Outsourced Customers

Outsourced Customers
I turn on my computer to find that my anti-virus software is not working properly. I try to fix the problem on my own, but I fail. I put a call into the anti-virus technical support to get help. After sitting on hold listening to elevator music I am connected to someone I can’t understand. I explain my situation and then they give a response that I have to piece together. I keep saying, “What?”,”Can you say that again?”, and “I can’t understand you.” The person on the other end tries to speak directions more thoroughly. I still can’t understand you. Do you have someone who speaks better English that I can to? I have seemed to offend this person but they politely tell me no and attempt for the third time to explain everything all over again. In the end, I give up and tell them I fixed the problem. I am then notified that I was charged for that phone call at a long distance rate. I didn’t get the problem fixed. (I actually fixed the problem on my own later on). I paid for a service that I couldn’t understand. As a customer I was extremely frustrated with this company, and I will never use their product again. I have felt the results of outsourcing. Like most Americans I disagree with outsourcing. Companies are going to outsourcing to cut operation costs. In addition, American jobs are loss. Outsourced jobs that deal with customer care are seeing a more common trend of customers being highly irritated. American businesses turn to outsourcing, thinking it will better the company but in turn this is losing customers by the minute. Customers are dealing with frustration, loss of loyalty, and cultural differences.
Most people have felt someone’s wrath when dealing with the outsourcing of a business. Almost every American has called in for help with a product or service and has hung up more frustrated than ever. Outsourcing customer service to foreign countries damages a business; customers are so frustrated that they seek business elsewhere. According to customer satisfaction statistics, 70% of customers who called in with a problem will be in full blown out rage by the time they speak to someone. There are 24% of the customers who will yell at a representative, 8% threaten to sue the company, and 5% will actually curse (Shellenbarger). Customer service representatives are trained to handle any type of situation, such as angry customers. The key task for this area in a business is to show emotional leadership. The representative is to show compassion towards the customer, by listening with empathy and apologizing, even though it is not their fault. If the representative is from another country and can’t speak English effectively, how can they show compassion? A customer support job is demanding and time consuming. It requires fast response time, courteous replies, and decisive action. For these tasks the language barrier creates a huge problem with being efficient. As a result, not all people have the talent to be a customer service representative, which happens to prove even more as to why outsourcing is damaging to an American business. A customer needs to feel valued and some service workers have to fake their geniality to make the customer happy.
The feeling of frustration is not only an emotional feeling, but also a cognitive process. When a customer complains, they evaluate the response of the company. The customer will either be satisfied or dissatisfied and will make the choice whether to continue with the company. Some of these customers leave feedback for other customers to see or hear which could lead to catastrophe in any business. Outsourcing creates negative word of mouth. A happy customer will buy more from a company and then tell more people, which in turn those people will buy more from the company.
Customer satisfaction can range from business to business depending on the product or service. In researching customer satisfaction, the car repair industry had 87% of satisfied customers while 13% were not (Meffert). This industry has not outsourced its jobs, but rather the customer deals directly with the owner or operator. During an interview with Robert Hefty, he stated that he noticed customers were not as picky with their cars as they were with their food. He did have some upset customers in his car repair service, but he responded to the customer’s needs, and the customer left happy. The customer felt valued and will use the business in the future. In doing business over 10 years, Robert only experienced a handful of unhappy customers. Another trend that Robert noticed was that the longer the customer waited to work their problems out, the more irate the customer became. “The customer gets a chance to think about what they are going to say”, said Hefty. In the end if a customer is treated with respect and their problems are worked out, they will continue to use the business. When a customer leaves happy, they tell their friends, and the business will begin to grow. If there is an upset customer the same will happen, but the results will be the loss of a customer. Even though everyone can’t be pleased, an 87% satisfaction rate is remarkable for a non- outsourced company.
