Outsourced Customer Service Call Centers, a Cross Cultural Disaster!
Richard W. Chaptini
Abstract:
Outsourced call centers are creating serious customer service flaws due to cross cultural deficiencies. This problem must be identified by corporate clients and the operators must receive extensive cultural training. The root of the problem is a lack of mutual cultural understanding and the victims are both phone operators and customers.
Introduction
The rapid development and growth of telecommunications technology in the early 1990s revolutionized the delivery of customer service over the phone. Because of the advancements in technology, it became both possible and cost effective to outsource phone customer service in countries outside the U.S. or in multiple locations regardless of geographical boundaries. Consequently, call centers have been outsourced to other countries where the costs, particularly labor, are lower than in the United States in order to boost company’s net profit. From a recent article in Newsweek International Edition:
“Five years ago there were 10 call centers in the Philippines; today there are 108 employing 200,000 Filipinos, mostly in their mid-20s. Last year the industry generated $2.3 billion in revenues—up about $1billion over 2004—and analysts expect an additional $1 billion jump in sales this year.”
Let us not be naïve and think that when we call one of those 1-800 numbers, there sits Mr. Smith comfortably sitting behind his desk waiting to deliver superior customer service. Mr. Smith’s job in many cases has been outsourced through the revolution in telecommunications. Instead of Mr. Smith, American customers now interact daily with low per-capita income countries that offer an English speaking population and tax advantages to corporations who open call centers within their territories. Countries simultaneously cut their unemployment figures and took advantage of a growing global economy based on supporting consumption in the United States. Corporations believed that in this global economy, improving shareholder value by focusing on cutting the operational costs of service delivery was the right course. Their critical mistake however was not addressing cross cultural differences between their American customers and their service representatives, thus causing a cross cultural catastrophe.
Customers want high quality of customer service, and in most cases call service centers both at home and abroad are just not performing up to expectations. Phone agents are usually low income, ambitious young people who are looking for a better job in an environment where monthly salaries are measured in the tens of dollars or lower hundreds of dollars. Paradoxically, call center agents strive to absorb the frustration of making other people happy even when they themselves feel extremely frustrated about their jobs and quite often are treated very poorly.
How many times have we called a 1-800 number to talk to an agent in order to purchase a hotel room or complain about a mistake on an account? What we expect is to talk to a person on the other end of the phone that cares about our problem and has the ability to help. These days, however, the person that answers our call may be, literally, at the other end of the world and making changes that affect your life through the way he or she handles your phone call.
The Call Center Service Team
To fully understand why we as customers are filtered by computers in the telephone waiting line, forced to repeat information and be transferred several times, it is important to know how the call center business works. In a typical call center with a few hundred employees, there is a manager with two or three assistant managers who are supervising the entire operation. Under the top management layer are team leaders supervising groups of 8 to 12 phone operators each, making sure that people are answering the phone and talking adequately to customers. This is why we are sometimes advised that our call may be monitored for quality assurance. Call centers also utilize call distribution managers who assign calls received to ensure the call center’s client contract is met, or if the call center is operated by the client company, to ensure the company’s goal is met. These phone call distributors are usually evaluated by the average time that the customer has to wait on the phone before an operator answers in addition to some other numerical indexes. Different companies have different policies for waiting times and this is when we feel the difference between two different phone calls.
The customer service staff handles customer service issues and more complex cases that require special attention. Of course, there will be an HR team in charge of constantly hiring phone operators as the turn over is very high in this industry.
Finally there is a team of IT people in charge of supervising a complex network of computers and software systems that run this entire operation. One can call the same number and have an operator answer in Manila, The Philippines or in Tampa, Florida or in a house somewhere in Canada. Calls are routed depending on availability of operators and to demonstrate the complexity of this network, more than one call center can handle the exact same phone number that customers use. Moreover, one phone operator may be speaking on behalf of a different corporation each time a call is routed through.
