Friday, September 28, 2007

The Ethics of Outsourcing Customer Service

It's a familiar scenario: A product you purchased recently has developed a problem, so you call the company's toll-free number and are connected to a "customer service associate" in India or the Philippines. You describe your problem but have a hard time understanding what the company representative is saying. You try several more times to communicate why you are calling but cannot get information that you can comprehend. You ask to be transferred to someone in the U.S. and are then put on hold for what seems like an eternity. You hang up in frustration and vow never again to purchase anything from this company.

More and more businesses are outsourcing not just manufacturing jobs but services ones too. On the face of it, this seems like a smart financial move: By slashing labor costs 25%, 50%, or more, companies that have had slim profit margins are now able to enrich the bottom line and keep shareholders happy.

Outsourcing customer service, however, is not only unethical. It's bad for business.

Here's why.
Good Word of Mouth and How Not to Get It

The most valuable commodity a business has, and the most difficult one to come by, is positive word of mouth. There are lots of ways to engender this. You can build a superior product. You can create a memorable marketing campaign. You can get publicity by doing good works in the community. All of these will inevitably get people talking about your company, which is harder and harder to make happen in our increasingly crowded marketplace.

The problem with outsourcing customer service is that this practice creates nothing but negative word of mouth. Time is precious, and what customer wants to spend an inordinate amount of time in an often vain attempt to communicate with a company employee who is halfway around the world and cannot speak English effectively? It is easy to measure the savings a business gets by farming out customer-service jobs to countries whose median income is an eighth of what it is in the U.S. What too many businesses either fail to see or refuse to take seriously, however, is that companies that value short-term profit at the expense of meaningful customer service risk sacrificing long-term profits and the company's own reputation. Beware: It's harder to repair a poor image than it is to maintain a good one in the first place.

Smart businesses recognize that the surest way to hold onto their current customers and create new ones is to place customer satisfaction front and center, not only in their mission statements but in their day-to-day operations. This means that customer-service representatives must be able to communicate clearly. This also means that these employees should be fluent not only in the primary language of the customer base but in their culture, customs, and idiosyncrasies as well. The root of "customer" is "custom," and customs are largely a mystery to those who live and work outside of the culture.