Paul Butler | Insights on outsourcing

Paul Butler

“The trouble with most accountants is, they know the cost of everything but the value of very little.” ~ Albert Einstein

My wife and I recently came across a particular online service that seemed intriguing and very good value for money. For a relatively low fee we ordered a week’s worth of prepared meals to be delivered to our door. Now, don’t get me wrong — we love cooking and enjoy good quality meals. We just thought this “click rather than cook” option would make a refreshing change to the pallet.

The box of goodies came when it said it would. The packaging did its job. The contents were all fresh and attractively presented. Most importantly, the taste was good. All in all we were satisfied enough to place a second order a few weeks later.

Sadly though, the second order never arrived and that’s when the fun started with the food company. Their back-end service was dreadful. So much resource must have gone into the marketing and the product itself, that the owners decided to strategically skimp on the after-sales support.

My wife took the lead on trying to get a replacement order but after a tedious and rather trying experience with the online chat functionality moved quickly to a request for full reimbursement. Two facts became very evident about the faceless customer service agent my wife was dealing with: Firstly, that the person had a very poor command of the English language and secondly, they were just copying and pasting a pre-prepared pat response to each question we asked.

End result: The second order was fully reimbursed and they lost a customer for life. Prior to the debacle that surrounded the second order we were on the verge of becoming raving fans. We most certainly would have ordered again and most likely would have spread the word with a few friends, encouraging them to also give it a try. But after the excruciatingly bad after-sales service they’d make no more sales from, or though us.

Outsourcing is becoming more common. Organizations are returning to their core purpose and are outsourcing that which stands outside of that central core. It makes sense in theory and on paper the numbers usually look good. As an ex-hotelier, we knew for example our guest was mostly interested in our location; free parking; good bed; hot shower; clean bedroom and a good breakfast. At no point did it occur to the guest which of the services in the value chain were provided by an employee of ours or a vendor of ours. We just had to make sure the product and the service were seamless and matched or exceeded expectations for the price paid.

Where I believe some companies are getting outsourcing wrong is when their motivation is to save money. They don’t see so much value in the after-sales support and so they save a few percent there. Their short sightedness blurred the long game and so in our case, they grabbed a few dollars from our purse once but we shan’t be back to play again.

From my business and consumer experience, the best way of looking at outsourcing is to consider the complete sales to support cycle and ask yourself whether the outsourced solution can provide even better service than the insourced option. My observation has been, when you provide a superb product and match that with exceptional service, the sales keep coming. If you instead see less value in the after-sales support and penny pinch at that point you’ll constantly be having to market to woo more customers to likely lose some of them the same way you lost us.

Optimally, outsourcing should be invisible to the customer, who shouldn’t be able to sense whether their agent is an employee or an employee of a contracted company. When done right, everybody wins.

As we checked out of the online portal and said goodbye for the last time to the customer service agent whose job title we considered an oxymoron, we weren’t surprised to receive another automated email asking us to evaluate the service we’d just received if indeed it wasn’t a 10 out of 10. We looked at each other and said, “Yeah, no” and clicked off the site and wandered down into the kitchen to prepare dinner.

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