Outsourcing customer service: Strategic considerations

Outsourcing customer service: Strategic considerations

Wong, S Tien

The decision to outsource your company’s customer service or customer management function can be one of the most critical decisions your company makes. In many cases, outsourcing customer service to the right teleservices partner can yield tremendous cost savings and gains in efficiency. However, this can pose a risk because you must give up direct control over the management of your customers and prospects.

Once you have decided to outsource, there are several considerations your company and the outsource service agency must address to ensure a seamless extension of service to your customers. The most important of these considerations are: objectives; planning and implementation; training; information technology issues; and feedback.


The primary objective of any customer service operation is to satisfy the customer. The entire outsourcing process should be focused on this. Our research has shown the following to be key requirements for customer satisfaction: resolution of the problem or question in one call; minimal wait or hold times; efficient call processing; and courtesy and empathy of the representative.

To resolve issues in one call, two things are required: the service agency must have real-time access to your customer databases, and its TSRs and supervisors should have a high degree of empowerment. They must be enabled to help the customer, negotiate offers and escalate problems to the appropriate venue. Empowerment includes thorough knowledge of the escalation procedures, as well as exactly what the agent’s limitations are, i.e., what he or she can and cannot do to satisfy your customer. If an issue or request cannot be resolved in one call, proper procedures must be implemented to insure timely research and response.

Average speed of answer (ASA) can be minimized via “smart agent routing” through the automatic call distributor (ACD), projected call volume modules, accurate staffing and overflow routing contingencies. Efficient call processing is achieved through the combination of these tools and comprehensive training. Also, there are operational tools to speed efficiency, including voice announcements and visual cues that indicate when call volume is exceptionally heavy, as well as aggressive supervision techniques.

Your client organization must develop benchmarks and standards for the program, key performance indicators and service levels. These must be developed in close concert with the service agency to insure budgetary compliance. World-class service levels are not achieved without a cost, so required service levels must be balanced with a reasonable degree of cost consciousness.


In addition to training on the computer and telephony systems, training is also essential in two main areas: customer service skill and project-specific information. You and the service agency should integrate your respective customer service training programs to allow the agency to more effectively capture the flavor of your client’s approach to customer service. The agency should pay close attention to your overall corporate commitment to quality customer service as well as any notable techniques or special features you have previously employed. The flavor of your customer service approach must remain consistent to insure a seamless extension.

As for specific program information, you should provide as much detail as possible on every aspect of the program. This includes companyspecific information such as corporate history and a detailed grounding in your company’s organizational structure, operating divisions and various departments. Not only is this crucial to proper call handling, but the more the agency’s representatives know about your company, the more transparent the call will be to your customer.

The importance of training cannot be overstated. Most of our clients list training as the most important determinant in selecting an outsourcing partner. If your company is a Fortune 1000 company, it typically spends up to 15 percent of an individual customer service representative’s annual salary on training and continuing education. This significant investment must be translated in a seamless fashion to the service agency handling your customer calls. Accordingly, the service agency should spend an equivalent amount of time, money and resources on training as your company has historically spent.

Training periods will vary greatly, depending on the complexity of the program. Complicated full-service applications may require 500 hours or more of basic training per employee, plus continuing education. The length of the training is not the issue; the quality of the training is. If adequate resources are not allocated to training, the outsourcing relationship is doomed.

Information Technology Issues

The potential information technology (IT) issues that can arise are limitless. The main IT goal is to create a situation where the telephone representative has accurate information in an accessible format on an immediate and real-time basis. This is much easier said than done.

Data may reside on multiple hosts across different platforms, including client/server, minicomputer and legacy mainframes. Conversion and consolidation of the data in such a potentially complex environment will be a challenging undertaking that requires competent IT personnel and myriad testing protocols. Seldom will the service agency and its client company operate on identical IT platforms, so be prepared for a potentially bumpy ride.

Where the data physically resides will raise a new set of highly complex transmission and connectivity challenges. New hardware, software and telephony capabilities to enable the varied systems to “talk” to each other may need to be introduced to insure smooth and fast data flow.

One tactic might include creating a new data warehouse from scratch to centrally house all the information. Enhancements to data access might include the development of userfriendly GUI front-end tools and scripting packages. Although, for the convenience of the agents, a friendly user interface also contributes to better call processing.

Computer-telephony integration (CTI) capabilities may include call routing to different ACD groups via DNIS (dialed number identification service) and ANI (automatic number identification) technology. Customer data can also be pulled and delivered along with the voice using ANI, thereby making the call more efficient and up to 20 seconds shorter.

This discussion excludes other IT considerations such as operating system integration, telephony or switching capabilities, and requirements at the network or carrier level. The point is, you will require real technical experts to make the program work from an IT perspective.


A thorough feedback capability must be created and implemented to not only insure a smooth transition from your company to the service agency, but also to allow for continual improvement to the overall program. Regularly scheduled reporting structures, conference calls, formal meetings as well as agent focus groups should be implemented from day one. A detailed checklist of all service requirements and program characteristics should be generated, updated and monitored on a weekly basis. The regular reporting should also include statistical analysis to spot trends, budgetary and production variances and assist in developing proactive solutions to potential problems.

In some cases, the company may require several of its employees to be “on-site” at the service agency, at least for the initial months of implementation. To facilitate communication between the organizations, it is common for the client company to also require service agency client service personnel on-site in the company’s offices. The bottom line is there must be an open pipeline of informationsharing across several levels between the two organizations.

Outsourcing your customer service operations to a service agency goes far beyond merely selecting the proper service agency. Careful attention must be paid to the key areas discussed within this article for the outsourcing strategy to pay off handsomely for your company.

The process is never an easy one. It requires a tremendous amount of focus, hard work and attention to detail on the part of all parties involved.

Mr. Wong and Mr. Palley are chief executive officer and president, respectively, of Unitel Corporation, a full-service teleservices company based in McLean, Virginia. The company provides outsourced inbound, outbound, integrated and IVR services for both business-to-business and business-to-consumer applications. Unitel received Telemarketing magazine’s MVP Gold Quality Award for 1994 and 1995, and is a “Top 50” company currently ranked as the 31 st largest inbound service agency in the nation.

Copyright Technology Marketing Corporation Aug 1996

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