Not So Fast!

Mark Stanley | March 20, 2012

Celebrating the return of call centers may be premature

The Canadian newspaper Globe and Mail ran an article on March 14, 2012 under the headline, “Busy

Signals: Why call centres came back.” The author, Sean Silcoff, make the case that “Overseas jobs are

returning to Canada amid high turnover rates and lower customer satisfaction with foreign

employees.” He explains that the reason why contact centers were outsourced to India and the

Philippines in the mid-2000’s to begin with came down to cost savings on labor. He then provides quotes

from companies referenced in the article claiming an improvement in customer satisfaction ratings. One

company claims that 82 per cent to 84 per cent of customers say they are “very satisfied” or “satisfied”

with (Primus’s) customer service – 10 percentage points higher than before the change.

On the face of it this sounds like very good news for the companies taking this path as well as for their

customers if the improvement in customer satisfaction scores are to be believed. But before they break

out the champagne, these companies would be well advised to do some soul-searching and consider a

few tough questions:

• Why was customer service outsourced in the first place? If the reason was purely economic,

what happened to the influence of the bean counters who made the original decision?

• Why did the outsourcer fail to maintain what was originally seen as a satisfactory standard of

service? In the beginning everything was good; so when did the bloom come off the rose?

• What was the true cost of the experiment to outsource and then unwind the process, including the

cost of customer churn?

• Most important of all, what is truly behind the recent increase in customer satisfaction ratings? Is

the service really better, or are customers simply happy that calls are being handled ‘locally’

thereby reducing the number of unemployed?

The purpose behind this kind of questioning should be clear: if the real reasons for the uptick in customer

service ratings are not fully understood, they will quickly plateau and decline – and we’re right back to

square one.

Ultimately it may come down to this: measuring customer satisfaction may not be the right yardstick to

gauge how well things are going. In fact, the Corporate Executive Board has conducted extensive

research, published in the Harvard Business Review in 2010, that found customer satisfaction

measurement is a poor indication of how well a given company is really doing. Their research compared

customer satisfaction to other similar measurements, including Net Promoter and Customer Effort – how

difficult it is for customers to get their needs met.

On a scale of 0 – 5 where 5 is best, the best indicator of Predictive Power for Repurchase and Increased

Spend turns out to be Customer Effort with a score of 4; Net Promoter came in at 3, and customer

satisfaction a distant third with a score of 1. The reason customer satisfaction fared so poorly is counter-

intuitive: 20% of satisfied customers intend to leave, while 28% of dissatisfied customer intend to stay.

In other words, simply measuring customer satisfaction may be a misplaced goal. If the aim is to

minimize churn and the impact of negative word-of-mouth, and increase the likelihood of repurchase and

increased spend, companies would do well to focus on Customer Effort as a more reliable measurement.

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