"Some companies repatriate the customer service function because of lack of quality and other customer complaints. Dell Computers was one company that received flak when they first ventured into outsourcing, off-shoring their customer service. Companies have come to realize that you get what you pay for and low expense many times equals low training which translates into poor customer service."
Naveen Donthu, Katherine S. Bernhardt Professor of Marketing at Robinson, suggests that, "Since the top 20% of customers bring in 80% of the revenue for most companies, it may make financial sense to outsource customer service to the bottom 80% but keep customer service to the top 20% in-house."
Another trend in cost-cutting measures has been a move toward self-service. Self-service enables customers to find answers to their own questions using an organization's various channels, including the web, kiosks and automated phone systems. Studies show that self-service can save a company anywhere from six to more than 30 dollars per inquiry.
"Self-service is not only attractive from a cost standpoint," says Welke. "Done correctly, it can be very effective in increasing customer service satisfaction because it offers round-the-clock, immediate help, and in todayÕs technology-driven society, that's what consumers have come to expect."
However, according to Ravi Kalakota (former professor at Robinson) and Marcia Robinson in their book, Services Blueprint: Road Map for Execution, organizations face many challenges as they move from the stable bricks-and-mortar world to
a self-service world supported
by multi-channel service. "Today, organizations are racing to under-stand and create unique cross-channel experiences that reduce costs of service and increases sales."
Technology such as customer relationship management (CRM) software is helping companies navigate this new world. However, one of the obstacles for companies interested in adopting a CRM strategy has been the cost. Donthu says that while in the short term CRM technology may be costly, companies need to look at it as a long-term orientation. "With newer tracking CRM models, companies are not only able to provide a more positive service experience across channels, they can also cross-sell and up-sell each customer, changing the customer service function from a cost center to a profit center."
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