Why TPG can get away with offshore call centres

  • Accent vs Idiom
  • Complexity as the enemy of globalization
  • Offshoring can work...what's the secret ingredient?

This week’s The Economist included a special report on outsourcing and offshoring, considered by many the twin evils (or twin necessities, depending on which side of the ledger you sit) of a globalized world. Specifically, the report demonstrated a shift in attitudes towards the practice, as many firms are starting to bring some jobs back into their home countries, or shift their focus from using Chinese labour to sell to Western consumers, and towards using Chinese labour to sell to Chinese consumers. Attention is also given to the practice of using foreign service labour as well, particularly in call centres. And particularly in technical call centres.

offshore call centre

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The Problem

the interpreter

 

For 20 years now, the stereotype has been that ISPs and related (such as telcos and Pay TV providers) have used India as the source for cheap call centre labour, thanks to a few facts; English is a major first language in many areas, IT and software are part of the modern Indian cultural norm, and Indian workers were considered by and large polite, patient, hard working and professional. Moreover, India could use white collar services to distinguish themselves from China’s manufacturing powerhouse.

But the accent…even an Indian outsourcing executive had to admit “…we just can’t get the accents right”.
That is definitely not something to be sneezed at – but recent experiments in using cheap labour countries that are closer in form to the Anglosphere (such as South Africa) have still somehow come up short.

The most striking example is in the Philippines, which is primarily English speaking, Catholic and spoken with an accent that is mostly American flavoured. The workforce is tech literate and modern – these all seem like ideal ingredients for a culturally similar call centre labour pool that will be compatible with US, Australian, Canadian, NZ and English customers. And yet…no.

So what’s the problem? It might be that people are mistaking accents for idiom. It might take the work of a particularly gifted linguist to come up with the raw data, but it’s likely that the Indian and Filipino accents do not differ (on a basic, sound-waveform level) to the differences between Australian, Canadian, NZ, US and English accents (and of course, Scottish, Irish, etc). And yet, conversation between those countries is largely compatible. So it may not be strictly the accent.

Idiom

idiom

When an Australian consumer calls a centre in the Philippines, they’re almost always asked how the weather is. It’s the type of half-baked move that a consultant somewhere got paid a lot of money to suggest; why hide the fact that the phone call is taking place over an ocean? No-one is mistaking Fernando for a neighbor from Newcastle. It’s a marketing move to create a sense of familiarity that is utterly unnecessary and alien. Fernando probably also has an app on his PC to tell him the weather in each state he speaks to. It’s all nonsense.

The real bridge between Fernando and his Australian customer is that Fernando’s frames of reference, attitude toward customer service and life experience is completely divorced from the person he’s speaking to, who otherwise speaks the same language.
He speaks English at a different cadence, he watches different TV shows, is exposed to different cultural norms and likely does not converse with Australians outside of his work life, which is likely to be highly regimented with strict rules to follow (i.e. use the customer’s name twice…repeat the question back to them, regardless of whether or not that seems necessary…all calls must be completed with 420 seconds, etc).

Overcoming this can’t be done with band-aids like Fernando calling himself Gary, or with forced chit-chat.

Why it shouldn’t matter

rubiks cube

Uh...we sell broadband?

 

Of course, none of that should matter if the product being sold is simple. If Fernando’s role is to sell one of three possible products, or to explain a bill, or to help a customer reset a modem, then arguably this can all be done with minimal fuss. Many vendors in Australia, particularly in the food business, don’t speak English at all – but when the entire interaction is pointing to a menu item and paying for the product, you don’t need sophisticated interaction skills (apologies for the harshness of this summary- this is not to suggest that all recent immigrants work in the food industry).

So Fernando’s task need not be complicated. But as examined in the article ‘What does 'Dumb Pipe' mean, and why do you care’ – some ISPs have very different views on what it means to provide internet access.

Fernando works for Interconnectel

Let’s say Fernando works for Interconnectel, a telecoms giant with a toehold in every telecom market – fixed line broadband, mobile broadband, home phone, mobile phone, business connections, Pay TV – you name it, they can offer it. Some of their products have small margins, some have big. Fernando earns commission for selling connections and products that have a higher margin for the company.