A very important matter is that most companies ignore the lifetime value of a customer. The lifetime value is the amount of money a customer will spend, and then when they tell other people, they will spend money. There is a continuous profit for the company. Companies are to keep in mind to always keeping the customer happy. The tips to keeping customers happy are respecting them, being honest with them, responding quickly to their matters, being open and accessible, and most importantly treating them well.
The company Travelocity knows that it needs to keep customers happy. In March of 2004 the company outsourced a call center to India. The company turned a loss of $55 million in 2003 to a projected profit of $15 million last year. After several complaints from customers, the company decided it needed to rebound its customer service satisfaction area. As a result, the company redoubled its agents, training, and waived fees to customers. Now the company is always reminded of keeping the customer happy. The companies that fail to be reminded of this fact suffer the consequences. Outsourced companies save millions by outsourcing, but call centers will close in response to too many customer complaints.
The business that loses customers due to outsourcing also loses out on profits. Some companies think that the loss of a customer here and there is not that big of a deal, but there are costs to losing customers. Customers who stay with a business year after year generate more profits each year. For example, in the auto industry a four- year customer triples the profits over a first year customer (Tsai). If that four year customer gets angry and leaves, all profits go with them. Most businesses are more wrapped up in gaining new customers than keeping the old. The costs of gaining new customers are much larger than keeping the customers who are already with the business. Costs can include advertising, promoting, supplies, and support, whereas a continuing customer brings in money to the business. Companies have vice presidents of customer service, but these positions focus primarily on promoting and protecting the company’s interests, not those of the customer.
Most businesses don’t realize that there are hidden costs to outsourcing. Some of the costs are managing the offshore contract, the transitional period, cultural costs, selecting a vendor, and redundancies, or retraining. A small business that decides to outsource will be hit the hardest with these costs. There are huge upfront investment costs, and then it will take years to keep them manageable. Few companies can report that they saved half of the upfront costs with their outsourcing contracts. Even after a business has dished out money for outsourcing, their customers still need to feel as if they are loyal assets to the company. Customer’s, loyalty is divided into two parts. There are long- term customer and short- term customers. Short- term customers will likely look to another brand or service, whereas long- term customers will continue to use the same product or service. A short- term customer may have come to the business by word of mouth or a post- purchase recommendation. A long- term loyal customer has two key factors: word of mouth and price tolerance. This type of customer will have enough loyalty to have a higher degree of price tolerance and are more willing to recommend the business to their friends or acquaintances. A company that values short- term profits in the expense of customer service risks losing long- term profits and the company’s reputation. A business should consider that the money that is saved with outsourcing be put to use for customer satisfaction.
The biggest mistake a business can make is to outsource to a foreign country. India is the leading offshore destination for servicing outsourcing. India accounts for more than 50% of all outsourcing (Chanda). Most call centers and customer service centers are in India. The businesses may save money with the shifting to outsourcing, but in the end the customers are being lost in the shuffle. Customers become highly agitated when calling in for help because they cannot understand what is being said to them. The call center workers have been trained to speak English, but they still have a heavy accent, which makes them confusing to the customer. In the Indian culture every man is for himself. Making money is the key task, so if a customer gets angry, it doesn’t bother the representative. If the representative has persuaded the customer to buy more products, then it is more money for the company. Customers can also be lost in confusing communication, and they can end up buying something without them realizing it. In India the focus is to move into higher- end and specialized areas where language capabilities may be less of a barrier. In China there is more training in the English language, but there is hardly any training about the products or service of the company. It is scary to think that businesses are giving up the depth of nuances in the English language to help cut a few costs. For the customers’ frustration builds, and there is feeling of less value of the company. When customers have to deal with a language barrier, it could be their final decision to leave the company.
