of thumb is to make sure that your nearshore or offshore call centre vendor provides everything (and more) that a Tier 1 U.S. vendor provides, and view the lower price simply as an added bonus.
Recommended reading: Guide to call centre outsourcing in Australia
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