How the Economy is Affecting Decisions to Outsource Customer Care -- End-User Survey Results
 

How the Economy is Affecting Decisions to Outsource Customer Care -- End-User Survey Results

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Frost & Sullivan Contact Centers Strategic Analyst Michael DeSalles discusses the results of a survey of contact center decision makers on business priorities, techology adoption, and future ...

Frost & Sullivan Contact Centers Strategic Analyst Michael DeSalles discusses the results of a survey of contact center decision makers on business priorities, techology adoption, and future initiatives.

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How the Economy is Affecting Decisions to Outsource Customer Care -- End-User Survey Results How the Economy is Affecting Decisions to Outsource Customer Care -- End-User Survey Results Presentation Transcript

  • How the Economy is Affecting Decisions to Outsource Customer Care- End-User Survey Results Michael DeSalles Strategic Analyst June 17, 2009
  • Focus Points Introduction Contact Center End-User Survey Results Outsource Provider Commentary Conclusions and Recommendations 2
  • Introduction • For outsourcing engagements, what are contact center organizations planning and doing in this down economy? • Frost & Sullivan surveyed 332 contact center decision makers in Dec 2008 on business priorities for 2009, technology adoption and future initiatives • Our observations and recommendations focus on the current economic climate 3
  • Demographics - Primary Verticals Which industry vertical is your company in? Primary Industry Vertical (N=332) Retail & Consumer 18% Financial Services 16% Communications 15% Healthcare 13% Travel & Hospitality 7% Government & Education 8% Outsourcing 6% Others 18% 0% 10% 20% 30% Note: Proportions may not add up to 100% due to rounding 4
  • Demographics - Primary Functions Thinking about the contact center(s) you currently manage, what functions do your contact centers serve? Primary Functions of the Contact Centers (N=332) Customer service 86% Help desk 70% Tech support 53% Order processing/entry 35% Employee services 30% Collections 25% Telemarketing 19% Others 3% 0% 20% 40% 60% 80% 100% Note: Multiple mention question. 5
  • Demographics –Contact Center Size Approximately, how many call center seats does your company have, including all divisions, branches and subsidiaries? Contact Center Size by Number of Seats (N=332) 10-99 49% 100-499 23% More than 500 26% Don't Know 3% 0% 20% 40% 60% Note: Proportions may not add up to 100% due to rounding 6
  • Demographics - Languages Does your contact center(s) support languages other than English? What other languages do your contact center(s) support? Support Languages Other Than English Contact Centers Supporting Other Languages (N=332) (N=208) Spanish 89% Yes 63% French 29% German 20% Italian 16% Portuguese 12% No 37% Others 13% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% Note: Multiple mention question. 7
  • Outsourcing of Customer Care Operations Do you outsource your customer care operations? Outsource Customer Care Operations (N=332) Yes, some 29% Yes, all 5% No 64% Don't Know 2% 0% 20% 40% 60% 80% 8
  • Reasons For Outsourcing Customer Care Operations What are the main reasons for outsourcing your customer care operations? Reasons for Outsourcing Customer Care Operations Lower Costs 63% Language Skills 36% Higher quality customer service 36% Focus on core competencies 30% Market focus 19% Skills 18% Vendor expertise 18% Other 4% 0% 20% 40% 60% 80% Note: Multiple mention question. 9
  • Importance Ranking for Outsourcing Customer Care Operations Please rank in order of importance the following factors for outsourcing customer care operations. Importance Ranking for Outsourcing Customer Care Operations Rank # 1 Rank # 2 Rank # 3 Cost reduction 46% 35% 17% Not our core competency 32% 26% 38% Outsourcers provide excellent 22% 36% 38% customer care 0% 20% 40% 60% 80% 100% Note: Proportions may not equal 100% since ‘don’t know’ responses are not displayed. 10
  • Primary Reasons For Having Customer Care Operations In-House What is the primary reason for keeping your contact center operations in-house? Primary Reason for Having Customer Care Operations In-House Control of people, processes, and technology 45% Customer service 28% Cost 13% Labor pool and high skill level 5% Market focus 3% Other languages 1% Requirement for high level of English 1% competency Others 4% Don't Know 1% 0% 20% 40% 60% Note: Proportions may not add up to 100% due to rounding 11
  • Where Outsourced Agents are Based Where are your outsourced agents based? Where Outsourced Agents are Based Onshore 57% Offshore 51% Near-shore 20% Remote agents 17% 0% 20% 40% 60% 80% Note: Multiple mention question. 12
  • Work-At-Home Agent Model and Outsourcing How will the work-at-home agent model influence your decision to outsource? Work-At-Home Agent Model Influence on Outsourcing Decision We already use our own 39% home agents We will use an outsourcer 21% for home agents We will use a combination of in-house home agents 21% and an outsourcer We have no plans to use 20% home agents 0% 20% 40% Note: Proportions may not add up to 100% due to rounding. 13
  • Future Outsourcing Destinations In what regions do you plan to expand outsourcing of contact center operations in the next 2-3 years? Expansion Plan of Outsourcing Contact Center Operations in Next 2-3 Years India 38% Mexico, Central and/or South America 18% Philippines 15% Eastern Europe (Czech Republic, Poland, Russia, Turkey and/or 4% Ukraine) Western Europe (Belgium, France, Germany, Italy, Spain, and/or 4% UK) Other 3% Don't know 15% No plans to expand 32% 0% 20% 40% Note: Multiple mention question. 14
