Much has been written on this topic but after 20 years of helping clients choose a partner they could trust I felt compelled to offer my thoughts. Like most really important things in business the principles are simple but devilishly hard to apply and execute.
As you read this paper one key thought to remember is that you’re not outsourcing your customer relationships. You’re outsourcing the day to day execution of how they are managed but they remain your responsibility so beyond the tips in this white paper my advice is stay engaged at the ground level. Whatever partner you choose remember that their front line staff are the ones talking to your customers and, while they’re not your employees, they’re the most important people in this conversation. Get to know them. Find ways to solicit their input directly. When you schedule a QBR with your partner devote half the day listening to them so you can extend your respect and admiration for their help in making your customers understand and accept those silly policies and procedures you created that drive your customers crazy
The Five Keys
I’ve listed the five criteria below in order of importance and my choices may surprise you but it’s important to remember they build upon each other. In other words, if you can’t find the partner that meets all five criteria you’ll be much better served selecting a partner who meets the top 3 versus one that satisfies 2-5.
Right sized pond for your fish
Domain and Industry Expertise
Geography / Cost
Happy Engaged Team Members = Happy Customers
The development of best practices in the contact center industry over the last two decades has been impressive and pervasive. Most contact centers have adopted industry best practices for recruitment, selection, training, WFM, QA, et al. which are now table stakes for any reputable service provider. (Hence not in my top 5) The real key is that even the best practices can be rendered meaningless if the front line employees don’t genuinely care about the company they work for and the clients they represent – that’s you.
The front line team may do well on QA, AHT, and other metrics in order to secure their bonus but to deliver a truly great customer experience they have to genuinely care and that begins with taking pride and ownership in the organization they work for. We’ve all experienced it when it happens; you can hear it in their voice. They’re genuinely concerned about solving your issue and take pride and ownership in making that happen. Isn’t that what you want your customers to hear?
Much has been researched and written on the link between employee engagement and customer satisfaction and nowhere is the impact more relevant than in call centers. Here’s just a few studies that support why this is my number one criteria for selecting a partner.
- The Gallup Sate of the American Workplace found that the companies in the top quartile of employee engagement experience 10% higher customer ratings.
- Bain & Company studies indicate that employee behavior and attitude is one of the most significant drivers of customer satisfaction. Engaged employees not only spread their enthusiasm to customers, but they also are more dedicated to providing the best product and service to customers.
Employee engagement is a simple concept but requires a huge investment and top down commitment to make it happen, particularly when you’re dealing with an industry that employs a younger lower paid demographic. I won’t go into all the strategies to drive employee engagement (perhaps that’s my next paper) but there are clear signs to look for when talking to a prospective partner.
What is the focus of the value proposition from the senior management team? The CEO of one provider I recently met stated that his primary role was to serve his front line team members. Not his shareholders or even his clients. He had proven that focusing on serving his front line team members was the best way to maximize shareholder value and deliver the best results for his clients. Other signs include the scale and quality of investments designed to enhance the workplace environment for a young demographic. (and I don’t mean a nice cafeteria) I visited a near shore contact center recently that had a rooftop soccer pitch where agents could let off steam during their breaks and lunch. Corporate social responsibility (CSR) initiatives that provide staff opportunities to give back to the community in a meaningful way also encourage employee engagement. And finally you’ll see it on their faces. Happy engaged employees are hard to miss especially in a pressure cooker environment like a call center.
Right sized Pond for Your Fish
It’s a simple concept were all familiar with but all too often I see it ignored or overlooked by focusing too much on elements like industry expertise or even past relationships when deciding on a partner. I’ve seen too many unhappy clients that selected a large Tier I BPO provider for their 150 seat program based on the provider’s reputation and domain expertise. All too often those industry experts that attended the initial sales pitch go back to focusing on their fortune 50 clients while my client’s program is staffed with junior team managers who’s primary goal is to graduate to those fortune 50 accounts.
The flip side can be true of course. You don’t want your program to represent more than 20% of your providers’ revenues or their survival becomes reliant on your business. Every situation is different and I’m reluctant to offer clear cut rules but here’s some guidelines and considerations:
- Choose a partner that will consider your program strategic to their business. (>5% of revenues)
- Choose a partner with a diversity of clients (No single client is >15% of total revenues)
- Avoid single site providers.