Little attention is given to the end user of the call center, the customer. Cultural training is nonexistent and a lack of seeing the problem from a cultural angle only magnifies the problem. For example, the Filipino President Arroyo touched on this issue, hoping to export her country’s own culture to the United States through the call center business and grow the Filipino share of the call center business. However instead of having her own fellow citizens worry about understanding American culture in order to better serve the American customer, she focused on ‘Filipino hospitality’:
In a recent speech while inaugurating a Dell call center in Manila, President Gloria Macapagal Arroyo ..."We have proven that fiber optics not only transmit data or voice, but also Filipino hospitality," Arroyo said, harping on the country's oft-quoted advantage over India, its technologically advanced rival. "Because it's not yet possible to download a handshake or e-mail a hug, the next best substitute is a Filipino call-center.”
In this sad and horrifying situation where people on both ends of the line are interacting with each other, unknowingly insulting one another and forced to face a situation that they can not handle, end users and phone agents are paying the highest price.
Today’s Industry
The Mr. Smith of yesterday has been replaced by extremely sophisticated software systems and a complex managerial structure set up within a large call center, which very often can consist of over 1,000 phone operators ready to answer any call. Mr. Smith has been replaced by “Thank you for calling Company such and such...” with a tone that is pleasant enough but empty of any sort of emotional feelings or any form of human warmth. Needless to say, we almost never get the same person on the phone again who can remember us or our issue except from a note or two in our file.
Many corporations in the Fortune 1000 are outsourcing call center services to India. The first rule that a phone operator has to learn is to be as precise as a Swiss watch. Phone operators are not allowed to be more than two minutes late every time they report to work or return from a break or lunch. If one or two operators are late, a manager may get in trouble for not ensuring the proper implementation of a contract. Of course, at this level it is all about numbers and not about quality of service. Team leaders make sure that operators manage the call all the way from reciting the proper greetings to closing the call. The question is: Can team leaders make sure that the phone is handled in the same warmth that Mr. Smith used to when he was servicing his local customers? Given the large turnover in the call center industry and widespread distribution of operators, maintaining quality call center customer service is nearly impossible. Because of the constraints with call center service technology, human beings have been relegated to operating in automated systems where operators are trained to behave and act like robots.
Figure .1: Locations of Outsourced Call Centers in India
The Operators
Wasfi, a young man from the Middle East, was hired to work in a call center in Lebanon. During his interview, the interviewer evaluated his American accent to judge whether or not he can blend in as an American. As a result, Wasfi was hired based on his accent qualification more than any other skill. When customers call from the U.S. and ask the operators where they are located at, their response is: “We are in the U.S.”
Very often, customers are forced to face situations where they are supposed to be cross cultural experts without even knowing they are communicating cross cultures. How many times do we call a 1-800 number and a person with a heavy accent answers and when asked, replies that he or she is based in Canada or the US? It is common knowledge that there are call centers that serve American customers based in India, the Philippines, Nepal, Europe, Australia, Lebanon and more…but it is not common practice to divulge the location of the call center.
Very often, operators in third world countries are not interviewed on their cultural skills and this is where many companies get trapped. In the modern way of conducting business globally, there should be a differentiation between language and culture. Hiring people based on their language skills to deal with a specific culture can be an enormous mistake. Simply put, although there are over a billion people who speak English, only 300 million of those are Americans. How many of those billion can speak English in a culturally adequate manner and understand a simple expression like: “the whole nine yards?” Were the reverse situation to occur, Midwestern Americans who know nothing about The Philippines or India would take calls from Filipinos and Indians that are trying to solve complex billing issues and issuing complaints about their experiences.
The ability of Indians to speak English as well as cost savings has often been used as a sales pitch for Indian call centers, while ignoring the importance of understanding cultures. As one Indian company remarks about its call center services to potential foreign corporate clients: “includes outbound and inbound call center services which helps you better utilize your time, money and resources, and boost your bottom-line.”
