That was then and this is now: efficiently rebuilding relationships and revenue.

• Author: Hall, Robert
• Position: MARKETING SOLUTIONS

"American firms are starting to bring call centers back to the U.S."

--NPR August 25, 2010

PART WHAT MAKES BUSINESS SO INTERESTING and humbling is how often yesterday's breakthrough is today's breakdown. The story of success always has a next chapter where the players, the strategy and the execution have to address changing markets, competitors, technology and the like to compete and succeed.

One of the driving forces for business over the past decade was cost reduction and efficiency. Businesses across the spectrum re-engineered, reduced staff, outsourced work, merged and acquired and consolidated operations to wring out every penny of cost possible. Sure enough costs went down, efficiency ratios improved and in the war to lower costs there were a number of winners.

That was then and this is now. We now see evidence of a new game. Cost still matters greatly as it always does but it seems the new game is not "reduce costs in every way possible" but rather "rebuild relationships and revenue as efficiently as possible." Recent changes in call center strategies signal the larger trend. A number of companies that found great cost-saving promise in moving customer service functions offshore are now migrating them back to the United States. The math of lower labor costs was easy to calculate--work cost less over there. However, efficiency is the cost relative to the revenue and ultimately revenue comes from customers and that is where the plot thickened.

The downside of foreign call centers

Over time three challenges surfaced.

First, it turns out that some of the lower costs intended from outsourcing customer service functions offshore had the practical effect of outsourcing those costs and efforts to customers. According to CFI Group's Customer Satisfaction Index, customer calls perceived handled outside the United States had an 11 percent higher incidence of requiring multiple representatives. In other words, the number of times a customer called in and had to engage a second representative in order to successfully move forward increased significantly. Obviously starting over with a second representative meant having to go through the process of waiting to get connected to the second representative and then repeat it a second time.

Likewise for calls handled outside the United States, there was a 17 percent higher incidence of multiple calls, which means the customer had to call back because the problem was not resolved. The overall...