Placebo Effect - Phone Support & Outsourcing

chakky's picture

Internet has come of Age. Today people vie for online content and have started using the Internet for anything and everything. Right from blogging to the oldest application, email, the WEB as its best known is becoming part and parcel of our life like our televisions, electricity etc.

Web Hosting companies through the backend play a very important role in this spread and make this wide usage possible. Through competitive pricing , excellent customer support via tickets and chat, the business has grown big and lot of web hosting companies have come of age, reducing prices and encouraging outsourcing. Today we have reached a stage where cheap and sturdy servers, coupled with feature rich control panels and helpdesk systems to handle customer issues have all but systemized making web hosting effective enough for any layman to host his site.

But from here to where is the next question? All webhosts provide cheap support, customer loyalty is only relevant to the point where the next cheapest but reliable hosting company brings out a plan!

Everyday resellers and new web hosts sprout, with just the idea to make it a viable enough business so that they can sell it to some bigger hosting company at profitable margins. No one thinks long term and those who do have to struggle with lower prices to compete with the short term traders whose only idea is to increase customer base to make it viable for a sale whatever be the cost. Discount offers, special offers whatever else to incite a customer to jump from his existing webhost is the way of life. Some lose the gamble and its becoming like a stock exchange with traders running aghast or happy at the way the nasdaq points move down or up.

Customers trade their loyalty to :
a) Cheaper prices
b) No differences between hosts. All provide cheap plans, good support and reliable servers mostly. But they all either sell off or in the rush to compete for increased customer base, compromise on quality of servers.
c) Offices are non existent. Servers are co-located or got from NOC and they have no one to respond to them or handle them. All they know is all if not most support is outsourced to some other country specially India. So patriotism is out of the window.
d) If they try to chat or call , they realise that they would get as response, a accented english with no idea of the cultural differences or understanding of the US culture fully and hence get frustrated trying to explain beyond technical aspects. Though its improving, tech support is one area that has yet to reach the standards.
e) Even if you bring in Indians or South Americans to handle phone support, their english will never be similar to the US English and hence customers will never touch base with the company that does this.

How do we workaround this? American Phone Support !

As everyone has witnessed within their own lives, economies, of individuals or nations globally go through cycles of up and down. If today its cheaper to outsource to India, the rate of development and the cost of living rises over there too and it will reach a stage where the trend gets reversed. More and more countries would prefer to come back to US and utilise the American skills. American Unversities are one of the most advanced universities in the world in terms of academics and infrastructure. Its only their laid back way of life and their customisation according to individual needs that dilute the quality of Americans coming out.

Thats when our company top management decided to role out the American Phone Support bobcares. Imagine your customer calls and for simple issues, his call is directed to Americans who understand the difference between Washington DC and Washington State, someone whom the customer can associate with. A person who could give simple help via phone and then proceed to handle complicated issues via mail. This would mean that the customer gets a feeling there is a live voice behind the scene of this web host and the client would feel it better knowing that if things go wrong, he will get proactive support rather than wait for the email response to come sometime later. He will feel great that there is a person 24/7/365 rather than a answering machine.

This is the next stage to customer delight and it will be something that will be the next most wanted thing for Web Hosts who intend to stay in this business for long.

The customer gets a placebo effect that his support company is staffed by fellow Americans and he gets the confidence, knowing he can talk via phone to anyone anytime during the day or night to get solutions and stop feeling frustrated that the tech support guy cannot understand his english.

Cost Will be too high?

Calls costs for implementing a phone support setup in US would vary anywhere between 30 cents per minute to 2 dollars a minute based on the package of minutes bought.

You cannot discount the fact that US economies have one of the highest cost of livings and at the same time taxations. Also fewer Americans prefer to live outside their country, a patriotism, that developed US to its present stage of strength which is very highly respected. Hence when you employ Americans for phone support you can expect that whether they get a call every minute of their shift or just one call the whole day, they need to be paid by the hour they sit to work. Hence this variation comes in and pricing will be slightly higher than outsourced from India or China or some South American country but still competitive than employing inhouse.

If you decide to start your own phone support which is the best, you need to think of the following:
a) Cost involved in recruiting, training, setting up infrastructure & managing the employees.
b) Cost involved in terms of salary, expected hikes, loss of employee due to resignations, necessity to move to bigger office space to handle the increased personnel etc.

The best solution would always be to follow the new Business Model, "Global Delivery Model" where you use a mix of onsite and offsite teams to handle your work having the best of two worlds. Your clients get American phone support and Indian tech support via the backend. This would mean that you would have a quality mix at the most cost effective pricings.

Studies have shown that there is between 30% reduction in your overall expenses if you decide to outsource your work to third parties within the country and about 50% outside the country to say places like India.

In the long run, taking phone support with American employees is best done by outsourcing rather than inhouse specially when its a added feature. You can spend the difference in amount as well as the time & efforts on further marketing and research rather than setting this up.

Phone support reduces profits?

Its a question many people ask.

Some don't as they do not have the ROI(Return Over Investment) to do it. Such companies need to spend some more time to reach that level.
"Profits = Revenue - Cost"
Revenue is earned with your increased customer base.Phone support brings it in when people know they can talk to someone at the other end.Cost can be reduced by outsourcing.

So when you start phone support services, prefer to look to outsource as it reduces the overhead. An excellent combination to average your outsourcing costs would be to :

a) Outsource your email support to a cheaper source say to India, where english is spoken by a lot of english speaking graduates.

b) Outsource the Phone Support to companies within US which brings in the placebo effect that ensures the clients feel comfortable calling up.

Why would you need to start? Businesses, like nature, has shown that Charles Darwin's theory of " Survival of the fittest" is applicable to them too!
Changes in your offerings that add value by bringing in innovations, disruptive or constructive so that you have the edge, is the need of the hour.

This is the future and is something you need to plan for or else you will get left behind....

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