The situation is not any better in the Philippines, one of the largest outsourcing call center service providers, with call center revenues of USD 2.3 Billion in 2005 and 200,000 employees in their 20’s. As a Newsweek International Edition article states about the Filipino call center business:
“The goal is to help the locals not only understand common American expressions and idioms, but also to speak with an American twang. "Just imagine the problem we get when an American says to one of our call-center employees, 'Get outta here'…and the call-center employee responds, 'Sir, you want me to put down the phone already?' For a country desperately in need of an economic-success story, such gaffes are no laughing matter.”
American call center employees face a difficult enough time on the job without facing cross cultural hurdles: One call center employee based in Florida stated that she had 30 seconds to turn a person on the phone from an enemy complaining about an extra charge on his credit card to an ally who is docile and willing to share the pie to find a win-win situation for both himself and the company. This is not a standard approach to the call center business, however. Call centers are primarily evaluated on two things: (1) Quantitative statistics usually based on the average call time for the phone operator and the average waiting time for customers, and (2) Qualitative assessments based on a standard operating procedure followed regardless of who the caller is.
Unfortunately customer service over the phone faces an inherent disadvantage: Research has shown that less than 50% of human communication is verbal and the rest is non-verbal. Nice words are only nice if they are from the heart and filled with intention. Here is where call center management is unable to compensate for the smiles that are missing over the phone and where many of us feel disappointed and frustrated after hanging up the telephone. This problem is solvable but needs the recognition that there is a problem by corporate clients as well as an investment in human training. Considering the investments that are made to keep up to date with the IT equipment, human beings are being treated with less importance than the machines they use.
A Globalizing Economy, or just more American Jobs Sent Overseas?
For many American consumers, calling a 1-800 number can be one of the most upsetting experiences in their day. How can an operator that may be earning less than $50 a month serve a person whose standard of living may be 100 times higher? How can a person answer a question about a zip code when he or she lives in a country without a reliable or even functioning postal system? How can a person in the Philippines who has never experienced an American city address the concerns of a 5-star hotel customer who is booking a room in Manhattan or in Union Square in San Francisco? Nowadays operators that come from closed cultures and relatively low average levels of education must be cross cultural experts to deal with Americans.
The disparity across cultures can be large. In many countries that produce phone operators to serve the United States, much of the average population strive just to feed their children and maybe send them to receive a basic education. They come from formerly socialist countries with nonexistent notions of customer service, countries where electric power is off and on throughout the day, countries where human rights are sometimes in question. Operators may go to work on a bicycle and electricity at home is not always available. The operator himself may be from a caste society that cannot accept others below his social and educational ranking, serving an American from an egalitarian society. A phone operator for whom the internet is a luxury may be booking a $250/night room for an American customer who states that it is just for a few days of fun. The gap in mutual understanding is huge when the customer and the client service representative meet over the phone to solve a problem. Unfortunately, major American corporations have failed to consider the cross cultural issues that have been created and as a result the money they save in the near term by outsourcing will be lost in rising customer dissatisfaction over the long run.
It is obvious that it costs less to operate a call center in India or any other third world country. Labor laws are more flexible in such countries and many large consulting firms have shown that the cost of labor in such countries can be 10% of the cost in the U.S. According to one article, this difference in cost pushed large corporations and mega call centers to outsource to the east:
“Cost-effective manpower: In a call interaction center operation, manpower typically accounts for 55 to 60 percent of the total cost. In India, the manpower cost is approximately one-tenth of what it is overseas. Per agent cost in USA is approximately $40,000 while in India it is only $5,000.”
The result is obvious, both lower costs and lower levels of customer service for American customers, and the main reason is the cultural gap that exists between the outsourced operators, their American customers, and corporations that have failed to recognize and address this problem.
The benefits to foreign governments promoting the call center business in their countries are obvious as they look to improve their local economy in a global market that is based on competition among large corporations. In the Philippines, the government has taken an active role in supporting the integration of the call center business into the Philippine economy.