- The geography you choose today may not be the one you need tomorrow so select a partner that has some diversity in their footprint covering the popular geographies (more on this later)
- The site management team can often be more important than the corporate leadership team. Pay particular attention to the tenure and experience of the leadership team in the site your program will be supported.
Industry & Domain Expertise
With this third criteria we’re starting to get into what some might consider table stakes and I wouldn’t disagree. The important step is understanding how unique your particular domain is. For example if you’re a telco looking for a partner I wouldn’t spend too much time worrying about this one. Virtually every BPO provider I’ve ever interviewed boasts at least one telco client. The landscape can change of course as you go up the value chain with increasing complexity such as Tier II technical support or back office provisioning.
Financial services and healthcare are two verticals where domain experience is a must, particularly given industry specific certifications such as PCI or HIPPA that require significant financial investments that must be amortized across multiple clients. Financial Services also has many sub categories like insurance that have very specific regulatory requirements where certification and licensing are mandatory.
Ultimately you’re the best judge of how unique your business requirements are. If your requirements are unique in any way picking a provider that has experience and understanding of your space can dramatically lower start-up costs and speed the learning curve on your program making it a win-win for both partners.
Geography and Cost
For example, you’ll typically pay rates 30% lower for nearshore service delivery vs on-shore but if you’re FCR drops by 15% what have you really saved? And the math doesn’t tell the whole picture. Not only are your immediate savings cut in half but you may have inflicted serious damage to some important customer relationships which represent a lifetime value that is difficult to immediately quantify but will eventually affect you’re bottom line.
Finally it’s important to keep your options open. I recall many occasions where a senior executive swore he/she would never take their customer support operations offshore only to find myself a year later touring them through contact center in the Philippines and India. When you can, and only if they meet the previous three criteria, pick a partner with at least some diversity in their footprint. That doesn’t mean you have to go with a Tier I provider. There are many high quality small to medium providers with service delivery locations in the key, popular geographies.
I’ve noticed this one growing in importance over the last few years as both clients and providers appear more willing to innovate but sadly most partnerships are still based on industry standard models that I believe are flawed.
To illustrate let’s look at the traditional agreements that pay your partner an hourly rate with bonus / penalties based on performance against traditional KPI’s. Have you ever noticed these KPI’s can be confusing and conflicting? How often have you sat in a QBR where you complain that AHT is up but your partner responds that their exceeding FCR and if we try to reduce AHT FCR will go down. Who’s right?
I believe these traditional partnership models fail to drive innovation. People will achieve the goal you set for those things you choose to measure but that just means you’ll be stuck with the operational performance of the past. As a provider who’s paid on an hourly basis what motivation do I have to truly drive innovation that might cut AHT in half, or double FCR. Both things will negatively impact my bottom line.
I prefer relationships that are truly “Partnerships”. As my partner if you make investments that drive milestone improvements in my business I want you to share in the rewards! A relationship that is truly a “Partnership” must provide a means and a mechanism to reward the provider should they invest in technology or practices that drive tangible improvements. This can come in the form of gain sharing or other mechanisms and there’s no doubt that crafting these agreements can be challenging but I encourage you to try.
Ultimately any partnership needs two willing parties so when you raise the topic of partnership models embrace the provider who is willing to explore innovative approaches that share risk and reward. These providers are far more likely to drive innovation in your business.
I’ll circle back to what I emphasized in my introduction. Even if you effectively use my five criteria to find and choose a great partner your job is not done. Employee engagement is my number one criteria and is the secret to unlocking a great support experience for your customers. The commitment to “serve” the front line team is a shared responsibility that you must own with your partner. Embrace it, have fun with it; fund it. Make your program the one that everyone in the center wants to work on! The dividends you’ll receive will be seen in their smiling faces and the call you get from your CEO complimenting you on record breaking customer satisfaction.
Robert Lyons is a Senior Partner at the RightShore Group. Robert has over twenty years’ experience in strategic planning, service delivery execution, and operations leadership focusing on customer experience. Robert provides advisory services to fortune 500 clients on their customer experience strategies.
To contact the RightShore Group please email us at email@example.com.