Pros and Cons of Customer Care Onshoring, Offshoring, and Nearshoring
There are a lot of outdated myths out there about outsourced customer care, and we’ve dispelled the biggest ones recently on the Vcare blog.
Outside of the common misconceptions, though, we often get questions from clients and customer experience executives about the Pros and Cons of their outsourcing options.
In this article, we want to break down customer service onshoring, offshoring, and nearshoring, giving you the full picture of risks and rewards associated with each model.
At the end of the day, whether you’re in retail and ecommerce, wireless and telecommunication, or a healthcare or insurance provider, you need to look at customer support holistically, not on a just on a transactional basis.
When you look holistically at the benefits of increased Net Promoter Scores (NPS®), Customer Satisfaction (CSAT) scores, the increased efficiency in an onshore environment, and the personal connection that’s able to be built with your customers - these are the ingredients that create amazing support experiences that drive customer advocacy.
Rather than only look at price per hour or price per transaction, take into account the 360° picture of customer satisfaction, customer support efficiency, and overall customer experience.
Onshoring: outsourcing a practice area to a firm within the US (if you’re based in the US).
CON - On a per-transaction basis, this is usually the most expensive option for customer support because of wage levels and cost of living. However, this also means…
PRO - Highest quality, simply put. Onshoring also can result in…
PRO - An instant customer connection; no lag; accent neutral; more efficient - won’t have to ask to repeat name, issue, zero language barrier. This is one of the foundational elements that…
PRO - Enables Customer Mirroring, which creates the foundation of excellent customer experiences. These customer experiences generate advocates, which then leads to…
PRO - Onshoring customer service pays for itself in the long run, as the customer experience is significantly better, overall. This enables the brand to more easily build customer loyalty, which increases order values, purchase frequency, and the likelihood that the customer will share the brand experience with friends and family.
Offshoring: outsourcing a practice area to a firm far from the US (e.g. Eastern Europe, APAC, etc).
PRO - The clear pros for offshoring are the efficiencies gained from the cost of labor, along with a high technical proficiency.
PRO - Transactionally, this is also the least expensive option per call, per hour, or per issue; however, this low cost invariably results in one thing…
CON - Lower quality, simply put. Not only that, but…
CON - There are invariably language and accent issues. Many companies do accent training in an effort to have their agents become more accent-neutral, but since it isn’t their natural way of speaking, accent issues still come up post-training, and continually when as reps are hired.The ultimate impact of this is a connection gap between the rep - and your brand - with your customer. This is especially true in industries like healthcare or retail, where customers are looking for a very personal connection, but still relevant in other industries, like wireless and telecommunication.
CON - Another way that language and culture creates a barrier is with your customers’ names. It is very common that an offshore representative won’t immediately know your customers’ names, causing them to ask your customers to repeat themselves or ask them to spell out their names.The combination of your customer repeating their name and spelling out their name - especially for relatively common names, in your customer’s eyes - builds an emotional wall between the customer and your brand, making it nearly impossible for your customer to build a connection with your brand during the exchange.
CON - With your customers, the offshore reps will be working overnight hours, which usually means less efficient work, attention to brand guidelines and customer details, and can impact overall productivity.
CON - Finally, offshore staff has notoriously high turnover, which can result in wild inefficiencies in onboarding, brand fidelity, and quality.
Nearshoring: outsourcing a practice area to a firm very close to the US (e.g. Latin America).
PRO - In structure, this is very similar to an offshoring model. The only advantage is that there isn’t much time difference, if any, meaning that reps’ working hours are similar to normal working hours. This, in turn, can mean that employee home & family life may be stronger, and motivation levels can be higher.
CON - The major negative with nearshoring is that it is nearly impossible to effectively do Customer Mirroring with your hiring and training practices. You will find reps that may be similar in some respects to your best customers, but not in all respects, and the cultural differences will make it very difficult for reps to build a connection with your customers.
CON - Another nuance with nearshoring is that holiday schedules will differ, as do cultural norms. This means, unfortunately, that some rapport building with your customers is inherently lost.
Have you had challenges or successes with any of these customer care models? Let us know on Twitter by mentioning us @vcaretec.
