Overseas service calls come home

Backlash over quality of centers

By Joe Light, Globe Correspondent  |  August 20, 2005

For many consumers, customer service call centers in India or the Philippines have been the public face of outsourcing and offshoring. When people contact their computer's manufacturer with a problem, the calls might be sent thousands of miles away to a customer service center in Bangalore.

But offshoring, sending service calls overseas, has sparked a backlash, many analysts say, and some companies have begun rerouting calls back to centers in the United States after receiving complaints about the quality of service.

''I haven't spoken to anyone who's been successful in our arena going overseas," said Al Gordon, executive vice president of customer service for Tweeter Home Entertainment Group. ''As much as these call centers try to cover the fact that they're in a different country, it becomes pretty apparent to the customer when you have an instance that requires a high degree of touch."

The result: Tweeter, based in Canton, shelved the idea of moving its customer service overseas and kept the facility in Canton.

Indeed, many companies with a significant Massachusetts presence have kept their operations in the United States and in-house, eschewing lower wages abroad for service that company officials hope will meet or beat customer expectations. Phone calls to the customer service numbers of 15 companies that are either based in the state or have a strong in-state presence revealed that Massachusetts customers with product problems are likely to reach representatives in the region, if not in Massachusetts itself. Nationally, customer resistance to foreign centers has slowed the trend in sending the work overseas.

Reports by Datamonitor, a business information company, predict that although the number of outsourced call center representatives serving offshore accounts grew 58 percent between 2003 and 2005, growth will slow between 2005 and 2007, to about 40 percent.

By 2007, the company predicts, about 3.7 percent of outsourced call center agents will serve offshore customers, up from 2 percent in 2003 but still far from a stampede overseas. Dell Inc. used to send all of its customer service calls to India. But in November 2003, after a number of high-value business customers complained about the quality of service that they received, the Round Rock, Texas, computer company moved calls coming from those customers back to the United States. Calls from low-value retail customers, on the other hand, were still handled in India.

Lehman Brothers, a financial services company, moved its internal help desk support back from India to the United States weeks later. ''Some companies went to India and then came back home with their tails between their legs," said Esteban Kolsky, a research director for Gartner Inc., a Stamford, Conn., technology consulting firm. ''They thought, 'Gee, maybe this is cheaper.' But it definitely wasn't the level of customer service they wanted."

Fidelity Investments, like many other companies, says that while it doesn't want overseas call centers, it doesn't want to rely solely on local call centers either. Company spokeswoman Anne Crowley said company officials decided to have multiple centers across the United States in part to protect the integrity of its customer service network in the event of problems. If a blizzard shut down one center in New Hampshire, other centers in locations such as Salt Lake City could field calls.

Many companies have decided to ensure that higher-revenue customers reach in-house call centers located in the United States, Kolsky said. ''When 20 percent of your customers provide 80 percent of your revenue, that 20 percent isn't going to get outsourced," he said. ''You want to keep your core customers close to you."

Average retail customers, on the other hand, are much more likely to be sent to third-party providers or overseas, he said.

BJ's Wholesale Club Inc. is one company that has chosen to outsource customer service to a third-party operator in New Albany, Ind. BJ spokeswoman Amy Russ said that the company went through an exhaustive search before settling on the third-party operator and that company officials believe it provides excellent service.

Comcast Cable Communications Inc. officials, on the other hand, have completely decentralized their customer service system. Six centers service the New England region, and four of those are located in Massachusetts.

Karen Hartzell, vice president of customer care for New England, said that AT&T Broadband, which was acquired by Comcast in 2003, outsourced half of its customer service calls outside New England, but that Comcast made it a priority to localize call centers in its first year and a half of operation.

''We cluster our call centers around communities, and we believe that's a huge competitive advantage," she said. ''Prior to being Comcast, I don't think customer service was the 'think-customer-first' type of philosophy."

Of the 15 companies contacted, Cingular Wireless was the only company to have outsourced customer service centers overseas, but even those centers would probably close in the future, said spokesman Martin A. Nee. Cingular inherited contracts with customer service centers in India and Canada after its acquisition of AT&T Wireless, but company executives have said that they are committed to bringing all customer service back into the United States, Nee said.

Now, Cingular customers calling from Massachusetts are most likely to be sent to a center in Little Rock, Ark., although they'll reach a team that only deals with calls from the New England region. Spanish speakers will get directed to a call center in Mexico.

''It's a very complex decision to determine where facilities are placed, but we think all customer-care facilities should be in the United States," Nee said.

Joe Light can be reached at jlight@globe.com.