23 June, 2022




Buy-side companies should be wary of BPOs who promise salvation during market uncertainty

By Scott Newman, CEO, Transparent BPO

Signs of a pending recession are swirling everywhere – from the gas pumps to stock tickers. Even whispers of a recession can cause anxiety among business leaders.

Economists won’t be able to confirm whether we’re experiencing a bona fide recession until data from a quarter or two is crunched, but those on the front lines of commerce will be the first to see slowing sales, less demand and thinner bottom lines. But a recession or even an ‘economic slowdown’ is no time for business managers to panic.

During the 2008 crash, businesses sought multiple options to stay afloat, and many of those options solely focused on cutting costs. They went to the cloud, they automated and many moved operations to offshore and nearshore markets. Some options clearly worked but many failed. Desperate to stop the bleeding and to keep investors happy, business leaders put their faith – and the future of their businesses – in the hands of sometimes questionable stewards. They convinced themselves that sometimes unproven commodities could change their path. They chose to believe that their salvation lay in the hands of vendors who told them what they wanted to hear.

Some got it wrong. They hadn’t prepared and learned the warning signs preceding a slowdown and built flexibility into their businesses. They bought into the latest trend without doing their homework – and many lost control of their business operations because they didn’t build the right relationships with the right BPO partners.

Avoid Common Mistakes

With a possible recession once again lurking, it may be an easy decision to outsource your contact center and done right, there are benefits, but there are also pitfalls. Here are common missteps and how to avoid them.

Benefit: Employee Backfill

Assumption: Following recession-related layoffs, outsourcing can buffer or relieve the workload for remaining management and employees.

Reality: Poor implementation and mismanagement of an outsourced BPO relationship can overload management and add undue stress to staff, impacting morale due to work overload.

Benefit: Contact Center Expertise

Assumption: Managing a contact center is not your core business so it makes sense to outsource it to a company that specialize in this service, gaining their expertise and wisdom to serve your customers.

Reality: Have you sat down and met with the team who is supporting your customers? A site visit to talk to and work side-by-side with local leadership is critical to have a clear line of sight to the practices and policies used to serve your customers.

Benefit: Security Compliance

Assumption: You don’t have to worry about it. You are not responsible for protecting your customer’s information because the BPO vendor has it covered

Reality: Do they? Check their certifications and audits but most importantly, how do they train their people/ Do they conduct regular training to stop phishing and ensure data security? Bad actors – either state-sponsored or criminal – don’t take a day off, and you should never let your guard down.

Benefit: Lower Labor Costs

Assumption: Outsourcing cuts your inhouse staff costs and reduce the footprint of your domestic contact center by transferring your customer care to a BPO who operates from a cost-competitive nearshore or offshore market.

Reality: You may save money – in the short term. However, if your only decision point is cost then it’s going to translate to the service your customers receive. Your customers selected you because of the value they receive, but once they perceive they are getting low value or a poor customer experience, they’ll find another brand that serves them the way they expect to be treated.

Research 101

The easiest way to avoid panic is to face the economic reality that your company will face lean times at some point. And if retaining a contact center vendor is a viable option, you should: 

Research: It has never been easier to conduct research. Scan your competition online to see if you can determine what they’re doing, read reviews of BPOs, and ping your business contacts for referrals. There are trade associations like IAOP and ICMI that can help point you in the right direction and who have invaluable resources.

Talk to several BPO companies: Once you’ve narrowed down your list, conduct face-to-face interviews. And conduct a site visit so you can see their facilities and talk to their local management. This team will make or break your BPO partnership.

Talk to their references: And not only the case studies they have on their website. Technical capabilities, proven practices & protocols and unrelenting client focus transfer well to new clients. Find out if their pain points are similar to your pain points.

Set clear expectations: Get the BPO’s input about your expectations – such as timelines – so they have skin in the game. Don’t forget, they are the experts, and they have insight your in-house team may not have had access to in the past.

Making these changes is challenging and it’s tempting to chase the dollar signs. But chasing value will yield better results with a BPO provider as you come out the other side of a recession.