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The CustomerServ Blog

Your Feet On The Street: BPO and Call Center Industry Insights

The Allergic Reaction to Nearshore and Offshore Call Centers (Part 1)

“Hell no” is often the first reaction when someone in your budget meeting says:

“Why don’t we cut costs by outsourcing our call center offshore?”

The visceral response is understandable—in fact, most of us probably had a similar “first” reaction to offshore call centers. I remember when the idea was initially proposed to me in the very early days of offshoring (circa 1995)—my immediate reaction was pretty negative.

Today, nearshoring and offshoring are ubiquitous and mainstream for those of us who “live” in the call center/BPO industry and are very familiar with the globalism of call centers. But those who are less familiar often find it challenging to warm up to the idea of their valuable customers talking with call center agents in a foreign country.

Common concerns with offshore and nearshore call centers

After many years of counseling and guiding client-side decision-makers, we find the “allergic reaction” to offshore and nearshore to be rooted in the following:

  • Voice quality concerns  language barrier, communication and cultural differences.
  • Information void  lack of understanding of the pros and cons of working with call centers located          outside of the USA.
  • Brand damage — customer service and customer experience issues.
  • Bad experience  previous horror story with a nearshore or offshore call center.
  • Perception  the unshakable vision of heavily accented agents pissing off customers.
  • Data security worries  customer data theft, data breaches, etc.
  • Scalability  concerns that overseas call centers can’t meet staffing requirements.
  • Safety  State Department warnings and personal safety dangers.
  • Geopolitical  government policies, unstable political leaders, terrorism, etc.
  • Business continuity  weather events, business disruption and related issues.
  • Media hype —  news stories that portray outsourcing as the “evil” job stealer.
  • “Buy American” — companies with a strong U.S.-only mandate.

With these and other concerns, it is understandable that some corporate leaders are leery about using overseas call centers. So let’s try to separate perception from reality.

But first, to clarify, CustomerServ is geographically neutral. We will recommend the best vendor option(s) and the right outsourcing roadmap to our clients after careful analysis of their needs, whether it is U.S.-based onshore, nearshore, offshore or a combination. We will not recommend a location or a vendor that might do damage to the client’s brand. We recognize that valid arguments can be made both for and against outsourcing outside of the United States, and all available data must be taken into consideration. In this article series, we’ll socialize just some of the many viewpoints on this topic relevant to U.S. companies and their decision to use onshore vs. near- or offshore call centers.

The attraction to nearshore or offshore call centers

The primary objective for using a nearshore or offshore call center is cost savings along with other potential advantages like the availability of college-educated agents, multilingual services, redundancy and staffing flexibility. And, proponents of near- and offshore believe that the call center agent “job” is more “valued and appreciated” outside of the United States; therefore, agent turnover and performance levels might be better than in U.S. call centers— a view, among others, that can be debated both ways.

The availability of lower cost global call centers does not mean all of them are bona fide. There is a clear delineation between vendors that are Tier 1 market leaders, in comparison to vendors that are Tier 2 and Tier 3—those that have a less attractive operating model.

  • Tier 1 nearshore and offshore call center vendors are higher quality organizations that we strongly prefer.
  • Tier 2 and Tier 3, lower quality firms, don’t often invest in basic operating tools such as quality control, training, workforce management, infrastructure, business continuity, etc. and are riskier options.

We will continue to highlight the differences between these types of firms throughout this discussion.

Is it possible to move past a bad experience with a call center vendor?

Even a single bad experience with a nearshore or offshore call center can turn stakeholders against the idea, rendering the strategy anathema. Yet, quite often, foundational problems within the prior vendor relationship contributed to the poor outcome. Perhaps the client signed up for an unsustainable low price or a lower-grade (Tier 2 or 3) outsourcer that lacked the delivery mechanism to support the client’s needs. Or even if the client picked a Tier 1 vendor (higher grade), it could be that the provider simply wasn’t the right match, or that the particular line of business could not be adequately serviced outside the United States. 

A bad experience can also be attributed to overreach—trying to sprint before learning to walk. If stakeholders are already nervous about moving call center support outside of the USA, it might not make sense to go right to the Philippines or to an emerging offshore market that is still in its infancy. Distance and other “learning curve” issues might add to the client’s anxiety, so it might be more prudent to test the waters nearshore first—closer to “home”. The ability to make frequent visits to a nearshore site and develop a close working relationship would help to help alleviate many concerns.

Common perceptions about nearshore and offshore vendors

A common perception is that call centers outside the USA cannot provide the level of professionalism that American consumers expect. There is some truth to this. Not all lines of business or call types can be properly serviced outside of the USA—causing many companies to repatriate their call centers back to the USA. Again, an argument can be made that perhaps the wrong nearshore/offshore call center vendor was selected in the first place. Or if the overseas location was a captive or company owned site, perhaps the wrong site location was selected. Again, many variables need to be examined. On the other hand, despite customer upheaval and even revolt, some companies can’t afford to, or, they simply won’t move their call center support back to the USA. What then?

