Customer Service

To Outsource . . . or Not

Despite the growing trend towards outsourcing technical support and customer service, DSL Extreme has decided to keep as much customer contact as possible in-house.

by Jeff Goldman [June 2, 2004]

At some point in their development, most ISPs face the decision of whether or not to outsource their customer service and technical support. In many cases, the convenience and cost savings make the idea of outsourcing too attractive to ignore. Some ISPs, though, have determined that keeping things in-house helps them to ensure service quality—one such company is DSL Extreme.

Jim Murphy, DSL Extreme's president, says that his company's decision to avoid outsourcing is not a political statement—it's simply an effort to maintain control of the customer relationship. "We're getting a lot of customers that are coming from some of the higher-profile ISPs that have recently outsourced to India," he says. "They're just really frustrated with the level of support they're getting."

Murphy says that outsourcing to an overseas provider, in particular, seems like a huge gamble for an ISP to take. "Outsourcing of any customer support or customer contact, whether foreign or domestic, is a huge undertaking," Murphy says. "Taking your business overseas just adds a whole other layer of complexity to it."

Selective outsourcing
Still, even for DSL Extreme, it's not an absolute rule—the company does some outsourcing, specifically for sales overflow at night. Murphy says the decision to do so came down to choosing between having a call answered right away, albeit by another company, and forcing customers to wait until an in-house sales rep became available. "We decided it was better for the customer to talk to somebody right away," he says.

Still, outsourcing even that small amount of customer service contact was preceded by an extensive training process—and the relationship is constantly evolving. "We meet with them on a regular basis to go over various things, and we monitor calls that go in," Murphy says. "It's almost as if you're training some of your own staff."

As a result, he's happy, so far, with the decision to outsource that part of his business. "It works out great," Murphy says. "The customers are very happy. Our benchmark is to answer the phone within 20 seconds on our sales line, so to maintain that benchmark, it really helps out to have a partner that's able to work with you on that."

The point is that a straightforward sales call, particularly at night when the availability of in-house personnel may be limited, seemed like a relatively simple thing to outsource. If a customer needs more in-depth technical support, however, Murphy would prefer to see that provided by an in-house employee with more comprehensive training.

Customer satisfaction
In providing support, Murphy says, there are two kinds of customers to keep in mind. "John Q. Public is really shopping for price," he says. "He's feeling that these services are starting to get commoditized and the service is the same everywhere. But the educated consumer is realizing that you can't have your cake and eat it too: you can't always have the cutthroat bottom price and get the best service possible."

DSL Extreme briefly outsourced some of its nighttime technical support to a provider in Indiana, but decided after less than a year to bring the support back in-house. "It's a huge learning curve for any company, because you've got to basically train them to know your product as well as your people do, and you're not there to constantly supervise," Murphy says.

The company regularly monitors Internet chat boards to keep an eye on customer concerns, and Murphy says it's striking how sharp customers are. "It wasn't more than maybe four or five months after we had transitioned over there that people knew, 'Don't call into the nighttime support: you're not getting the same people,'" he says. "The word gets out and people talk."

Since then, Murphy says, he's never regretted the decision to invest in in-house support. "We just found that no matter how much training we dumped into it, the customers didn't feel like they were getting the same level of service," he says. "Bringing it back in-house was at a higher cost to us, but the customer satisfaction resulted in lower churn. We could see tangible, quantifiable results by doing that."

Quality vs. price
Particularly for a company like DSL Extreme, Murphy says, it makes good business sense to keep as much control of customer support as possible. "Our customers are coming to us because they're expecting a certain feel and a certain level of service," he says. "If we try to do something that alters that, then that can kill the goose."

Because DSL Extreme competes directly with larger providers that are more likely to outsource, Murphy says customers expect better service from his company. "Quality is what keeps them with us," he says. "So obviously we want to do what's best for us, but what's best for us in this instance is also what's best for the customer."

Still, Murphy acknowledges that each company has to assess all of the factors to make its own decision about outsourcing. "It's really an individual decision by each company to say, 'I'm willing to sacrifice this much in quality to save this much in price,'" he says. "But in this day and age, a lot of companies will sacrifice quality to make short-term gains in profitability."

No matter how good an outsourced provider's staff is, he says, they'll never care about your company as much as your in-house people. "They're right there, you're directly communicating with them, they understand the product, and they understand the company vision," Murphy says. "In the long run, I think that's going to be part of our success."

— End