Is Customer Service the deciding factor as to which companies succeed or fail in this economic downturn?

Just received my copy of the Call Center Openings & Expansions Report from King White at Site Selection Group and for the first time I can remember there are no new builds or expansions in Canada. Nor are there any in India either for that matter.



The numbers show a dramatic slowdown in the job creation with 2,930 net new jobs created- down almost 70% from a year ago, of those 2,560 are located outside of North America. The majority of the increases occur ed in the outsource BPO sector with new centers in the Philippines and expansions at home.



2,143 jobs were displaced in 16 contact centers in US and Canada in January.



The fact that the market is tightening up isn't a surprise to anyone. We are bombarded by horror stories in the media every time we listen to the radio, watch or read the news. What is surprising to me at least is how resilient the contact center industry is proving to be.



In January 598,000 workers in the US and 129,000 workers in Canada lost their jobs. That adds up to a staggering 727,000 people looking for work. Yet in a sector much maligned the net of hiring and firings were about break-even. That's a lot better than the banks or automakers fared.



Now its possible that the axe just hasn't fallen yet as job cuts work through organization and the customer facing call and contact center positions are just coming into the cross-hairs.



Or maybe organizations are recognizing that in a downturn where cash is king, getting a customer to part with their cash is becoming increasingly difficult. Good service, as infrequent as it often is may just be the key to prying open the purses and wallets of customers. Service can be a key differentiator between organizations.



In tough times we all choose between alternatives, buy this, pass on that, maybe later or not at all. In days of plenty we would have bought it all. So how will customers...you and I make decisions? I postulate that increasingly the service we receive will be viewed as a part of the purchase or transaction. When customers view the customer service experience inherent with making that purchase as a part of the buying experience and capable of increasing purchase satisfaction, then savvy companies and organizations will embrace true customer advocacy, and all of our customer service experiences will become significantly more effective, more efficient and above all more enjoyable.



Of course this may just be me looking for a silver lining...but it is a happy thought.

The Shoemakers children...

I had reason to call the Disney resort reservation line yesterday to extend my stay next week at the IQPC Call Center Summit. If it wasn't so sad then the following would have been quite comical...
I called to add one day to my stay to accommodate additional meetings that I had scheduled. The call took more than 3 minutes before it was answered and then the security questions took 3 more minutes. The volume at the start of the call was about a million decibels and by the end I couldn't hear the agent. After more than 8 minutes of talking at cross purposes, the agent confessed he could help me and that I need to call another number. No he "wasn't allowed to transfer the call", but he did wish me a nice day and asked if he had resolved my reason for calling. I started to explain that, no he and I had concluded that he couldn't help me, but I came to my senses before that happened. I was the n connected to a post call survey which was heavy on touchy-feely agent engagement questions, but ignored topics like resolution, timeliness of response and the quality of the connection.

The entire experience was poor, long wait time, no resolution, no early qualification to determine if they could help and ridiculously long security process (none of which was repeated when I spoke to the correct person). The agent wasn't eager, helpful or touchy-feely.

Now I know better than many the challenges of working in and/or operating a contact center and the dangers of judging a center based upon a single snapshot or interaction, but let me tell you my opinion of Disney declined immensely due to this interaction. The fact that I was calling regarding a call center event does add an element of perverse humor.

Dell to charge for US based support calls

So Dell believes they have found a solution to the level of dissatisfaction that customers feel when dealing with their offshore contact centers. For just $13/month or $99 a year you can speak with US based support agents with a wait time of two minutes or less. Those customers who do not enrol in the 'Your Tech Team' service will continue to handled by offshore centers. See original article here .

So is this really a solution? Will customers enroll in this new service?

Well it may represent a solution for Dell as they struggle to balance the cost savings associated with offshore centers (estimated at 20-30%) with the ire these very centers raise with their customers.

To answer the second question, yes, I believe that customers will take advantage of the service, in part to gain what they perceive to be better service, but also for patriotic reasons. Patriotism as a rationale may surprise some of you, but certainly we have heard the rhetoric about bringing back American jobs and the evils of outsourcing from politicians and in the business and mainstream media. But this sentiment resonates well with many Americans and this has been recognised by some service companies. Jitterbug a company that provides cellular phone service to older Americans states in the television ads that they have "US based customer service". and shows a headset draped in a US flag. Jitterbug has included or 'buried' the increased cost of domestic contact center services in their pricing.

Contact Centers of America (CCA) is an outsource service provider with a mission to to 'bring back Customer Service jobs to America'. Their advertising and marketing material is clearly designed to invoke a patriotic response. Now CCA does have a strategy to offset in part the higher cost by co located their centers on/near Universities and Colleges and partnering with these learning institutions to provide job training, Co-Op and student employment at lower and/or subsidized rates.

So CCA reduces the base cost of US based service through partnerships, Jitterbug includes it in the price and Dell offers pay for service.

None of this is really new, the same thing has occurred in the UK starting five years ago. With a backdrop of weekly and almost daily horror stories in dealing with offshore centers. Banks and insurance companies specifically began touting UK based call centers in their ads on television and in print. In fact a UK based call center was positioned a reason enough to move your bank account, since the actual products all banks sell is virtually the same.

Dells shift may just be the thin edge of the wedge as companies look for ways to improve customer loyalty and retention. Clearly forcing customer to deal with a contact center where the customer has difficulty understanding the agent can be frustrating. Frustrated customer do not align well with improved loyalty or repurchase

Facts, Figures and Trends

A few more or less random observations on the call and contact center space that has come across my desk in the past few days;
-According to Accenture 68% of respondents to a recent survey reported that they had moved their business to new companies as a result of poor service received at the incumbent firm. This is up from 59% last year. This is even a higher percentage than moved due to price (68% to 53%), in the US in particular this trend was even more pronounced with 73% switching providers due to poor service, compared with 47% who switched based on price!
There is a cost to these defections with half of the respondents reporting moving $4,000 worth of business to new providers.
-33% of consumers said their service expectations were higher this year than they were 12 months earlier, 50% said their expectations were higher than they were 5 years.
-20% said they would leave a company immediately over poor service versus 13% in last years survey.
- Embarq the telecommunications company spun off from Sprint/Nextel has announced that they have replaced their IVR with live agents, due to customer dissatisfaction with automated service. In addition these call are answered domestically.

It looks like it is finally beginning to dawn on companies that superior service can be not only a differentiator, but also one of, if not the primary driver of customer loyalty.

Colin