Behind The Numbers: Customer Satisfaction Not A BPO PriorityBehind The Numbers: Customer Satisfaction Not A BPO Priority
When deciding whether it pays to outsource business processes, you'd think that the impact on customer satisfaction would be a key indicator.
July 16, 2005
When deciding whether it pays to outsource business processes, you'd think that the impact on customer satisfaction would be a key indicator. But, not necessarily--for many companies, improved customer satisfaction isn't a critical BPO outcome.
Although many companies are outsourcing customer-related processes, only half consider improved customer satisfaction to be a barometer of success, according to a survey of 200 BPO customers InformationWeek conducted in conjunction with sister publication Managing Offshore and outsourcing advisory firm EquaTerra. More important are cost reductions, which two-thirds of surveyed companies use to measure BPO success, and improvements in process performance. Less than a third of those surveyed say they're seeing improvements in customer satisfaction.
Then again, 11% say they don't measure BPO initiatives in any meaningful way. So it appears BPO success isn't as important to some as ridding themselves of unwanted work. That conclusion is supported by the fact that the greatest percentage of respondents, 53%, list the ability to focus on other critical issues as a benefit of outsourcing business or IT processes. Midsize companies seem to have more success than their larger and smaller counterparts in achieving improved customer satisfaction through BPO efforts. Some 40% of companies with revenue between $100 million and $1 billion report such improvements, while just 30% of small companies say BPO initiatives improved customer satisfaction. Among large companies, the figure is just 25%. The competence of BPO partners could be what's holding back customer satisfaction. Less than a third of those surveyed say their BPO providers are delivering strong customer service--and if you don't give good customer service, then you can't expect customers to be very satisfied. What's your company doing to measure the success of its outsourced CRM initiatives? Tony Kontzer
Performance Reviews Does your company examine customer satisfaction to measure the success of its efforts to outsource business or IT processes? The Internet may be a revolutionary medium for communicating with and serving customers, but there are times when only person-to-person interaction will do. Call-center work is commonly outsourced, but companies also are establishing partnerships with BPO providers to off-load other customer-related tasks, including sales and marketing, customer analytics, and claims processing.
Demonstrated Returns Has your company seen higher customer satisfaction from its BPO initiatives? Few companies might actually see improved customer satisfaction from outsourced business processes. But there are ways beyond the obvious to measure if BPO arrangements are working, such as increased revenue or lower operating costs. Areas worth monitoring: More repeat orders, increased customer interaction, and a jump in the number of high-value customers. Even the speed at which critical customer-service decisions are made can be considered.
Across The Board Have your company's BPO initiatives resulted in higher customer satisfaction? Outsourced business-process initiatives are permeating business operations in many ways. While companies reporting higher customer satisfaction are in the minority, there are other benefits being reported. Greater flexibility and adaptability, more skilled workers, process improvement or transformation, and labor cost savings are among the returns by companies of all sizes, making business-process outsourcing--including CRM tasks--a worthwhile endeavor.
Leaders And Laggards Has your BPO provider demonstrated especially strong or weak performance in customer service? Companies are generally pleased with their decision to invest in customer business-process outsourcing. Three in five of surveyed sites say their arrangements are satisfactory. Nearly a third of respondents say that their BPO provider has demonstrated especially strong performance in handling customer needs. Only 10% of the 200 users interviewed report being dissatisfied, classifying their providers' performance as weak.
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