Online Extra: An Offshore Connection for Small Biz

Call centers are beginning to pitch their services beyond the big leagues. But be aware of hidden costs and PR risks

By Karen E. Klein

Offshore call centers have emerged as an option even for small companies, with the potential for major cost savings. Problem is, they can also be a turnoff for customers. Controversy over sending American jobs overseas erupted during last year's Presidential campaign, leaving nearly all the companies that hire overseas call centers so touchy about the practice that most refuse to discuss it publicly.

Phil Hatch, of Portland (Ore.)-based Ventoro, which offers offshoring advice to businesses, conducted a survey about offshore outsourcing last year, and when the results were released, he says he got death threats. "I wasn't advocating offshoring, just reporting on how many companies were doing it," he points out. "Still, people were outraged."

Low labor costs (offshore companies claim they can offer service comparable to that offered by U.S.-based companies for one-half to one-third the cost) mean that offshoring isn't going away, particularly for tech outfits whose support calls are long, demanding, and expensive to staff.


  Offshore companies can also provide cost-effective support for customer calls in Spanish and other languages. For instance, when you hear a menu option that says, "Para Español, marque el número dos," it's not unlikely that the caller who pushes 2 may be helped by an agent based in Argentina. "There's a well-educated workforce, sophisticated communications capabilities, and very cheap labor there, due to the fact that the currency was recently devalued," says Gabriel Kaplan, who markets Argentina-based call center Conectec to U.S. businesses.

During the past couple of years, offshore companies have increasingly reached out to smaller U.S. businesses, says Sandeep Dutta, assistant vice-president of Nipuna Services, which operates large call centers in Bangalore and Hyderabad, India. His company counts some of America's largest health and financial-services outfits among its 19 corporate customers and has recently begun marketing to small and midsize U.S. businesses. Nipuna is implementing a per-call pricing structure to accommodate them, he says.

Dutta insists that Nipuna's agents are trained meticulously and monitored for effectiveness and politeness before they answer live customer calls. "We test them on listening skills, comprehension skills, and how to handle very demanding customers," he says.


  But even with the best-coached agents, most callers can tell immediately that they're talking to an offshore employee, says Brad Cleveland, president and CEO of the Incoming Calls Management Institute, an industry organization for call centers. "There's something rich and complex about the English language, and when it doesn't feel quite right, customers can really be dissatisfied. On the other hand, we have such a wonderful melting pot in the U.S. that other callers may be happy to find themselves talking to a native of their home country."

If you're exploring overseas operations, be aware of costs that may not be apparent at first glance, such as travel to visit the offshore provider. You should also think about possible political or financial instability when a company is based in a developing country.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues

Edited by Rod Kurtz

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