Not only does the business risk losing customers, but they face also the loss of jobs. Some foreign countries do outsource to America, but America has a deficit in manufacturing. In 2005 exporting was at only $807 billion and importing was at $1.47 trillion. When a job is lost to outsourcing, so is the social security fund. For example, the average American worker who makes $40,000 a year, when the job is outsourced, $6,000 is lost for the social security fund. If 100,000 jobs are lost at $40,000 a year, this means $300 million a year is lost for the social security fund. The employer is saving about 75% of costs (Chanda). The scary part is what will the future look like for the booming businesses that want to retire?
Outsourcing jobs are expected to grow to 3.3 million by 2015, with the wages accounting for $136 billion ( Chanda). All of the jobs being outsourced will affect our customers in every business because of the fact that jobs are being lost. It is bad enough that customers are already mad because their problems are not being taken care of. The customer is feeling ignored in most cases. Upon recently watching a movie called Outsourced; this movie was an eye opener as to what is really happening when businesses outsource. It is recommended that a company debating outsourcing should watch this movie. In the movie the worker who was outsourced had to go to India and train his replacements. In the process there are frustrations he is having with the culture shock and trying to train someone who barely speaks English. In the movie he also fears that outsourcing is damaging the company. The people who were trained in the movie did not understand the products that they were talking to customers about. If the customer service representatives don’t understand the product or service, how can they help the customer? Also in the movie, it is pointed out the culture clash of the materials that is being sold. In India there is no sense of materialistic things like we have in America. The Indian people don’t understand why a certain product is needed. To them it is a waste of money and time. It makes no sense as to how the Indian people are going to help the American people when there is confusion on both ends. The quality of service is in dire need of reshaping.
If businesses are going to outsource, they need to learn to lower costs without compromising on quality. In addition, companies need to be aware of to whom they are outsourcing. When American companies outsource to India there are risks of piracy involved. A company that deals with classified information or trademarks has confidentiality in jeopardy if it gets into the wrong hands. In India scams are at an all - time high, and a company can suffer great loss. Before any company outsources to India, they must first check the credentials of the contracted Indian company. If time and money allows, the company should also visit India to make sure there is an actual company in place.
A booming business does not need to outsource to become successful. Businesses turn to outsourcing to cut costs, but the value of a paying customer definitely has a price! Outsourcing customer service is unethical because of the disrespect for customer satisfaction. As long as a business has happy customers, there is profit being made. In today’s society people are pushed to do things cheaper, but whatever happened to the phrase “quality not quantity”? When a business outsources, it almost seems that quality is given up for quantity. This is a sad truth that American businesses need to correct if outsourcing is going to continue. Customer service is performing the job of communicating with the public, which requires being able to communicate well. Most Indians lack the ability to communicate properly with customers. The root word of customer is custom, and customs are largely unknown to those who work and live outside the United States. Furthermore, we need to stop outsourcing. Keeping customer service in America will lead to happy customers, good word of mouth for the company, and will enrich the economy. In the long run, it will continue growth and success.









Works Cited
Bentley, Diana. “Proceed with Care: Pros and Cons of Outsourcing.” The Sunday Times 14 Jan 2007: 19. Print.
Braun,Manfred., and Herbert Meffert. “Complaining Behavior and Satisfaction of Consumers: An Empirical Study in Germany.” Diss. University of Munster, 1976. Print
Hefty, Robert. Telephone interview. 15 Sept. 2010.
Reichheld, Fredrick., and Earl Sasser, Jr. “ Zero Defections: Quality Comes to Services.” Fredrick Reichheld, 1990. Web. 26 Sept. 2010.< http://www. hbr.org/1990/09/zero- defections/ar/pr>.
Rupa, Chanda.” India and Services Outsourcing in Asia.” The Singapore Economic Review, Vol. 53. No 3 (2008) 419-447.
Shellenbarger, Sue. “How to Keep Your Cool in Angry Times.” The Wall Street Journal.
The Wall Street Journal, 22 Sept. 2010. Web 26 Sept 2010.
Tsai, Ming-Tien. “ The Effect of Customer Value.” Social Behavior and Personality, 2010., 729- 740.