Offshoring is an integral part of volume mix strategy in any high volume customer service organization. However, does your organization have a long-term offshore-onshore strategy defined in line with your organizational and customer ecosystem balancing a healthy offshore-onshore mix? Do you have a logical segmentation that defines your volume mix? Are you able to articulate your strategy? If not, its time…it’s high time!!
It has happened way too many times with way too many organizations in the industry for it to just be a mere coincidence where;
- Organizations that did not believe in offshoring strategy realized a little too late in the game and missed out building their offshore centers and missed tapping in to the abundant talent pool in Philippines and India.
- On the other hand organizations that off-shored too much too fast (“Move it all” type) realized in 4-5 years the impact of no presence or very minimal presence on-shore on their brand, quality & market reputation which has a direct correlation with lost revenue and churn rate.
If you want to protect your organization from being one of the above then the answer is to have a balanced & strategic volume mix that supports your long-term strategy and accommodates your customer ecosystem and your ability to articulate it to your larger employee base, leadership and shareholders. Like all other strategies, if you cannot articulate it then you don’t have a strategy.
In my experience managing large customer service sites in US, Philippines & India and having defined volume mix strategies for large scale teams, I don’t think there is one right answer in terms of what is the right mix between offshore and onshore volumes. There are multiple models you can consider in defining your volume mix segmentation and to strike a strategic balance long-term inline with your organizational priorities, competition and your customer eco-system
Obviously, if cost is your ONLY priority then these options don’t apply to you.
Revenue based offshoring strategy: This model focuses on a volume mix strategy based on your customer revenue segments. The logic is to have higher revenue generating customer onshore and lower revenue offshore with the principle of higher the revenue-higher the investment, better the experience. This model enables you to segment your customers based on revenue and there by differentiate the investment for service. This model also helps you drive a healthy cost balance as your onshore investment is on xx% of the customers who generate xx% of your revenue.
This could also further be segmented in to B2C Vs B2B Strategy. B2C Offshore and B2B On-shore. If you are looking for revenue based differentiated customer experience and making it a competitive advantage then this could be your potential answer.
Channel based offshoring strategy: This is a straightforward approach of retaining phone support on shore and off shoring email, chat and other non-voice support channels. This enables you to take advantage of the in-market native speaking resources to interact with your customers live while utilizing offshore base for offline customer interactions and provides a clear segmentation between your onshore Vs offshore workforce. This according to me gets the bang for your buck, as this is a strength-based model utilizing all your on-shore resources for live support
Tiered offshoring strategy: This is based on the research around when and how accents impact customer perception. http://www.adelaide.edu.au/news/news77105.html. This model segments having off-shore base support frontline queries while utilizing on-shore for Level 2 support or escalations. This model enables you to have escalated situations and irate customers deal with your experienced on-shore resources to ease customer experience in out of control situations
Issue based offshoring strategy: This is a tactical segmentation than strategic and a very operational solution. Principle is to have high volume low variation segments offshore and low volume high variation segments onshore. This will enable you to balance your cost options with higher offshore headcount supporting basic troubleshooting and a smaller on-shore base supporting complex high variation segments.
My personal recommendation is a hybrid model combining Revenue and Channel strategy that according to me perfectly utilizes the strengths of your on-shore resources and balances your cost by utilizing your offshore resources in a meaningful way
An Example of Revenue & Channel Hybrid offshoring strategy
At the end of the day, it all comes down to how you want your customer service strategy to support your larger organizational vision and how you want to position your customer service offerings as a competitive advantage. Moving it all offshore based on a few internal metrics trend will be decision organizations will significantly regret long term and at the same time retaining it all on-shore may not be meaningful strategy for large-scale organizations with no quantifiable revenue impact.
Having a strategic offshore on-shore volume mix is the key and your ability to define it in a meaningful way for your organization based on a long-term view will play a key role in positioning your customer service as a competitive advantage in the market.
About the Author: For more information, contact Balakarthik Venkataramanan at firstname.lastname@example.org. LinkedIn Profile: https://www.linkedin.com/in/balakarthikv.