outsourcing financial failure and success[1]

Offshore Outsourcing:Nearshore Outsourcing: Preventing/Creating a Catastrophic Financial Failure

BPO Research Series

Unlocking the Economics of your Internal and External Relationships

Framing Effect

• A social science theory which helps describes the ways people (customers) make decisions or draw conclusions.

• A frame is defined as a decision maker’s subjective conception of the outcomes, actions and contingencies associated with a choice or a situation.

• A person’s psychological frame is made up of norms, values, habits, prior experiences and personal character of the decision maker.

• In this study (2 cases), the hypothesis being tested was that customer frames, consisting of negative perceptions regarding individuals that speak with a non-US accent, negatively impacted the perception of service provided by such individuals.


Hypothesis about the presence of a Framing Effect

Differences noted between near-shore and offshore customer satisfaction scores is not a reflection of location, but rather a

reflection of negative attitudes and prejudices (research term: Framing Effect) towards individuals with non-US

(foreign-sounding) accents.


Goal

• To prevent a multi-million dollar mistake by either terminating a partner relationship (Cases 1 & 2) or retracting offshore work (Case 1).

• Conduct investigative Customer Experience research to create an actionable solution to combat negative customer service perception.

• Use research findings to create cost effective and timely solutions that result in faster returns versus large program changes.

• Do it quickly.


Offshore PartnerCase 1:

• Customer Service queue of a fortune 500 technology company

• More than 10,000 completed real-time post call surveys using EQM (www.externalqm.com) over 6 month period

• Customer comments about experiences with offshore service center generated alarm with the Executive Team. Executive Team began examining options - terminate BPO partner for another, bring service center back on-shore, etc.

• Research and analysis (conducted by Customer Relationship Metrics - CRM) revealed that despite generating better first call resolution (FCR) performance, offshore service agents were earning significantly lower customer satisfaction ratings.


Nearshore PartnerCase 2:

• Nearshore customer service queue of global manufacturing company examined

• Approximately 5,000 completed real-time post call surveys using EQM (www.externalqm.com) over 6 month period

• Service agents were classified into one of two categories:

• Individual has a no discernable accent (US accent)

• Individual speaks with a non-US accent

• Research and analysis (conducted by CRM) revealing that given relatively equal first call resolution (FCR) rates, customer service agents with non-US accents were perceived as delivering lower levels of service by customers.


Call Resolution74.08% 76.22%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

Non-US Accent US Accent

Relatively Equal resolution rates generated by

both agent groups


Customer Satisfaction

8.57

8.738.75

8.84

8.42

8.68

8.49

8.63

8.42

8.58 8.59

8.64

8.00

8.10

8.20

8.30

8.40

8.50

8.60

8.70

8.80

8.90

9.00

Understood reason

for call

Professional Knowledgeable Completeness of

response

Confidence Made customer feel

valued

Foreign Accent

No AccentUS Accent

Non-US Accent


Solution•Case 1: BPO relationship and offshoring saved – Solution from CRM included a multi-faceted approach, as elimination of BPO partnership could not be accomplished cost effectively. Solution was specific to results of client circumstance, culture, and business objectives. Current performance is exceeding goals and objectives.

•Case 2: BPO nearshore partnership saved - Solution from CRM included a multi-faceted approach for this nearshore BPO partner. Solution was specific to results of client circumstance, culture, and business objectives. Current performance is exceeding goals and objectives.

•Conclusion - Based on these findings, we can conclude that in these two cases US customers “framed” their judgment of agent service based on accent. This conclusions may not apply to all organizations / partnerships. Customized research projects can be designed to answer specific questions to allows for the creation of the right solutions.


For More Details

Carmit Diandrea

VP, Research and Client Services

[email protected]

outsourcing financial failure and success[1]

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