Politics and Outsourcing

Peter DeHaan: Author, Blogger, Publisher, EditorBy Peter DeHaan

It seems that “outsourcing” has been politicized. Once a word becomes politicized, as outsourcing was in the 2004 United States presidential campaign, all reasonable thinking stops and logic becomes, well, illogical.

Rhetoric steps in and common sense is relegated to lesser important things. Think of any major societal issue and it has likely been politicized by a one word rallying cry. Regardless of what the word is, or it’s original and true intent, proponents hold it up high as a emblem of virtue and all that is good, while opponents decry it as indicative of evil, being characteristic of what is wrong in the world today.

Twenty years ago, the word telemarketing was coined to put an apt and descriptive label on a nascent and promising industry; one that used the telephone to cost-effectively promote products, better service customers, and provide companies with a competitive advantage. But then that simple and benign word became politicized and now few people use it.

Those who still do telemarketing, have long since adopted a less emotionally-laden label for fear of verbal retaliation or psychological retribution. While those who vehemently object to telemarketing’s practice, wield that word as an offensive slur to convey their frustration against all they find unacceptable in businesses. In short, it is no longer politically correct to engage in telemarketing. A word is a powerful thing.

So, emotion and rhetoric aside, what is outsourcing? In it’s broadest, most general sense, outsourcing is having another company to do work for you that you could do yourself. This occurs at both the business level and a personal level – and more frequently then you might think.

Some common business outsourcing examples include: payroll, bookkeeping, human resources, building maintenance, cleaning services, telecommunications management, public relations, executive search, tax accounting, information technology, and, call processing. On the personal level, we outsource as well.

Consider the dry cleaners, car washes, tax accountants, lawn services, car mechanics, maid services, pizza delivery, catering, and so forth. In fact, anyone who provides a service is actually an outsourcer and we are all, in one way or another, consumers of outsourcing services.

Does this imply that outsourcing is a manifestation of laziness? Although that may be the case in some limited instances, the far more common and general reasoning is that outsourcing can reduce costs, save time, or result in higher quality. Sometimes outsourcers can provide two of these results or maybe even all three.

Another oft-stated justification for outsourcing is that it allows organizations to offload nonessential tasks, thereby permitting them to focus limited resources (which is a reality for every organization limited resources) on their core competencies. Some organizations have found it beneficial to even outsource their core competencies. Why not if it can be done cheaper, better, or faster by a specialist?

Therefore, we can correctly conclude that the entire service sector provides outsourcing services, that we all use these outsourcing services, and that there are many wise and beneficial business reasons to do so. So why all the flap over something that is so common and so pervasive?

Although the word “outsourcing” is the moniker that has been villainized, this is a grossly unfair and ignorant generalization. What the focus and outcry is truly about is offshore call center outsourcing that is done badly. Offshoring is not outsourcing, but rather a small subset of it.

In fact, the majority of call center outsourcing today is reportedly intra-country, that is, it is companies located within the United States, outsourcing call processing work to call centers located within the United States. Yes, there is an increasing trend towards offshore call center outsourcing, and it may one day represent the majority, but for the near future it embodies a minority of call center outsourcing, where it is projected to remain for the next several years.

This is in no way to imply that I am against offshore call center outsourcing per se. I am, in fact, a hard-core, free-market, laissez-faire idealist. At least until my phone call is answered by someone who I can’t understand, be it due to a heavy accent or words that are used in a way that simply doesn’t make sense. While such a result may be indicative (but not necessarily so) that a call center is located outside the country, it is critical to point out that the converse should not be assumed either. That is, every agent who speaks with clear and comprehensible English, is not automatically US-based.

Just as lucid communication can occur with agents in other countries, severe communication hurdles can exist with agents located within our borders. The original and true frustration was not with the location of the agent, but quite simply with their ability to effective communicate in understandable and conversational English.

Politicians saw this frustration as a safe and universally acceptable cause on which to campaign. They made the false assumption that it was a location issue, put a wrong label on it (outsourcing versus offshoring), vilified it, and promoted themselves as the ones who could solve the problem they defined. That’s politics!

The next step was to feed the fire by adding fuel to their argument. National security issues were brought into play, as was personal privacy concerns, since information was leaving the country to reside in a foreign-located database. The exporting of jobs was denounced, as was the harm that this was causing to the U.S. economy.

By the time the politicians were done, “outsourcing” (or more correctly, offshore call center outsourcing) was portrayed as a threat to all that is American. It was the enemy and it had to be stopped. Rhetoric is persuasive and as such, a word becomes a powerful thing.

