Pay for Customer Service…It’s Worth It

I’ve been traveling overseas quite a bit lately and I’ve been noticing an interesting practice that doesn’t usually happen in the States…customer service calls that charge you per minute. My first reaction was that it would never fly in the States. You expect me to pay for what?! Perhaps it’s the way we are raised, feeling entitled to “the customer is always right” or “service with a smile.” In many ways, that’s a good thing. We should expect that. You are paying for services rendered. I won’t get into it in this post, but boy do I have a greater appreciation for service in the States versus many places I’ve been in Europe. And yes, there are places with fantastic service in Europe, but on the whole? No contest.

Then I noticed something else. I never had to wait very long for a rep. And the reps never seemed rushed to get me off the phone. Perhaps part of it is the more relaxed and easygoing nature of Europeans–You listening here, my fellow Americans? We could learn to lighten up a bit–but I figured something else might be going on here as well. Then I ran through some numbers and what I found was interesting. Perhaps we don’t need to rush all of our call center jobs overseas. Think about this:

$3/hr or $0.05/min (offshore CSR), $9/hr or $0.15/min (local CSR)
These numbers are based on real numbers from a recent poll of 400 companies outsourcing their call centers. I should also note that at $9/hr that is more than the minimum wage in any State. In today’s tough times, I can name a dozen out-of-work friends who wouldn’t mind making $9 bucks an hour.

8.5 min (offshore CSR), 7.5 min (local CSR)
Average resolution time for an order fulfillment call center case. Even for service calls that take shorter or longer, the following calculations will still trend the same. Frankly, I think I’m being generous in saying that a local resource is going to clear a similar call request 1 minute faster than an offshore resource who is not a native speaker, will not pick up the local idioms and colloquialisms, and has to deal with irate customers mad that they are speaking to someone in a far off land. Not to mention the upsell that a native will be able to hustle.

So here we go:

A call that takes 8.5 minutes will cost the company 8.5*0.05 = $0.425 for an offshore CSR. That same call at 7.5 minutes for a local CSR will cost 7.5*0.15 = $1.125. But wait! Remember that the customer pays $0.10 a minute, so $1.125 – 7.5*0.10 = $0.375. That’s cheaper than the offshore scenario!

Still doubt it? Try that same logic for a 20 minute call (don’t forget the 1 minute discount for a local CSR), and it is still cheaper for the local CSR. Go ahead, do the math, I’ll go grab a drink…

…see? Of course I grossly oversimplify here and people will counter with insurance and benefits and the sort. Then I would counter with additional overhead of overseas management and training. Then one might counter with taxes and attrition. And I would respond with economic stimulus and customer satisfaction metrics. We could hash those nuances all day and at the end of the day, a happy customer is a repeat customer. Employers, you still need to train your reps better and give them better tools, whether they’re overseas or back at home. This won’t fix that. Listen to your customers. We’re tired of getting jerked around dialing that damned 800-number.

So who is going to pay $0.10 a minute for a customer service call? Most Americans will start with, “not me.” Then they’ll see that Helen and Bob down the street were able to keep their house because of the extra money Bob makes as a CS Rep. They’ll be thrilled when the unemployment rate improves and walking down main street on a Saturday afternoon is back to the way it used to be with everyone enjoying the sun, shopping, and having an ice cream cone with the kids. They’ll be glad that within 10 seconds, they were speaking to a live person–Liz, the wonderful CS Rep, who helped them fix that problem they were having with their credit card at the Apple Store trying to buy the latest iPhone. Even if that call took 30 minutes…isn’t $3 bucks worth it? I’m just sayin’.

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