The Ethics of Outsourcing Customer Service

Sending jobs overseas may be good for the bottom line in the short term, but frustrated customers will vote with their wallets

It's a familiar scenario: A product you purchased recently has developed a problem, so you call the company's toll-free number and are connected to a "customer service associate" in India or the Philippines. You describe your problem but have a hard time understanding what the company representative is saying. You try several more times to communicate why you are calling but cannot get information that you can comprehend. You ask to be transferred to someone in the U.S. and are then put on hold for what seems like an eternity. You hang up in frustration and vow never again to purchase anything from this company.

More and more businesses are outsourcing not just manufacturing jobs but services ones too. On the face of it, this seems like a smart financial move: By slashing labor costs 25%, 50%, or more, companies that have had slim profit margins are now able to enrich the bottom line and keep shareholders happy.

Outsourcing customer service, however, is not only unethical. It's bad for business.

Here's why.

Good Word of Mouth and How Not to Get It

The most valuable commodity a business has, and the most difficult one to come by, is positive word of mouth. There are lots of ways to engender this. You can build a superior product. You can create a memorable marketing campaign. You can get publicity by doing good works in the community. All of these will inevitably get people talking about your company, which is harder and harder to make happen in our increasingly crowded marketplace.

The problem with outsourcing customer service is that this practice creates nothing but negative word of mouth. Time is precious, and what customer wants to spend an inordinate amount of time in an often vain attempt to communicate with a company employee who is halfway around the world and cannot speak English effectively? It is easy to measure the savings a business gets by farming out customer-service jobs to countries whose median income is an eighth of what it is in the U.S. What too many businesses either fail to see or refuse to take seriously, however, is that companies that value short-term profit at the expense of meaningful customer service risk sacrificing long-term profits and the company's own reputation. Beware: It's harder to repair a poor image than it is to maintain a good one in the first place.

Smart businesses recognize that the surest way to hold onto their current customers and create new ones is to place customer satisfaction front and center, not only in their mission statements but in their day-to-day operations. This means that customer-service representatives must be able to communicate clearly. This also means that these employees should be fluent not only in the primary language of the customer base but in their culture, customs, and idiosyncrasies as well. The root of "customer" is "custom," and customs are largely a mystery to those who live and work outside of the culture.

A Racist Proposal?

I realize that a call for a ban on outsourcing customer service may seem racist. After all, the folks with these outsourced jobs are largely people of color whose first language is not English. Isn't this proposal thinly veiled discrimination against non-U.S. cultures?

Absolutely not. The reason it is wrong for U.S. businesses to give customer service jobs to non-native speakers of English who live overseas has nothing to do with race per se. My argument here isn't even against outsourcing as such. That is, even if one believes that businesses have an obligation to find the cheapest sources of labor possible overall, it does not follow that customer-service positions are best suited to contractors from other countries. The point is simple, straightforward, and incontrovertible: Performing the job of communicating with the public requires being able to communicate well.

As anyone can attest who has had a poor customer service experience with residents of Bangalore, Manila, and other cities where U.S. outsourcing is popular, company representatives there for the most part are not measuring up, so they ought not to have jobs where the art of communicating well in English is essential.

This conclusion should not be interpreted as a slight against the intelligence or integrity of non-U.S. citizens. It is simply to say that working on the front lines of customer service means, first and foremost, being able to understand what the customer needs and then meeting those needs efficiently. Outsourcing customer service subverts both of these crucial objectives. Showing a profound disrespect for customer satisfaction is why outsourcing customer service is unethical, and the damage that this practice does to a company's reputation and long-term financial prospects is why it is an unwise business move.

What Should Business Be About?

The goal of a business, unlike a charity, is to make a profit. Not only is there nothing wrong with this, it is hard to imagine what the world would be like without a profit motive. Where too many businesses falter, though, is leaping from the premise, "Money is good," to the conclusion, "We ought to do anything legal that will maximize profits." This leap of logic is ethically troublesome, since much wrongful behavior is legally permissible. Furthermore, the obsession with making the most money sooner rather than later blinds one to the very thing that promotes a flourishing business in the first place: Satisfied customers who keep coming back for more. Not only will a business not succeed if it puts greater emphasis on short-term gain than on customer satisfaction; it can't succeed.

Corporate officers should explain to shareholders that the smart business is one that values meeting the needs of customers above all else, including short-term financial gain. Only by having its priorities straight can a company count on long-term financial gain. The goals of making a profit and satisfying customers are not only not mutually exclusive; they are inextricably bound.

Here, then, is a challenge to your own company: Put a premium on serving the needs of customers by keeping customer-service jobs in this country. You'll make your clientele happy, generate positive word of mouth, enrich our own economy, and, in the long run, enjoy continued growth and success. Your customers (and shareholders) will thank you for it.

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