The results of all this are sad, but predictable. First, people learned that is was okay to be intolerant of agents who spoke with an accent or hadn’t yet fully mastered the English vernacular. Unfortunately, some people went beyond intolerance, with their attitudes spilling over into hatred, bigotry, and abhorrence. Second, we were taught that any form of call center outsourcing – in fact, all outsourcing – is an increasingly unpatriotic and unacceptable act.

Lastly, and most dangerously for the industry, is a spate of bills that were introduced on the national, state, and local level to control, limit, or restrict the inbound call center industry. Although the intent of these bills are ostensibly focused against the offshore call center, their broad and inclusive language is all-encompassing, covering all call center outsourcers (remember that U.S.-based call centers handle the majority of US outsourcing work) and has widespread ramifications for the in-house call center as well.

Less anyone misunderstand what I am saying or the way in which I communicated it:

  • Outsourcing is not synonymous with offshoring.
  • I support outsourcing as good, beneficial, and necessary and I am passionate about the importance and value it.
  • Offshore outsourcing is here, it is real, and the marketplace should decide its position in the global economy.
  • The real enemy is legislation, which if left unchecked will forever and detrimentally change the entire call center industry, be it outbound or inbound, outsource, or in-house, as well as offshore.
  • I love the USA – it’s the politicians that drive me crazy!

Don’t let the politicians skew your understanding of outsourcing.

Peter DeHaan is a magazine publisher by day and a writer by night. Visit www.peterdehaan.com to receive his newsletter, read his blog, or connect on social media.

Why Area Codes Change

Peter DeHaan: Author, Blogger, Publisher, EditorBy Peter DeHaan

As telephone numbers are assigned, the availability of numbers within an area code diminishes. In order to make sure that there are always numbers available, usage is analyzed, number exhaustion dates are projected, and steps are taken to provide for more numbers.

Although short-term steps can be taken to deal with and respond to this, the long-term solution is either an area code split or an area code overlay. Both methods accomplish the same goal of making more numbers available; however, each has its own set of strengths and weaknesses.

An area code split means that the geographic region of the area code is divided in two. One part will keep the same area code, while the other section must switch to a new area code (but everyone will retain their seven-digit number). There is a transition period for this, called permissive dialing, in which either the old or new area code can be dialed for the effected section. After a time, mandatory dialing goes into effect. At this point, any call to the new region using the old area code will not go through. These numbers eventually become available for reuse. Splits are not popular with businesses, as it requires printing new stationary, changing all advertising, and many other changes, including reprogramming phone systems. (In rapidly growing areas, to avoid the need to repeat this process in a few years, sometimes a three-way split is made at the same time. This divides an area into three sections, one retaining the original area code and the other two each getting their own new area code.)

An area code overlay means that a new area code is assigned to the same geographic region as the existing code(s), which is running out of numbers. With an overlay, no one needs to change area codes. However, if it is not already implemented, ten-digit dialing becomes required for all calls, even local numbers. All new number assignments are in the new area code. As such, ordering a second line could result in a number with a different area code. Overlays are not popular with most consumers, as they do not want to dial ten digits on every call, nor remember different area codes for friends and neighbors.

If you are in area that is running out of phone numbers, you can expect your local phone company to provide ample notification in the form of letters or bill inserts, giving you time to make the needed plans and adjustments. However, do not expect to be notified of changes outside of your area code. Therefore, if your area code changes, it is up to you to notify those who call you from outside your area. Likewise, others will need to notify you should their area code change.

Dealing with new or changing area codes is not easy or enjoyable, but it is necessary to ensure that there is an adequate supply of numbers for future growth.

Peter DeHaan is a magazine publisher by day and a writer by night. Visit www.peterdehaan.com to receive his newsletter, read his blog, or connect on social media.

The Impending “Do Not Market” Threat

Peter DeHaan: Author, Blogger, Publisher, EditorBy Peter DeHaan

Have you heard about the onslaught of Do Not Market laws proposed at the local, state, and federal level? You haven’t? Well, there is good reason that this pending legislation has caught you unawares. The fact is that it doesn’t exist – per se.

However, in reality there is a plethora of existing laws and proposed legislation that serve to significantly restrict how we all market our products and services. In total, these well-intended but overreaching and imprudent bills combine to effectively amount to one massive Do Not Market law. What is at stake is our ability to promote our businesses and make sales. Once these restrictions are placed on every business, the future of the U.S. economy and its viability as a nation will be in jeopardy.