  • Impact of Current Economic Climate on Decision to Outsource Will the current uncertain economic climate influence your decision to outsource your contact centers by: Impact of Current Economic Climate on Outsourcing Decision Keeping outsourcing 38% levels the same Increasing 26% outsourcing levels Decreasing 25% outsourcing levels No effect at all 8% Multi-sourcing to 4% multiple vendors 0% 20% 40% Note: Proportions may not add up to 100% due to rounding. 15
  • Number Of Outsourcers Utilized How many customer care outsourcers do you utilize? Number of Customer Care Outsourcers Utilized One 31% Two 34% Three 14% Four or more 15% Don't Know 6% 0% 10% 20% 30% 40% Note: Proportions may not add up to 100% due to rounding 16
  • Interview Feedback Given the current economic downturn, what do you believe is the net effect on your plans for business growth? “Our pipeline is full…downturns are great for outsourcers” “Traffic volumes are down due to the economy” “Deal flows are good..seeing specific call volumes..robust demand for LATAM geographies (bilingual and English Support)..Panama has proved to be good for us…” “We had unanticipated vertical growth ..…largest in wireless and telecomm.. “ “Some insurance growth…good news in financial services… not as much churn…they are trying to displace their competitors..” “There is movement in industries where consumers buy new products(Telecomm/wireless)…fixed telecomm more stable ” “Overall cost going up…this means price increases for some clients” 17
  • Interview Feedback Given the current economic downturn, what do you believe is the net effect on your plans for business growth? “Growing sector:…little behind ..is Healthcare…we’re on the tipping point of that vertical outsourcing in a significant way..only 10% outsourced…getting better feel for how it’s working.. …2% of global revenues..payer market…$40M part of bus…long process to outsource…3-6 mo. ….sometimes a year before they buy… Provider calls…focus on skills sets that are transactional..PI..or India…large number of nurses that PI exports..types of jobs supporting healthcare…a great growth story” “Lots of pressure on cost .seeing big client global vendor consolidation and move to get cost out of the equation..” “New companies….a lot in the pipeline right now…have to sell hard..18 mo.-2 yr sales cycle…” “Call volumes down over a broad spectrum (verticals)…must simply improve quality and customer sat. and lower call in rates…big growth opportunity!.. 1. Selling solutions.. 2. Growing share of live agent interactions 18
  • Factors Influencing Selection of Outsourcing Partners Rank the top three (3) most important factors that influenced the selection of your outsourcing partner(s)? Influencers for Selecting Outsourcing Partner(s) #1 Reason #2 Reason #3 Reason Attractive pricing and cost structure 26% 18% 13% Expertise in and understanding of my industry 21% 20% 17% Vendor experience and world-class agent talent 13% 9% 13% Security certifications, disaster recovery and data privacy 12% 16% 14% safeguards Site location and time zone proximity 10% 14% 6% Advanced technology and infrastructure 10% 13% 17% Previous long-term relationship. stable and reliable 10% 7% 16% 0% 20% 40% 60% 19
  • Future Plans To Bring Contact Centers Back In-House Do you have any plans to bring your contact center operations back in-house? Why are you considering bringing your contact center operations back in-house? Future Plans to Bring Contact Center Operations Back Reasons for Considering Bringing Back Contact In-House Center Operations In-House Customer complaints of poor 43% service Yes 38% Inferior agent English skills 33% Promised cost savings not realized 33% No 34% Lack of support from Senior 26% Management Brand protection or strategic 19% direction Don't Know 29% Outsourcer did not meet Service 12% Level Agreements (SLA’s) 0% 20% 40% 60% 0% 20% 40% 60% Note: Proportions may not add up to 100% due to rounding Note: Multiple mention question. 20
  • Conclusions Customer service, help desk and tech support are very well represented in call centers today. Healthcare is a growing vertical for outsourced contact centers. Spanish will continue to be the lead language. Respondents report loss of control is the primary restraint to adopting outsourcing. Trend to multiple customer care outsourcers for a single client. Placement of remote service reps, esp. home agents, is gaining a lot of traction in an outsourced model. Outsourcers can counter client moves to bring operations back in-house. The current economic climate is likely to have a net positive effect on overall outsourcing growth. 21
  • Next Steps Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth, September 13-16 2009, Hyatt Scottsdale Resort & Spa at Gainey Ranch, Scottsdale, AZ (www.gil-global.com) Register for the next Chairman’s Series on Growth: The CEO's Growth Team™: Marketing’s Role in Driving Growth (June 2nd) (http://www.frost.com/growth) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 22
  • Your Feedback is Important to Us • What would you like to see from Frost & Sullivan? • Growth Forecasts? • Competitive Structure? • Emerging Trends? • Strategic Recommendations? • Other? Please inform us by taking our survey. Frost & Sullivan’s Growth Consulting can assist with your growth strategies 23
  • For Additional Information Jake Wengroff Ashwin Iyer Dir. Of Corporate Communications Global Program Director Information & Communication Information & Communication Technologies Technologies (210) 247-3806 (650) 475-4537 Jake.wengroff@frost.com Ashwin.iyer@frost.com Craig Hays Director of Sales Information & Communication Technologies (210) 247-2460 Craig.hays@frost.com 24