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What Type of Relationship Do You Want With a BPO?

In my last blog post, I outlined four fundamental considerations for selecting the right business process outsourcing (BPO) partner for your business. Next, I encourage you to focus intensely on this question:

What type of relationship do you want with your BPO?

This question is increasingly essential for small to medium-sized businesses that lack the influence of a large-scale enterprise account.

Over the past ten years, the BPO industry has continued to experience unprecedented consolidation to the tune of billions of dollars in M&A activity. This change has caused the BPO to focus on strategies designed to increase immediate return on investment, improve cost savings, and increase short term profitability. As a result, their business approach often turns more transactional than relational.

Recognizing which BPO practices a transactional or a relational approach is not easy. BPOs try to disguise the transactional process wanting you to believe their system is always relational. The challenge is understanding the difference and knowing what to look for.

A transactional BPO relationship refers to a one-size-fits-all business model. Efficiency and cost savings are the primary advantage. Policies and processes are clearly defined and consistent from one client to the next, leaving little room for flexibility and personalization. Pricing is the preferred method to dissuade the client from making changes to the process.

The disadvantage of delivering transactional experiences is that they are ineffective at sustaining loyalty. The ability to treat each account differently can be slightly more expensive. However, the long-term benefits are often tremendous.

For many businesses, customer experience is the company’s primary differentiator to win, drive, and create additional business. However, it goes much deeper than the customer experience. Purchasing behaviors and payment patterns vary from one client to the next. The strategies used to inspire purchases and prevent payment delinquencies in a manner that will be well received by the customer are also essential to sustaining growth.

Most companies understand that the relational approach is more effective at driving growth than a transactional approach. