Thursday, March 17, 2011

Why No Consumer Choice in Customer Service Outsourcing?

I suspect more than a few hands would raise if I asked a room full of people the loaded question, "Have you ever been frustrated by outsourced customer service?"

From the Wall Street Journal:
We analyzed ... 150 North American companies and business units from 1998 to 2006 ...[and] those that outsourced customer service saw a drop in their score on the American Consumer Satisfaction Index ... The declines were roughly the same whether companies outsourced customer service domestically or overseas. (read the full article here)
Makes sense - people calling tech support are probably edgy already. Outsourcing to a call center, US-based or offshore, adds a bunch of possible rage-multipliers: a language barrier, insufficient customer information, or the inability to grant credit and resolve similar issues, to name a few.

Still, outsourcing and offshoring are attractive to businesses because they reduce costs, albeit at the expense of customer satisfaction. Grossly reduced, the decision presents a a problem: outsource, save, and alienate consumers or vice versa.

I seek some middle ground.

What if consumers were given a choice between outsourced or in-house tech support/customer service? Basically, they could choose between calling the "free" outsourced customer service or elect to call in-house and pay for the increased costs pro rata. (Remember 900 numbers?) Of course, not every consumer has a problem with customer service in the status quo, hence the option. This structure would expand choices for consumers while mitigating the loathsome overhead on the business side.

Sure, this adds some logistics, etc, but remember that is paid for on the consumers' dime. Additionally, companies could derive information from the demand schedule of calls - nothing like revealed preference.

Welfare gains all around, right?

So why not? A few things come to mind:

*Outsourcing/offshoring to call centers also has significant non-monetary benefits.
*Companies already know that cost exceeds consumer willingness to pay.
*Provoke a, "Why pay extra for something I already paid for?" furious attitude. Aka, why split hairs between bad-customer-service anger and I-should-pay-more-for-this anger.

I'm curious what the end result of this idea, if propagated, would suggest. Do people truly and sufficiently value competent support or are the widespread complaints about outsourced calls are just an opportunistic jab in the existential relationship between companies and consumers?

Thoughts or comments?
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