Outsourcing and Call Center Blog

20 July, 2007

Yikes! Customers don’t care about price or features

I ran across a couple of notes today on how people make purchasing decisions, both suggesting that we are pretty irrational – which could be a blessing or a curse for us marketers depending on how you look at it. Joe Cooper writes about how people decide on emotion and justify with logic in their buying process. In other words, the quantifiable features of a product or service don’t count as much as the feeling we have about purchase we are making (you didn’t really think that Nike shoes were somehow better than the store-brands did you?). The implications of this are pretty profound, for example it means the features and benefits statements that fill our endless supply of incredibly boring PowerPoint presentations contribute only in a backhanded way to selling our product (Hooray, can we outlaw PowerPoint now?).

The second item was in Seth Godin’s blog and quoted this amazing fact from an article on eBay buying patterns:

In some categories, more than 40% of the auctions went for more than the Buy it Now price.

This says a lot about the psychology of auctions I suppose (Mark Tillison writes a succinct analysis of this phenomenon in his blog).

If I put these two items together, is says that buyers don’t tend to care (at least as much as we think) about either price or features. Wow.

This opens one to a fascinating area of thought regarding what purchasers do care about. I won’t fully explore here other than to posit what this means to outsourced call centres. What I see in our industry is a lot of us trying to sell our product based on one thing, price. This I contend is a dead end street for any call centre business that has genuine aspirations to become the next Wipro or Infosys. Why? First, because I think the era of cost arbitrage is ending, the world is just as flat for us here in India as it is in the West. And second, because a price-dominated strategy will consistently attract customers who focus solely on price to the exclusion of customer experience and business process. You can afford to have some customers who don’t care about their customers and who are loyal to you only as long as you are the cheapest provider they can find, but if that is your niche, you’re going to have a hell of a time maintaining your base.

So if we don’t sell on price and features, what do we sell on? I think to find the answer to this, one must put himself in the shoes of his customers. If you were going to trust your sales, your customer service, your future revenue stream and/or your current revenue stream to an outside organisation, what would you be looking for? What springs to my mind are things like trust, confidence, consistency, fit, culture, synergy, harmony, all very squishy, intangible right-brained criteria. I believe that if both we and our customers are looking for these things in our business relationships, we’ll have many more successful, more profitable programs.

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3 Comments »

  1. Steve

    Thanks for reading my blog, I see you found it interesting. It’s a strange phenomenon, off-shoring call-centres: most people in the UK confess entirely to detesting the idea without considering the reasons why. Clearly, it’s a cheaper option, but that doesn’t always mean that the customer feels that they get a better deal, they feel like they are paying the same price and getting worse service.

    I know that the price comparison doesn’t stack up, most major corporations are off-shoring one service or another, but like I said what is felt and what is reality aren’t necessarily the same thing. Value is a perception, after all, not a fact – otherwise, why on earth would someone pay millions for one painting?

    I agree with your observations about competing on price. I too agree that there’s an imminent revolution in consumer behaviour. It’s taken a while but consumers are finally realising that companies just can’t deliver champagne service for beer money: read my post back in 2006 on The Individual Revolution.

    Comment by Mark Tillison — 23 July, 2007 @ 3:48 | Reply

  2. Steve:

    As a CRS ( Customer Relationship Specialist ) it has been my experience that people have little or no interest “who” provides their customer care or “where” that person is located as long as the “providing” CRS is clear, concise and an effective communicator.

    I feel your comment that (” What springs to my mind are things like trust, confidence, consistency, fit, culture, synergy, harmony, all very squishy, intangible right-brained criteria. I believe that if both we and our customers are looking for these things in our business relationships, we’ll have many more successful, more profitable programs.”), is spot on.

    However, all of these attributes can be present but if the customer cannot “feel good and well serviced ” through the CRS’s wording then the agent might just as well not be there at all. This type of service generates poor customer experiences and the resulting lost business cost escalations with them.

    Outsourcing businesses would do well to realize that North Americans are for the most part accepting of various language accents nowadays. I feel that bridge was crossed a long time ago due to modern tele-communications. Whether customer service is delivered at cut rate labor costs or from foreign nations is, in my opinion, for the most part irrelevant to N.A. consumers. At least those thousands I have had the pleasure of interacting with.

    Consumers must be able to understand what they are being told and must enjoy the experience. Until now Asian providers have not mastered that obstacle enough and I would suggest to you that this is the underlying cause of undeveloped business growth opportunities in England and North America for those outsourcers.

    I must also differ with Mark’s position in so far consumers “are finally realizing that companies just can’t deliver champagne service for beer money”. I believe they realized that long ago. Outsourcing companies on the other hand….have not.

    Comment by Mike — 4 August, 2007 @ 2:56 | Reply

  3. Thanks for your comments Mike and Mark, I’m a little slow to respond in kind as I have been travelling quite a bit lately. You’ve both raised some good points that I would like to weigh in on so here goes.

    “…but if the customer cannot “feel good and well serviced ” through the CRS’s wording then the agent might just as well not be there at all”. I think this is a good point and one that frankly we struggle with here in Asia. We can hire, train and measure technically competent agents, agents who are good problem solvers and agents who are good communicators but how do we develop and measure empathy? Generalising a bit here but I think culturally, westerners want someone who “feels our pain” when we call with a problem. This empathy is a challenge to convey on the first call of the day much less the 50th and I think it’s something that we have to figure out here in India.

    “…Consumers must be able to understand what they are being told and must enjoy the experience. Until now Asian providers have not mastered that obstacle”. My own opinion here is that there have been some bad hiring decisions on the part of some of the Indian providers who have not got the whole accent and communications skills thing sorted. I haven’t spoken to every agent we have on our international projects but all the ones I have speak excellent English and it is a key hiring criteria (our UK Directory Enquiry reps actually speak with a slight Scottish accent). I think this is a very soluble problem that a good call centre should not experience.

    “consumers are finally realising that companies just can’t deliver champagne service for beer money” I’m not sure I’m completely convinced of this. At the point of sale, how many people buying a wireless router or a washing machine or DSL service are concerned with the quality of the technical support they will get compared with the other factors like price, brand and features? At least here in the tech space, I think like good capitalists we’ve raced to the bottom and got there, people have come to expect rubbish tech support. That’s too bad. Perhaps to support your point there is scope for manufacturers and retailers to fill that gap, I don’t know.

    Comment by shamrin — 9 August, 2007 @ 18:23 | Reply


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