Sometimes your Customer Experience requires you to outsource a portion of it to a third party. Maybe it’s an installer or a tow truck service, or even an entire call center, but whatever or whoever it is, this part of the experience is not under your control. Today, we will examine whether this is a good idea or not.
We discussed this topic of outsourcing on a recent podcast, where my co-host shared a story about his friend who ordered a trampoline. However, the trampoline required assembly. Since assembling things was not in her or her husband’s skill set, they hired the trampoline vendor’s installation option. Unfortunately, after the trampoline arrived, the installation did not go smoothly, and my cohost’s friends spent the next few weeks managing a series of problems with it. When they called the vendor about the issues, the trampoline vendor was not as responsive as they had hoped since the installation was the third-party company’s responsibility.
This trampoline story is a classic example of what can go wrong when you outsource part of your Customer Experience. Specifically, it shows that the third-party controlled part of the experience is your experience from the customers’ perspective. Unfortunately, customers do not differentiate between the two parts.
Even my beloved Apple has been a victim of this lack of distinction. I ordered an iPhone 12 that should have arrived the next day. When it didn’t, I called Apple to figure out where it was. Apple asked me if I called FedEx, which was supposed to deliver it. I said, “no, I bought the phone from you.” In my mind, the delivery was Apple’s to manage, not mine. If I had chosen FedEx to deliver the phone, that would have been a different kettle of fish.
Managing the Customer’s Expectations about Outsourced Experience is Critical
How organizations frame their offers influences whether customers perceive the third-party experience as part of the organization’s experience. For example, the trampoline retailer could say they don’t do installations but then present five installer options. Then, the customer could choose one and hire directly, which might distinguish the installation experience from the trampoline acquisition experience. However, since the trampoline retailer chose the installers for customers, customers didn’t make that distinction. Sure, the trampoline company did try to add value by making it easier for the customer to get the trampoline installed, which is a positive thing for experiences. However, the trampoline company did not take responsibility when things went wrong. It would have been better for the trampoline company to have plans to manage problems in the third-party installation experience.
A winning strategy for outsourcing, in general, is to own the third-party-provided experience. It is best to ensure the experience the third-party provides is as good as what you would provide. For example, if you outsource the call center, the experience there should be as good as your company-owned call center. This suggestion does not mean that an outsourced call center isn’t as good as a company-owned one. There are plenty of terrible company-owned call centers, just as there are fantastic, outsourced call centers. What it means is the outsourcing organization should not give part of the experience to the third party and then wash their hands of any responsibility for it.
The same concept applies if an organization takes on an experience that they would have otherwise outsourced. For example, I stayed at a hotel that offered a shuttle service from the airport. However, when I arrived, the shuttle took an hour to pick me up. When I complained, the hotel had the attitude that the shuttle was more like them doing me a favor. My attitude was that the shuttle was part of their experience, and therefore, the hotel should own it and manage it the same way they did my stay at their facility.
What’s the Motivation Behind Outsourcing?
One of the problems with outsourcing’s effect on Customer Experience is the motivations for doing it. Most organizations that outsource a call center do so to save costs, not improve their Customer Experience. Therefore, how they measure success tends to be transactional, aka, how much the call center expense was reduced, not experiential, aka, how it makes a customer feel. While measuring this way doesn’t mean the organization doesn’t care about how the customers feel, it does mean that customer emotions aren’t the priority at this part of the experience.
However, that doesn’t mean that the organization can’t ensure the third-party partner delivers the proper Customer Experience. By communicating what that desired experience is, the third-party partner can adapt operations to accommodate these needs. We recommend getting these details built into the outsourcing contract. Moreover, the organization can ensure the outsourced partner holds up their end of the bargain through secret shopping and other oversight activities. Sure, controlling the experience through a partner is challenging, especially when you need to measure results, but it remains crucial to an organization’s success.
When I was writing my first book, Building Great Customer Experiences,
back in 2002, I interviewed a source from BMW who said something I never forgot: “We don’t have any ‘Only-ers’ in our organization.” He meant that no employee did only one thing, like be an engineer or a sales associate. BMW employees are part of the whole experience.