“Manila has granted the outsourcing companies various concessions, ranging from tax breaks to zoning changes that allow fast-food restaurants, for instance, to operate in office buildings to serve call-center employees.”
The Indian government has taken measures as well:
“100% foreign ownership permitted in IT Enabled Services industry unlike other sectors where foreign ownership is restricted. Software Technology Parks (STPs) established to provide ready to plug IT infrastructure and telecom facilities. Single window clearance for all regulatory compliance issues.”
An American call center employee named Leslie was asked to assist in editing the Middle Eastern Culture page on our website commented after working on the document that it helped her improve her performance at work by giving her the insights of the people from the Middle East:
"Since I do customer service adjusting primarily by telephone, I found while editing the website that the way I responded to Middle East clients changed, and the result was that both the client and I communicated more effectively and the outcome became significantly more satisfying.”
Conclusion
The lack of addressing this cross cultural disaster is growing the gap between corporations and their customers. There are literally armies of people who must be trained to operate like robots because they do not understand Americans.
The solutions to this growing gap between customer service agents and customers can be found and treated in a professional manner following the principles of problem solving. The majority of the problem has already been identified in this article. EITS, Inc. identified the root of the problem using our opacity index and by analyzing the frames of reference where the agent and the customer are as per figure 1.1. One can visualize the decreasing effectiveness of communication as compared among Americans, from an American to a non-American, and then back from a non-American to an American:
Figure .1: Opacity Index, the amount of communication understood by the receiver after filtered through cultural misunderstandings. In this figure, 50% of communication is lost over the phone, while even less is understood by the operator and customer when the two are from different cultures.
The customer is unwilling to be educated and there is no reason to expect adjustments. It is incumbent upon corporate America to ensure that phone operators are taught to deliver their product in a fluid manner based on the frame of reference of the customer and not based on where they come from. Corporations are the ones who initiate such huge adjustments and align their call center agents around the world with their customers who want better quality customer service. Forward-thinking corporations in today’s global economy will understand that cultural training is an investment rather than an expense and over the long term this training will generate customer loyalty through improved customer service. The opacity index of the agent can be improved through continuous language training on top of the cultural training that should aim to synchronize the individual frames of references of both the customer and the agent.
This is a general outline of a solution, however implementation will be a very complex undertaking. Professional companies in human communication such as EITS, Inc. who are available to constantly train new agents are required to treat this kind of problem. Unfortunately, it is easier to find a person that can design software or deal with an IT problem than locate competent cross cultural trainers because the technical problem requires algorithms and programming knowledge or other measurable solutions, whereas adjusting problems that deal with the human brain and culture can be very complex due to the variances of each person’s life experiences and individual outlook on life.
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Duttagupta, Ishani. "Teaching English is a Rs 300 cr biz." The Economic Times 21 May 2006. 13 July 2006 <http://www.offshorexperts.com/index.cfm/fa/home.outsourcing_news/news/36817>.
E-mail interview. 4 July 2006.
"Why India." Go 4 Customer. 13 July 2006 <http://www.go4customer.com/whyindia.htm>.
Vitung, Maritus. "Lost in Translation." Newsweek International Edition 29 May 2006. 20 July 2006 <http://www.offshorexperts.com/index.cfm/fa/home.outsourcing_news/news/36796>.
"Why India." Go 4 Customer. 13 July 2006 <http://www.go4customer.com/whyindia.htm>.
Vitug, Marites. "Lost in Translation." Newsweek International Edition 29 May 2006. 13 July 2006
<http://www.offshorexperts.com/index.cfm/fa/home.outsourcing_news/news/
36796
"Why India." Go 4 Customer. 13 July 2006 <http://www.go4customer.com/whyindia.htm>. Regulatory Enablers
F., Leslie. "Call Center." E-mail to Richard Chaptini. 22 May 2006.
About the author:
Richard W. Chaptini is President of EITS, Inc. and lectures on cross cultural topics around the country.
July 21, 2006
Copyright © 2006 by EITS, Inc.