Fernando is also under pressure to turn each call into a lead for a sale. If the customer is calling about a bill, suggest a different plan. If the customer is having problems with their modem, try selling a new modem. If the customer is angry about anything, apologize and suggest their amazing new product. If Fernando fails to convert at least 50% of interactions into some type of revenue generating action, he misses out on all commissions.

Fernando is not focused on delivering a solution to your problem – unless you can define ‘solution’ the way Interconnectel’s marketing department would like to – which means any type of sale.

This means that every interaction requires a lot of focused needs-based analysis, as Fernando looks for things that you’re saying that could lead to some sort of sale. If it’s near the end of the month, he may be desperate. DSL modem not working? How about 4G mobile broadband?

Fernando is focused on the quality assurance person listening in. And that ‘quality’ that’s trying to be assured has less to do with your satisfaction than it does with satisfying Interconnectel, who have strict metrics in place that Fernando’s call centre has to adhere to. He’s not talking to you – he’s sticking to a script that has been designed to lead to a sale. He can’t concentrate on what you have to say, because it’s not about that for him.

It should be pointed out of course that Fernando’s Aussie counterpart, Jake, sitting in a call centre in Collins St Melbourne, has the exact same sword over his head. But when you get Jake, he might be able to work in his sales pitch a bit more seamlessly, thanks largely to your shared cultural touchstones.

Fernando works for TPG

tpg

 

TPG has stuck to a fairly simple business plan. They are all about DSL, which is the most common and widely available method of getting a decent broadband connection in Australia. This means investing heavily in a fibre network across the country, connecting to exchanges that serve a large number of people. They’ve also invested in their own undersea links to the US internet. They don’t have to ‘rent’ much, so they can offer huge value on their plans.

For all other parts of the telecommunications equation, they just meet the market. This includes line rental, the term for what really amounts to the link between your home and the telephone exchange, where your line can connect to TPG. As with everyone else, TPG rents this off of Telstra. For mobile broadband and mobile phone, TPG doesn’t build towers – they rent space off of Optus and sell at about cost. For Pay TV, they tried Fetch TV (an ad hoc web-based Pay TV service), but have abandoned that lately to concentrate on their real business- getting people connected to the internet.

For most customers, they offer three basic plans. 20GB for $40, 100GB for $50, and Unlimited for $60. For people who use their landline to make calls, they offer some good free call packages; but their most competitive product is that $60 Unlimited plan. It’s straightforward, no-nonsense, and earns them heaps of money while also offering what a huge portion of the public want – a simple, unlimited connection to the net.

When you call Fernando at TPG, it’s unlikely to be with a billing enquiry. All bills are essentially pre-paid, with direct debit being the only payment method. There’s little scope to get ‘bill shock’, thanks to their being few products with hidden exclusions and overuse fees. TPG can avoid all that by not making their plans complicated.

If you call with a sales enquiry, Fernando can explain the entire product line in about 2 minutes.


If you call with a tech enquiry, Fernando will not insist you use a TPG modem, because TPG doesn’t sell modems at any sort of special deal. They sell one brand of modem (Netcomm), and they don’t use any special protocols or settings. Almost any modem will be compatible.

In other words, TPG treat this as a utility, not as Disney Land. This isn’t a magical world of high-tech wizardry – this is about making sure your home has a light on the modem.

Results

TPG has its detractors, but both Roy Morgan research and the Telecommunications Industry Ombudsman have released data sets to show that TPG, despite its ‘budget’ reputation, enjoys slightly better customer satisfaction results than Optus, and much better than Telstra. It might be a combination of a low price setting low expectations, but who cares? TPG also makes steady, if unspectacular profits, in a market thought to be saturated.

Conclusion

simplicity

If you’re a massive, multi-faceted telecoms empire, you might want to stick with an Aussie based service and support team who can integrate the constant sales pitch into a friendly rapport with your Australian customers.

But offshoring is fine when the person in the far-flung call centre is focused purely on delivering a solution to the customer’s actual problem, rather than treating it like a date, with lots of double entendre. Sometimes when a customer wants their modem fixed, this is not the same as inviting you up for a coffee- they have better things to do than being on the phone with you.

The utility model of providing telecom services may not be terribly sexy, but it works. Why can’t more providers take this approach? Maybe in time, they won’t have a choice but to do so.