Less you think this is hyperbole, consider what would happen if you were effectively prohibited from any and all marketing activities. You would be forced to rely on a “build it and they will come” approach to sales. In effect, this would reduce your sales and marketing departments to the mode of reactive order-taker. What would happen to your sales numbers? Most likely business would decline, maybe even going into a free fall. You would stop hiring and begin laying off staff; capital investments would be put on hold; expansion plans would be terminated. This would ripple through the economy, and a recession would follow.

Okay, I admit, this is a tad bit reactionary. But if we truly couldn’t do any marketing, this becomes a dreadfully real and inevitable scenario. Surely, you say, our elected officials wouldn’t go so far as to legislate our economy into disarray by prohibiting all forms of marketing – would they? Let’s review:

  • For several years, we have been prohibited from sending unsolicited faxes. What was once viewed as an efficient and cost-effective alternative to direct mail was summarily made illegal. Nix the fax.
  • The bellwether bill was the national Do Not Call law and its numerous state counterparts. This devastated calling consumers. Given its immense public support and self-serving political expediency, we should also expect similar future limitations placed on contacting businesses via phone.
  • The CAN-SPAM Act of 2003 (yes, it was four years ago) put onerous restrictions on email marketing messages and solicitations. Since enforcement of this act is both challenging and cumbersome, it has yet to make a dent in spam, its intended target, which continues to grow unrelentingly. It has, however, given conscientious businesses pause in what content they include in email messages and to whom they send them. The honest have been dissuaded, while the crooks continue unabated. Plus, with the implementation of spam filters at numerous junctures along the path of an email message, there is serious doubt as to how often our carefully crafted and legally compliant messages actually get through to the intended recipient. To make things even more cumbersome on the law-abiding, there are proposed Do Not Email bills floating about.
  • Consider direct mail. The postal rate hike was discouraging enough, but many Do Not Mail bills are in the works as well. So, even if we can afford it, mailing promotional items may become moot.
  • Many other forms of marketing are facing restrictions on a local or regional basis, including billboards, the use of spotlights and PA systems, door-to-door selling, handing out flyers, the size and placement of signage, and so forth. Used wrongly, these can be deemed a nuisance by the buying public, but why should everyone be penalized for a few overzealous marketers?

What is left? Certainly broadcast marketing (radio and TV) is one option. With broadcast media, there are already many balanced, appropriate, and accepted laws on the books that govern ad content. Nothing more is in the works at this time. Unfortunately, radio and TV are not effective media for many businesses and out of the question for many marketing budgets. Besides, with the proliferation of DVRs (digital video recorders), how many viewers are zipping past those television commercials anyway? Concerning radio, be aware that more and more listeners are finding their music online, effectively bypassing commercial radio.

Perhaps the most viable remaining category is print media (newspapers, magazines, and newsletters). Like broadcast advertising, print media enjoys time-tested legislation that regulates what can and cannot be included in ads. Print media can be distributed according to a subscription-based model (readers pay to receive it) or an advertiser-based model (companies pay for it to be sent to qualified individuals).

There are two challenges with print advertising. The first is finding the right publication that addresses your target audience. The second is designing an effective ad. Herein is the painful reality of print advertising: a great ad makes things happen; a bad ad does nothing. Interestingly, the only threat to print advertising is not legal, but rather environmental, since no-longer-needed copies end up in the landfill. (This could be the impetus for future legislation.) To address the issue of paper waste, many publications offer electronic alternatives. Over 10 percent of Connections Magazine subscribers currently receive their copies this way; Byte magazine has been 100 percent online for over ten years. This is definitely a trend of the future.

Last, but certainly not least, is the Internet. In the World Wide Web there resides all sorts of interesting and intriguing promotional opportunities. Website sponsorships and banner ads are two prominent options. Search engine advertising is growing at a phenomenal rate. Certainly, having a company website is a requirement. Trying to market in today’s economy without a website is a foolish and shortsighted endeavor, filled with frustration and wasted resources. Increasingly, companies that lack websites are immediately dismissed by prospective customers, who view them as second rate or, worse yet, not even viable. For the progressive, future-focused promoter, consider how SecondLife, MySpace, and FaceBook fit into your marketing mix.

So faxing, calling, emailing, mailing, and broadcasting are increasingly limited marketing options (even when there is an “existing business relationship”). The remaining opportunities exist in the worlds of print media and Internet marketing, which may well become the final frontier of advertising and emerge as the only effective and successful marketing medium in the future.

