Outsourcing means reputational risk

Given that managing corporate reputation has become such a crucial issue in the global village, I’m left in awe at the incompetence of call centres to which otherwise level-headed CEOs relegate their customer service.

Outsourcing is a growing and legitimate business trend. The filter question that should precede any outsourcing decision must be: ‘Is this part of our core business?’ If it’s not, then outsourcing may be an option. But when is good customer care, service and attention not part of anyone’s core business? Only when that individual or organization has become inappropriately and internally focused on production or processes rather than people, does it cease to be a core focus. And that’s the beginning of the end for that organization. It might sound like a melodramatic claim. It might also take a long time to bear its bitter fruit. But the universal and business law of cause and effect will ensure that the harvest reaped is according to that sowed and your customers will vote with their feet.

Many call centres see themselves in the business role of Dominican friars. The Dominicans (form the Latin ‘dogs of God’) were originally positioned as custodians and protectors of the Roman Catholic faith. Call centre staff somehow see themselves as the defenders of access to another level of competence. They seem not to know when to escalate an issue to another level. They are usually business bottom feeders. The paradox remains that most organizations will put at the customer interface point, the most socially unsophisticated, poorly educated, untrained in communication or conflict resolution, lowly paid individuals. Isn’t that simply bizarre? You’d think logic would dictate that image-impacting people are well-trained, motivated, product and service literate. But cost-cutting gets in the way and outsourcing this crucial function morphs into a scale of efficiency or logistics exercise.

In the last few months I’ve had to by-pass all ‘escalations’ in the local Hewlett Packard outsourced service centre – Sykes – and get a personal e-mail to CarlyFiorina, the international president of HP. Butt got kicked all the way down the line and my problem was swiftly resolved. This is not uncommon. There isn’t a month that goes by without me head-butting with a call centre.

Most recently, my business partner’s name got screwed up by mweb’s inappropriately name Business Solutions. They reversed the syllables of his name in his e-mail address. A white woman in the mweb call centre said, ‘But it doesn’t really matter.’ Huh? What if we did a spoonerism on her name? No wonder black people get angry with the many whites who don’t make any effort to pronounce African names correctly or even to attempt a click in the right place. It’s taken more that fifteen phone calls from me alone and the issue is, at the time of writing this, still unresolved. The latest corker from mweb was ‘it can’t be fixed.’ Well, that defies the laws of logic, because if someone screwed it up in the first place, without putting too fine a point on it, can’t it be ‘unscrewed’?

By and large, call centres don’t have your business interests at heart. They often don’t even bear the name of your business. So why should they bother that they’re upsetting your customers? Give a little thought to this: Add up your advertising, marketing, communications, PR, customer relationship management and promotional budgets. It’s likely to be a sizable sum amount of money. Now ask yourself if it makes sense to put that in the hands of someone who tells a customer that reversing their name in the e-mail address ‘doesn’t really matter.’ I rest my case.

Don’t lightly mess with brand names or equity

One of the greatest temptations on mergers, acquisitions or takeovers is to start changing things to make it look like something’s happening quickly. If there’s one piece of advice from the neurons of the legendary Jim Collins of Good to Great authorship fame, it is: Ask a lot of questions and do a lot of listening (to all stakeholders) before you start changing anything.

Image is a delicate bloom. It takes years to acquire a reputation, lustre, easy recognition, ideally familiarity and finally a comfortable niche in the minds of consumers. The sums of money, energy, creativity and effort that go into the long slow haul that constitutes image and reputation building, are a significant investment.

Wits University marketing professor Roger Sinclair recently valued brand South Africa at US$ 55 billion. That we’ve reached the point of being able to put a value to the brand equity of our country is an exciting moment. That same principle applies to the brand value of organizations and indeed even individuals. As I understand it, international accounting practice is going to permit brand value to be reflected as an asset on corporate balance sheets. This is logical, because they’re ‘bought’ at great cost.

Since brand equity is so valuable, it should be fiercely protected and nurtured. The ultimate compliment cum curse is, of course, when your brand name becomes the generic in the mind of the consumer. Example: Hoover, when it’s unlikely that your vacuum cleaner is actually a Hoover. Xerox when your photocopier is probably Japanese, or nylon (once a DuPont brand name) for any fabric other than cotton or wool. The latest in my experience is ‘Proxima’ as the generic for a data projector used in presentations or for home theatre purposes. Proxima was one of the early market entrants to this category and it’s interesting to see how quickly it’s moved to generic status.

Although it’s flattering to become the generic, the downside of course, is that it means people aren’t really paying attention to the brand name of whatever it is that they’re talking about or buying. So it poses some unique problems for the marketing people involved.

A current example in South African business is the decision, if shareholders approve, to change the name of New Africa Capital (NAC) back to Metropolitan. Metropolitan was a household name in insurance in South Africa. One wonders what new broom acted as the catalyst for changing it. If they’d paused for more than an instant or received competent marketing advice, they would probably never have done so. It’s basically ditching one huge investment and signing off on another of even greater magnitude to build a new band identity. The problem with any new brand name, is that it’s unlikely immediately to enjoy the goodwill of its predecessor.

There are two ways of changing brand names. One takes a lot of money, the other a lot of time. The merging of United, Allied, Volkskas and Trust into the ABSA name took vast sums of money and concerted marketing effort. There’s no doubt that little old silver haired ladies and their ilk marched off in high dudgeon on the disappearance of ‘their’ bank or building society. Consumers experience a high level of inertia and resentment when their products, publications or indeed even merchandise layout in a favourite supermarket is messed with. So sensitive is this issue that even the mighty SA Breweries as it then was, took a knock when it ‘modernised’ the label on one of its beers. Township rumour flew swiftly to the effect that the beer was different. Remember the attempt at re-branding Coca-Cola? ‘Nuff said.

The second route is what’s called ‘brand migration.’ That’s when you put the new name in the communications, on the stationery and the brand in a visible but inoffensive way. Then, over a considerable period of time, you ‘upweight’ it – meaning increase the size – until it becomes possible, easily and without disruption, to punt the new ID in place of the original in advertising and marketing. What Metropolitan allowed to happen to their brand name is a lesson in how not to do it.

What does this all tell us? Simply that just as great thought should and hopefully does go into the crafting of a brand name and identity, so similar thought should go into its nurturing and preservation. Change or fiddle with it at your peril.