Customer Experience

Outsourcing Alternative: Chatbots, the New Customer Hero

By Lindsay Sanchez, CMO & Head of Strategic Operations

Tech is a problem-solution industry. For the last decade, many tech jobs throughout the industry, and most notably call centers, have been outsourced to third-party firms – many in developing countries – to
fix the problem of expensive, round-the-clock customer service. But what happens when the solution actually creates its own trove of problems?

Done right, outsourcing customer service can breed loyalty and even attract new customers. Done wrong and it can significantly damage not only brand perception but the balance sheet. New research by NewVoiceMedia estimates $41 billion is lost yearly due to poor customer service. Millennials, in particular are responsive to these bad experiences because they’ve grown up in a world of choice, and that’s not a customer segment companies can afford to lose. In fact, outsourcing is considered one of the worst customer service mistakes a company can make.

Unfortunately, this trend also applies to internal services. Many large companies outsource their basic IT help desk with a similarly disappointing result. Yet in this case, the unintended negative outcomes are employee aggravation and productivity loss, problems that add fuel to the $550 billion workforce productivity challenge and swelling retention and rehiring costs (which are up to $280 billion nationwide)

The Death of Outsourcing

Why are customers and employees becoming increasingly frustrated with call centers and impersonal automation? It creates time-consuming, anger-inducing experiences during an already fragile moment. It’s transparent the brand has taken the easy, cheap way out. The farther a service arm of a company gets away from the source, the harder it is to maintain brand culture, personality, proper training and commitment to customers. In short, customers and employees feel shorted because they have been. The real kicker is that for up to one-half of the cases, customers and employees simply need basic support such as help with account information or a password reset.

When you lose account info or get locked out, it’s a sinking feeling. Long, tedious calls with unhelpful support only increase the frustration. Yet this nightmare is the reality of many existing outsourced customer experiences, leading consumers and employees aching for a better solution.

Chatbots Can Be The Outsourcing Alternative To Rescue Reputation and Revenue

We’ll call it botsourcing. Chatbots have been hailed as the saviors to just about every business use case you can find nowadays, but they are especially equipped to handle basic customer and IT service requests and deliver immediate ROI by retaining customers or eliminating costly calls. Acquiring a new customer can cost between 4 and 10 times more than retaining one, so chatbots present real value in this arena, not just intrinsic value. Industry and our own customer research show that in the IT services area, 20 to 50 percent of IT help calls are for password resets at a cost of $15 to $20 per call. It’s easy to see the immediate cost savings from chatbots. Not only can the quick, conversational UI of a chatbot extend to the communication channels brands utilize and people prefer (SMS, email, mobile, web, Facebook Messenger, etc.), but it doesn’t need to do magic to be effective. It just needs to help resolve simple issues quicker, and bridge the gap between automation and human service for an optimized experience.

Conversational identificationLet’s look at a real example. Instead of a customer fiddling around an FAQ site and calling a help number only to spend valuable time on hold, relaying their problem, getting transferred multiple times, and struggling with a service rep that has little training and little allegiance to the brand, they can engage a chatbot first. The bot can be branded in just about every way – from design to personality and tone. Since the bot is linked to a company’s back-end systems and accessed via multiple communication channels, the customer is immediately recognized, addressed, and engaged. When it’s time for a human agent to step in and solve the problem (not just diagnose it), they’re ready to act and armed with the contextual data and conversation history the bot inherently stores. The bot doesn’t replace call centers altogether, but it prevents them from being the only customer or IT service solution. Instead, companies can integrate chatbots as a complementary outsourcing alternative.

Chatbots Give You Consistency Call Centers Can’t


Speed and convenience of experience are important, and chatbots certainly help solve for that, but consistency and delivery of experience matters too. It can take up to 12 positive experiences to make up for a bad one, so continuing to roll the dice with call centers as the first line of defense is risky. Chatbots meet people’s expectation for easy, self-service support that can happen anywhere, while allowing companies to better control the quality and consistency of their service and support process. Unlike re-training an entire team of reps thousands of miles and multiple time zones away, one person can change a bot in a matter of hours. Give it additional tasks to solve. Retrain it to respond in a different tone. Make it transfer the customer or employee directly to a higher-level agent faster. It’s the brand’s decision. Companies can define and quickly adjust the experience versus letting a distant call center or one individual dictate customer and employee outcomes.

Call centers arose as a way for companies to stay competitive and solve a problem – but changing customers and times means this original outsourcing solution needs a facelift, a digital alternative. Customers and employees have been sent offshore for the info they need for too long. It’s time to bring them back to a digital destination that still feels like home.

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