Peter DeHaan is a magazine publisher by day and a writer by night. Visit www.peterdehaan.com to receive his newsletter, read his blog, or connect on social media.

The Future is Now: Learning from Netflix

Peter DeHaan: Author, Blogger, Publisher, EditorBy Peter DeHaan

Go back with me a few years. Internet-centric companies were the next big thing. It was purported that they would change how business was done, render traditional commerce models obsolete, and usher in a new way of valuating companies – at historically unfathomable and untenable levels.

They were the dotcoms! Their basic premise was insightful, if not somewhat simplistic and naïve. With the pull of the ubiquitous Internet and the support of massive server farms, their business models (that is, their technological infrastructure) would be infinitely scalable, while customer service would be strictly self-service. This would keep costs down and the employee count even lower. Page hits and profitability would be the inescapable conclusion. Unabashed euphoria was everywhere.

The problem was that most people were not ready for and did not embrace self-service via the Internet. Not surprisingly, the dotcom bubble burst. Stock prices plummeted, bankruptcies ensued, and computer hardware was peddled for pennies on the dollar. Most dotcoms dematerialized even quicker than they had materialized. Some companies tried to retool, admirably adhering to the faltering dotcom mantra; it was an effort in futility. A few insightful innovators listened to their customers and changed their paradigms, wisely supplementing their limited and lacking self-service Websites with full-service human beings. Call centers were built and staff was hired. The clamoring dim of the masses was largely satiated and these adaptable entities survived. Some even thrived, having found the perfect mix of massive computer technology and the personal touch.

But what about Netflix? Born in the dotcom era, Netflix embodies the highly scalable, self-serve model that had failed most. Not only has it succeeded, it has done so exponentially and most effectively. For the uninitiated, Netflix is an Internet-based DVD movie rental service. Members log into the Netflix Website, browse a selection of 70,000 titles, putting requested titles into their personal queue, where they prioritize their preferred delivery order. The first movie generally arrives via mail the next day. There are no due dates, no late fees, and no shipping charges. Once viewed, the DVD is returned via a prepaid self-mailer. Upon receipt, Netflix automatically sends the next movie in queue. Netflix’s 42 regional shipping centers manage 42 million DVDs and ship 1.4 million a day. Their website includes movie write-ups, reviews, member ratings (1.5 billion of them), and recommendations for titles similar to what has been enjoyed by that member. Interestingly, Netflix customer service is 100% self-serve. [Netflix does have a toll-free number for prospective customers and an email address for media queries – which is how I found out about the toll-free number; I never did find it on their Website.]

With Netflix, there are no call center agents, no email support, and no text chat options. Its Website does have a help section; it is actually helpful. Its list of FAQs are truly questions that one might want to ask (I did); there is also context specific hints, instructions, and explanations. The site is quite intuitive and easy to use.

Given all this, is Netflix an anomaly or an indication of what is to come? Although it is currently atypical, it is also a model on how to effectively and successfully design a Website, support customers, and engage visitors. It is, or at least it should be, a peek into the future.

Although wide-scale defections from full-service options to self-service Websites is not an eminent threat, it is one, nonetheless. Businesses are therefore advised to pursue a two-prong strategy. The short-term – and continuously ongoing – initiative should be to look for ways to differentiate oneself from the competition. Make your company and services stand out; do what others don’t – or can’t; position yourself to be indispensable.

Long-term, be aware that commerce, in general, and customer service, specifically, will migrate to the Web. What can your business do to capitalize on this? The answer may have little to do with the business you currently run, but it will have everything to do with your long-term viability. Fortunately, there is time to consider, study, and plan for these eventualities, but preparation is requisite because this is a threat that won’t go away; ignoring it will be to your peril.

Peter DeHaan is a magazine publisher by day and a writer by night. Visit www.peterdehaan.com to receive his newsletter, read his blog, or connect on social media.

Anything for a Sale

Peter DeHaan: Author, Blogger, Publisher, EditorBy Peter DeHaan

Last year, my family’s two favorite TV shows were on the WB and UPN television networks. These two networks merged this fall to become the CW Television Network. Since our provider offered both networks, I was confident that would be no problem receiving the new network. I was wrong.

Repeated contacts to our provider via email resulted in no response whatsoever. My wife was aghast; I was not. My expectations were nil and they were squarely met, but that is a different story for a different time. Subsequent calls to our provider resulted in no satisfying results or tangible communication.

In the midst of this, a direct mail piece arrived from a competing provider. It offered a seemingly attractive price, free installation, and new equipment, including a DVR (Digital Video Recorder). This was an attractive enticement since our receiver and remote (free promotional incentives from our existing provider) were wearing out; the DVR would be a great bonus.

