The definition of an american business owners dream has come to a place where you likely no longer aspire to have the biggest baddest skyscraper in Manhattan or San Fransisco.
The american SMB owner is constantly being pelted with one inflation after another. Swiftly followed by more financially-devastating and prolonged recessions.
We’ve learned that profits matter more than being the business or corporation who pays the best or who holds the coveted “Best Company To Work For Award”.
If you want to go grow your S-Corp or LLC into something bigger, you need to cut costs while maintaining and improving service levels.
So when it comes to customer service (technical support, warranty service, presales, sales, after-sales, telemarketing) why payout expensive salary and benefits packages when you can outsource that end of your business to a company who’s more than happy to take care of everything at a fraction of the price?
Let’s look at three essentials you need to consider before negotiating a price:
1. Leave Ethics to the Lawyers
With many industries such as food, electronics, and residential services like telephone or cable (to name a few) you don’t necessarily need skilled labor to give your customers top-notch support.
However:
- Don’t limit your decision based on what you think your parents or neighbors would say if they found out you’re hiring a team from Pakistan to handle technical support for your new and exciting cyclone vacuum.
- At the same time, don’t make it all about saving money if your ideal CSR will need industry certifications or other specialized training that demands a higher salary. This would definitely be a moral faux pas.
Ethics are a slippery slope…
2. Expert vs. Entry Level
If you’re running a financial services or mortgage company (just as an example), expert staff is critical.
Customers calling to make pre or after-sales inquiries won’t be impressed if the agent they speak to is less knowledgeable than they are. This goes double for existing clients calling for support.
If you need expert-trained staff, you’ll have to pay more. In the case of specialized industries, like the financial services example provided above: outsourcing may be less beneficial to your year-end balance sheet than hiring, training and maintaining in-house staff.
Always ask: what do we stand to lose in profit vs. projected outsourcing savings?
All call center agencies will promise expert-trained staff:
Like all the other sleuth/undercover work you’ll have to do while choosing an outsourcer, it’s essential to find out who their existing clients are, and call some of those clients’ various support numbers to accurately gauge the support. One or two calls won’t help. Call many, call a hundred.
Make sure you have a say in who they hire and indicate that you’ll be doing frequent compliance audits:
If you need qualified financial planners to be the CSRs dealing with your existing and potential clients, you need to have some say in who the agency hires. Many agencies won’t be equipped to offer this level of service, but unscrupulous ones will still try to sign you if they think they can pull the wool over your eyes.
Let them know your company will be doing regular conformity checks at their individual call centers and ensuring compliance with your training and certification demands. Make sure your contract gives you the freedom to “CAN” them if they aren’t 100% in line at all times.
3. Overseas Outsourcing
Some of these agencies will be more than happy to take your money. Still more of them will outsource all your calls overseas to customer service and sales agents who don’t speak your customer’s language. This scenario might be okay if you’re a major food service franchise looking for order-takers.
But… The SMB owner needs to be more careful.
Many large businesses can get away with this practise once they’re established – collectively paying 20 people a sum of money that would amount to the salary of a single employee in a more developed country.
As an example: overseas outsourcing may not be a smart decision for you if you don’t have a nation of customers to support your growing pastry business!
Request performance metrics for their existing teams:
- Service level
- Call resolution rate
- Agent schedule adherence
- Active and waiting calls
- Call abandonment
- Average handle time
Never make a decision based on these numbers alone – they’ll never give you an accurate picture of the service level. You’ll merely add them into the overall consideration. Particularly after you’ve called or hired a team to call and vet the agency’s service levels.
Ask for proof of their CSR’s proficiency in speaking the language:
As mentioned already, get the numbers of their clients’ support queues and call them – multiple times. It’s always better to find out who their clients are and make a hundred calls to listed service numbers, rather than ask the call center agency to provide support numbers you can call.
One trick that’s used often by outsourcing firms is they’ll give you the numbers to their most fluent CSR queues, to give you a great first impression. By the time your reputation is ruined, they’ve already signed you to a long-term contract that you can’t escape from without taking a huge financial hit.
Negotiation Time
If the outsourcing firm passes all your tests, it’s time to move onto price negotiations! It can take a lot of time to get to this point.
Always remember that your customers are your business. Don’t just decide what’s right for you and your bottom line. Decide what’s right for you AND your customers.
More Reading:
http://operationstech.about.com/od/vendorselection/a/VendorSelect-ContractNegotiation.htm
http://insight.kellogg.northwestern.edu/article/outsourcing_contracts_in_service_industries/
http://outsourcing-center.com/2011-05-five-gotchas-when-negotiating-an-outsourcing-agreement-article-44250.html