Another organization that gets this concept is Disney. Even in the adjacent shopping area of Downtown Disney, the shops owned by other brands still feel like the Disney retail environment. It’s like Disney trained them all and is paying them but through a different company. Disney probably understands customer experience better than just about any other company, so it isn’t surprising Disney would treat third-party contractors as an integrated part of the experience. They understand that, from the customer standpoint, it is part of the Disney experience.
The ‘Only-er’ attitude sometimes manifests in large companies that create divisions within the organization that handle specific experience parts. What can happen is a customer explains something to one representative, who learns from the story that the customer’s issue is outside of the scope of the representative’s department and needs to transfer. The first representative transfers the customer, who then has to start over with the second company representative at the new department. The employees aren’t delivering a bad experience on purpose; they are working within each department’s specified domain. If the customers’ problem is outside their domain, customers have to go to the other department. It is out of the employees’ hands.
Unfortunately, it does not come across that way to a customer. Whether it’s transferring to another department or a call center offshore, it’s one brand, one experience to customers. The customers want their problems solved, and every transfer pollutes that problem-solving experience.
We have a service called Customer Mirrors, where we have an experience as a customer and then report back to our clients what we observed. Working with an insurance company in England, we engaged in a few of these exercises. The first was crashing our car and making a claim. The second was flooding an apartment and making a claim. In the flood exercise, we uncovered a few third-party bumps in the road. It started when the consultant arrived to assess the damage and demanded a payment of £200 before they started. Our team members didn’t have it on them, but that didn’t deter the consultant. He walked our team member to an ATM to get it.
However, that was just the beginning of the bumps. Our team member became the project manager for the flooded apartment. Our team member had to keep the insurance company’s third-party contractors, like the painters and decorators, on task and moving through the restoration. The insurance paid for everything, but it wasn’t effortless for the team member to make a claim, which was vital feedback we gave the company.
What You Can Do to Manage Third-Party Parts of Your Experience
I would encourage more companies to manage these experiences your third-party partners deliver. These parts influence your customers’ perception of your Customer Experience and brand. It will reflect on you poorly if these third parties don’t perform well.
So, what systems are you going to put in place to manage these outsourced experiences? We have a few suggestions, including:
Look at things from your customer’s perspective: We all have frameworks as customers for how things work. For example, if you’re ordering the services through a company’s website, you consider those services provided by that company. Most of us do not create mental barriers there that separate the retailer from the third-party partners. If you’re violating what the customer expects, it would be best to have established processes for managing those situations if they go sideways. If you can’t determine the customers’ perspective, hire somebody to get it. These insights can help you reframe and communicate these details in a different way so customers can adjust their expectations and you can respond when you should.
Find out where you can extend your experience by using journey mapping: Journey Mapping can be insightful if you include the entire customer journey and resist limiting it to your customer process. Extending beyond the borders of your experience and understanding how customers enter your interactions can help you adjust and manage their emotions to the place you want with your experience.
Define the experience that you want to deliver: Once you know what you want the experience to be like, you can be specific in your actions to get there, whether for your organization or a third party.
Treat third-party employees as if they were your own. You should also measure their performance both operationally and experientially as you would your employees. Also, remember the BMW concept that no one is an ‘only-er’, everyone is part of the whole customer experience.
So, is it wrong to outsource part of your experience? We don’t think so. It can be a good idea in many situations. However, it a bad idea to decide what happens there isn’t your problem. To your customers, it is all the same experience, which makes it your problem when things go wrong. By seeing it through your customers eyes, understanding how customers feel coming into the experience, and defining the experience you want to deliver, you can then communicate to your third-party partners what you want, and get your customers what they want, too.
There you have it. No gimmicks, just good information.
We hope you enjoyed this issue of Why Customers Buy. If you have, please forward it to a friend or colleague.
Think reading is for chumps? Try my podcast, The Intuitive Customer instead. We explore the many reasons why customers do what they do—and what you should do about it. Subscribe today right here.