Upon calling the prospective provider, I talked to a helpful and confident agent, Karl. My first query was if they carried the CW network. Karl knew all about the merger (whereas most prior contacts did not) and assured us that they did in fact carry the new network. Additional probing revealed that my hope of slashing our bill was not to be realized, but still it was a worthy change as we would get the new network and new equipment, including a DVR.

My first clue that Karl’s veracity was questionable should have occurred when he insisted that no additional wiring would be needed to connect the second TV to the single receiver. I knew that this was technologically feasible via an RF signal as Karl explained, but I was dubious that such technology would be included in our free equipment. At this point, however, we had established a rapport and I trusted him to be both honest and ethical.

I confirmed my understanding of what Karl said and placed my order. A few days, the installer arrived and set up the system. He quickly gave an overview of its operation while the programming was downloading. I asked what number the CW network was. “That’s the new one, right?” he said. “I don’t know offhand, but it’s there someplace. If you can’t find, it call this number” and he handed me an information sheet.

Thirty minutes later and frustrated, I dialed that number. “I’m sorry,” the agent said. “I can only help you with installation issues and this isn’t an installation question. You’ll need to call the provider.” (We had apparently bought from an authorized agent.) The provider’s call center told me it would be an extra $5 a month to get the CW network. Mad at this unexpected news, I called my buddy Karl. Unfortunately, he was no longer my buddy. “I only deal with sales questions,” he stated curtly. “I can’t help you,” and he hung up.

My wife, who is tenacious in righting wrongs and fixing the unresolvable, took over our quest for the CW network. Over the next few days she called Karl, the service department, the installation line, and the billing department, as well as all the other numbers she was given. Several days and countless hours later, she resigned herself to accept that we had been had. During the course of our dealings, we have been told:

  • The CW Network is included in your service package.
  • The CW Network is available for only a dollar more a month.
  • The CW Network is available for five dollars a month.
  • The CW Network is not part of your local channels (even though it is a local channel, albeit an HDTV subcarrier).
  • The CW Network is available everywhere, but in your area.

There is much to be learned from this saga. One seemingly small miscommunication had widespread and far-reaching ramifications. One person’s words, either out of intentionality or ignorance, resulted in more that a dozen follow-up phone calls and a new customer who is angry and feels maligned. It will take great effort to overcome such a bad start. As such, several recommendations are in order:

  • Training: If the miscommunication was out of ignorance, then better training could have averted the whole ordeal. Unfortunately, the payback from training is not directly quantifiable, whereas sales numbers are. This is a dichotomous situation that managers must acknowledge and grapple with.
  • Call Monitoring: If the miscommunication was intentional, then some policing is in order. Active monitoring might have caught the error, could have eliminated the rouge employee, and certainly would have minimized all employees’ propensity towards untrue statements.
  • Incentives and Measurements: What gets measured gets done and what gets paid for gets done better. Again, if the miscommunication was intentional, then it was likely a calculated lie aimed at making a sale. Unfortunately, sales deaprtments measurement and reward systems often unwittingly serve for promote and foster activity and performance that is detrimental to an organization’s overall best interests. The big picture must be continually considered.
  • Third Parties Accountability: Whenever customer contact is relegated to a third party, control over transactions need to be retained and carefully tracked by the issuing party. Their organization is at risk and they need to be able to verify that they are being properly and ideally represented at all times. This involves more that just tracking monthly sales totals or costs per call.
  • Consistency: All staff need to have the same information, supported by the same technology, and reinforced by the same training so that they will tell customers the same thing. Furthermore, this needs to be synchronized with their websites and coordinated with marketing pieces: one message, many employees, multiple channels.
  • Quickly Salvage Mistakes: There is a ripple effect when a mistake is made. This occurs both within the organization has more and more people are pulled into the problem, as well as outside the organization as more and more people are told about the problem. Both take their toll. Front-line employees need to be empowered to act and to solve pressing issues, not encouraged to end the call just so they can take the next one.
  • Problem Resolution: After many calls, finally an agent apologized. But no one ever said, “What would you like done to resolve this?” No one ever suggested a course of action and recommended a solution.

At this time, we still do not have the CW Network, but Karl, who apparently will say anything to close the deal, did chalk up a sale.

Peter DeHaan is a magazine publisher by day and a writer by night. Visit www.peterdehaan.com to receive his newsletter, read his blog, or connect on social media.

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