Outsourcing Customer Satisfaction

By Patrice Gilles

March 2007

If you outsource your contact center operations, there are three keys to success.  These apply regardless of whether the center is inbound or outbound, offshore or domestic, strictly telephone-focused or mixed online/telephone contact, or whether it is aimed at consumers, business-to-business, or internal company employees.

The critical components of a successful outsourcing engagement are:

• Careful assessment of potential service providers

• How well the relationship is structured from the beginning

• How dedicated you are to managing the relationship throughout its life

This may seem straightforward, yet it is anything but simple.  The changing nature of contact centers - as more companies move to leverage the centers as tools for true customer satisfaction - further complicates the process.

Achieving the difficult-to-quantify goal of customer satisfaction requires not only a different mindset, but a more rigorous assessment of a service provider's capabilities and more careful management of the service provider's ongoing performance.

Historically, the outsourcing of contact center operations tended to be cost-driven, as the centers were used mainly as a way to centralize and handle complaints and issues.  A company chose its service provider based on easily measured factors such as talk time or speed to answer, and the providers who performed well in these areas and delivered service at the lowest prices were the ones that thrived.  Today, however, more companies see the relationship, sales, and marketing potential of contact centers and are looking for providers with well-trained agents who can positively represent the contracting company and work towards its goals.

In evaluating a service provider, it is critical that a company thoroughly understand the types of individuals the provider hires as agents, how they train these agents, and how they use technology to support these agents and measure their performance.  The rate of agent turnover takes on greater importance when the work is less transactional and more interpersonal, since it is harder to fill these types of positions with the right people.  Client references should be checked thoroughly, and a site visit is highly recommended.

Visiting the service provider's facility allows you to see the operation and get a sense of how that facility and the individuals working in it fit your company's culture.  You should spend an entire day shadowing several agents.  Listen in as they handle a variety of contacts with customers and consumers.  Are they knowledgeable?  Courteous?  How do they handle upset callers?  Evaluating their performance allows you to judge whether they would make good representatives of your company. 

If your provider's contact center is offshore, this could affect the agents' ability to meet your customer satisfaction goals.  Training agents regarding your company's products and services is challenging enough, and the cultural gap, language issues, and possible unavailability of that product or service in their environment compounds that challenge.  Also, not all cultures easily embrace the empathy or affinity that is key to satisfying callers.  In this instance, your needs may be better met by a provider who can offer either a domestic center or a "near-shore."

Structuring Agreements: An agreement with a service provider in which customer satisfaction is the overarching goal will be approached differently from one that is primarily service level-based.  Outside expertise, such as an expert outsourcing advisor and legal counsel, should be part of the company's negotiating team.  Ideally, the advisor will have been involved from the beginning to assist with service provider identification, evaluation process, deal structure, and so forth.

Service levels will always be important and must be accommodated and clearly stated in an outsourcing agreement, but they must also be balanced against the customer satisfaction objective.  That will require the agreement to be flexible, so it can handle the fine-tuning that may be necessary as time goes on.

For instance, call abandonment rates and time-to-answer will always be key indicators, since both are vital to customer satisfaction.  However, average talk times may be variable and more difficult to standardize, given the nature of the contacts and their unscripted nature.

The optimal agreement will be flexible and address the needs of both sides.  With sufficient flexibility to accommodate needed changes as the relationship matures and progresses, the company and its service provider can avoid the hassle and angst of a renegotiation at some point down the road. 

The agreement should concentrate on making it possible for both the company and the service provider to achieve positive results by learning and building on each other's shared strengths.  Built into it should be the change management tools that make the pact adjustable to changing circumstances. 

With the proper change management tools built in, the agreement maintains alignment between both parties even as conditions change.  It enables the relationship and the contractual documents to be slightly repositioned in response to a variety of change triggers.  Later in the relationship, the contract may look significantly different from the beginning, but the changes will have been for the sake of the larger objective.

Ongoing Governance: If customer satisfaction is your aim, it will require strong, disciplined governance of the service provider and the outsourcing relationship.  Governance becomes much more than a matter of monitoring the provider's monthly statistics.  That is not to minimize the importance of quantifying performance, but these indicators need to be seen more as a barometer rather than in terms of tight adherence to service level agreements.

For example, if talk times should run longer than the standard, the effect of a forced reduction needs to be measured against the damage that could be done to customer satisfaction levels.  This analysis will help determine whether the standard should be adjusted accordingly in order to achieve the larger objective.

In selecting the members of the governance team, a company should look for individuals with contact center experience who understand the importance of the contact center relative to the larger strategic objectives of the organization.  As an example, an important team member would be someone who knows how to bridge the contact center to the marketing and product quality departments, in order to leverage the valuable information that the center generates on an ongoing basis.  The outside expert advisor would also be part of this team.

EquaTerra research, based on analyses of hundreds of corporations of all sizes, has found that companies that dedicate four to eight percent of their annual outsourcing spending to governance derive the greatest value from their outsourcing relationships and are the happiest with those relationships.

While measuring the service provider's performance is important to ongoing governance, so is the "big picture."  To assess how well the relationship is serving the company as a whole, the team needs to stay in close contact with executives and other stakeholders.  This two-way communication conveys the state of the relationship to those stakeholders and also assimilates their feedback.

In summary, the best outsourcing management is a blend of effective leadership, the right tools, intelligent processes, sensitive personnel, a mix of skills, and strong guiding principles.  With the appropriate effort to assure that both the company and the service provider are operating from shared principles, it creates a basis for a true partnership-oriented relationship that delivers on its potential.

Patrice Gilles, who leads EquaTerra's Specialized Sourcing practice, has nearly twenty-five years of international and domestic outsourcing operations experience.  She has worked for companies such as EDS, Exult, and Sourcenet Solutions, managing a variety of outsourcing relationships and initiatives.  She can be contacted at Patrice.Gilles@equaterra.com.