New Manager

The customer is king. Really?

S Sriram    | Updated on January 24, 2018


If service is core, why outsource it?

Business leaders and CEOs always held that customer is king. Peter Drucker, the ultimate guru of management, emphatically stated, ‘The purpose of a business is to create and keep a customer.’

Corporations world over spend billions in promoting/branding/marketing their product or service. They invest time and resources in understanding what the customer wants, what has been their experience of using the product or service that is on offer and how delighted they are in using it. Even with the best of the companies, the practice hardly inspires confidence.

  Recently, I received a new debit card from a well-known private bank where I have been banking for the last decade. In order to use it, I needed a new ATM PIN. I followed their instructions to get it at a local ATM, but no dice. So I called their call centre and was told to try the same process at a different ATM.

Again, futile. After more attempts and wasting precious time I was finally told by the call centre person to simply wait for a new set to be delivered to me in seven business days. After 10 days and several rounds of back and forth mails, I received a new password that worked. Believe me, this is a very successful private bank. And sad as it sounds, at the end of the day, instead of being upset at this delay, I was just happy to have actually received the PIN instead of a ‘Our courier found the door locked’ SMS from the bank.

In another instance, an airline that took my booking cancelled my Hyderabad-Chennai flight a mere four days before my departure date. Upon speaking with good old “John” at the call centre, who asked me questions from my grandmother’s maiden name to my pet dog’s birthdate, I was told that a refund will be posted to my account “within a few business days”.

After three more weeks and a dozen phone calls, the refund was finally posted. Again, much to my relief that at least the job was done.

Perhaps while businesses have taken to heart the first part of what Drucker stated, about, ‘Creating’ customers, somehow, somewhere, they lost track of the ‘Keeping’ part.

Keeping customers

The point I am trying to make is that if the customer is truly king, why is it that such a significant aspect of customer interface, as customer service and interaction, is being completely outsourced to call centres that are only semi-prepared to deal with the customer?    

Personally, I have nothing against outsourcing. But I have been taught that one should never outsource what is ‘critical and core’ to an organisation’s value creation. Doing that is like outsourcing interface time with the family. Would you? That’s what companies do, when they outsource customer interaction to call centres. Efficient? Yes. Effective? No.

Not core areas

I am for ruthless outsourcing of non-core even if the cost is more than doing it within. The logic being, it is not just the internal cost vs purchase price, but the opportunity of the top management time, which in my view is the scarcest commodity in any organisation.  

What the companies in the above examples have done is to outsource customer interface and interaction as a necessary nuisance to be dealt with. Companies agonise over their NPS (Net Promoter Score), but at the end of the day, they hand it off as someone else’s problem.

And ultimately, as it gets passed through the ranks, it becomes the customer’s problem. Mostly call centres are the easiest way to displease customers.

Call centres also represent a huge missed opportunity in gaining insights into customer wants and needs.

In a business world where ‘Content is King’, customer data is becoming more and more important. Outsourcing them? It’s like asking my EA to attend a parent-teachers day at my daughter’s school.

The writer is Founding Executive Director (Emeritus) Great Lakes institute of Management, and Founder Director, Cloudcherry, an online customer sentiment mapping tool

Published on March 17, 2015

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