Outsourcing Shortcomings

Why Clear Harbor Detail

What is Outsourcing Costing Your Brand?

Improving customer engagement and loyalty while reducing risk and costs is the goal of most customer-driven organizations. Companies delegate certain direct (customer facing/interacting) and indirect (administrative tasks, back-office processes/workload) customer care services to third parties to try and achieve these goals. Most, however, have drawn a line they will not cross if they perceive the risks of outsourcing are too high.

Unprecedented Risk and Exposure

When outsourcing the customer contact center, many companies are comfortable delegating workload that is simple and straightforward for a third party to perform, requiring little investment in infrastructure, quality or personnel development on the part of the outsourcer. With back-office work, companies are willing to outsource if they believe there is little chance the brand will be impacted when goals related to speed and accuracy are not met.
In both cases, companies gravitate to keeping work in-house when the external or "exo-risks" of outsourcing are perceived to be too high. Exo-risk arises from factors and events originating outside an organization that businesses feel are beyond their control.
Companies today are also at the mercy of new exo-factors, including those brought on by a much louder voice of the customer. Brands are more exposed now through social media, both for good and for bad. Problems with a brand and associated service are more easily laid bare through advancements in personal communication technology and social media applications with the power and reach to bring a brand to its knees via a single tweet or campaign gone viral.

Poor Reflection

Exo-risk increases whenever an outsourcer is unable to accurately reflect a client’s strategy, environment and brand, especially when there is complexity in the service response.
Poor reflection begins at the very earliest stages of a relationship when thorough due diligence should be performed by the outsourcer to fully understand client strategy and desires. Poor reflection is manifest throughout implementation and execution of programs, resulting in further alienation of the end customer from the chosen brand.

Growing Product Complexity

Complexity of products is another contributor to growing exo-risk. More and more products are tied to the “Internet of Things” (IOT), making them more challenging to support with outsourcing as we know it.
According to Gartner, IoT devices will outnumber the world’s population this year for the first time and by 2020, there will be 20.4 billion IoT devices overall, with the consumer segment being the largest user at 12.8 billion or 63% of connected things.1
  • 1 Gartner 2017 Customer Experience Survey

Impact of the ELA

With customer expectations at an all-time high, satisfaction and loyalty are now driven by an expectation level agreement (ELA).
Unlike a service level agreement (SLA), the ELA is an “unwritten contract” or expectation of an end customer toward a chosen brand. The importance of the ELA is growing exponentially for several reasons:
Leading brands have figured out how to treat their customers.
The expectation a customer has toward your brand is heavily influenced by how they are treated by other brands.
Sales and marketing messages make “promises” a brand’s support team must live up to.
This creates inflated expectations of high quality after the sale, quick resolution across channels, and a frictionless experience regardless of what the customer spent.
Consumers go public with buying experiences with the attitude of:
“I don’t care how big you are, Mr. Business Owner, I expect accuracy, speed, efficiency and the highest possible value, otherwise I will start a ‘forest fire’ of PR problems for you.”

The Problems with Outsourcing

In spite of promises made during the courtship phase of a business relationship, outsourcing providers will not put forth the investment or effort needed to reduce exo-risk. They are not willing to do the things necessary to perform as good or better than a client’s in-house staff, including:
Taking on work that requires them to effectively mirror the client’s business strategy; or
Implementing advanced management methods and agent development programs.
Outsourcers are SLA-driven, with a philosophy and business model built around an outdated service level agreement way of thinking. SLAs typically govern processes that are simple and straightforward and contact center contracts where service response answers are known and easily accessible. They tend to be more punitive in their intent and execution, focused on remedies or penalties if agreed-upon levels are not met.
And even if outsourcers wanted to do more, they don’t have the experience or commitment level needed to truly become an extension of the client.

The Value of
Clear Harbor

For all of these reasons, Clear Harbor sees a growing opportunity for a different type of service provider to step in with the right capabilities, enhanced processes and personnel needed to succeed in the new CX landscape.
Clear Harbor’s value proposition is to step up to the plate and respond to the ELA for close to the same price as an outdated SLA way-of-thinking about service delivery. Our response to exo-risk is focused on delivery of a much better ELA result through a strategy and brand mirroring approach to customer care.