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UK customers defect over offshore call centres
One in seven not happy claims report...

By Andy McCue

Published: Tuesday 11 May 2004

One in seven UK customers who used an offshore call centre in the last year protested by taking their business to rival firms, according to new research out today.

A survey of 1,000 UK adults in February found that 142 switched supplier because their existing one used an offshore call centre, while three-quarters said they felt more negatively towards their supplier if they used offshore agents.

The report by call centre industry analysts ContactBabel also found that customer defections were highest in the telecoms and insurance sectors and that Scottish people were most likely to switch supplier.

The spectre of a consumer backlash against perceived job losses to places such as India has so far been dismissed by the offshore industry as skewed and politically motivated by a vocal minority.

But the report warns that only a small percentage of customers switching supplier in protest at offshoring will offset any economic gain from moving operations overseas in the first place.

In a hypothetical scenario, the report calculates that a typical high street bank with 12 million customers and revenues of £225 per customer each year would save £9.26m by replacing 1,000 UK call centre workers with the same number in India.

The report claims it would only need 0.343 per cent of customers – still over 41,000 people - to defect in protest to cancel out those savings, and that last year 1.09 per cent of UK banking customers changed supplier as a direct result of customer service offshoring.

Steve Morrell, principal analyst at ContactBabel, said in the report: "If UK businesses do not address the concerns of their customers, the level of customer defection will increase and their profits will decline further. Offshore contact centres certainly have a future role to play in providing service to UK customers, but they are a piece of the jigsaw, not the whole puzzle."