As consumers, we have all had our share of frustrating experiences with offshore and nearshore call centers. But many of us have also experienced issues with U.S.-based call centers as well. There are myriad reasons for poor customer experience at any call center, anyplace in the world and so we have to put things into proper perspective.

Blanket statements or hyperbole suggesting that “all” nearshore and offshore call centers are bad is simply inaccurate. The truth is, because of the stigma attached to them, nearshore and offshore call centers that are focused on delivering an excellent customer experience (Tier 1 firms), often have to work harder to impress U.S. clients.

What do “Tier 1” nearshore and offshore vendors do differently?

Leading nearshore and offshore call center vendors invest heavily in their people. For example, some of our vendors have “paid” English language academies which they utilize to attract and retain talent. Employees receive compensation for completing the curriculum at these academies as part of the vendor’s investment in developing English language skills for a successful call center career and beyond.

In the most successful nearshore and offshore client-vendor relationships, both sides work in close collaboration and are in simpatico. Contractual terms notwithstanding, communication between the parties is open and transparent—enabling them to effectively deal with speed bumps and challenges, which will happen in every outsourcing relationship.

Key features of Tier 1 providers include:

U.S. influence

Tier 1 providers are either U.S.-based vendors with domestic and overseas sites, or, they are organizations that are headquartered nearshore and offshore but with a delivery model that rivals best-in-class U.S. call center BPO firms.

Large investment 

Tier 1 vendors invest heavily in process and infrastructure such continuous training, attractive and “people-friendly” call center sites, agent retention, community involvement, data and site security, advanced technology, business continuity, responsive client account teams, value added tools and other critical areas. Some of our vendors provide transportation services and on-site amenities like childcare and medical clinics.

No shortcuts

Tier 1 outsourcers do not cut corners the way that Tier 2 and 3 vendors do. As a client side outsourcing decision maker, if the main goal at your company is to find the cheapest vendor with a “butts-in-seats” mentality, irrespective of quality, there are plenty of these vendors available around the globe. Caveat emptor!

Leadership

“Expatriate” influence and contribution are very strong at Tier 1 vendors, enabling U.S. call center leaders to play an active role in the development and success of the nearshore and offshore staff. Vendors have introduced practices like video focus groups and virtual onsite tours to help reinforce the client’s brand, mission, values and customer engagement mandates within the outsourced site(s). Some vendors and even clients go so far as to require an “English only” policy on the call center floor, requiring everyone from the call center agents to senior management to only communicate in English.

Certifications

Many Tier 1 outsourcing firms also have certifications such as PCI, ISO, SSAE, etc., and are fully compliant with TCPA (Telephone Consumer Protection Act) regulations and other compliance.

Premier clients

Tier 1 vendors tend to have more “Tier 1 clients” with high standards of excellence that they demand from their outsourcing vendors. Such clients include Fortune 500 companies to multi-billion dollar healthcare organizations to iconic Silicon Valley brands and beyond. These clients outsource a wide range of services from highly complex and technical interactions to more transactional.

Making the right decision

Bona fide nearshore and offshore call center vendors can reduce outsourcing costs from 30% to 50% compared to U.S. vendors, depending on the country location, the agent skill set required and contract size. However, as stated earlier, price alone should not drive the decision to use a nearshore or offshore call center.

Learn how we helped a global leader in the subscription box industry reduce  costs and improve quality and customer experience. 

If nearshore and offshore costs are lower but your selected vendors underperform, then it defeats the very purpose of outsourcing globally. In some instances, you might end up paying more as a result of incorrect vendor selection. Remember, all metrics count when choosing and managing a call center vendor or site location outside of the USA.

When evaluating prospective nearshore and offshore call center vendors, your due diligence process is absolutely critical. A good rule of thumb is to make sure that your nearshore or offshore call center vendor provides everything (and more) that a Tier 1 U.S. vendor provides, and view the lower price simply as an added bonus. 

In Part 2 of this article series, we will go more into more detail about how our vendors and other Tier 1 providers in nearshore and offshore countries successfully tackle demanding call center functions without missing a beat. We’ll dig into communication, onboarding & implementation, performance management, value-added tools and other key ingredients for successful international outsourcing.

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As a call center outsourcing thought leader and president of CustomerServ, Nick Jiwa is dedicated to helping companies find, select and retain the right call center outsourcing partners. Nick’s expertise and contribution to the call center industry started in 1986 – as a call center agent when the industry was still in its infancy. An avid 80s music buff, proud father and soccer fanatic, Nick is passionate about “anything call center”, giving back to the community, mentoring and helping others win!

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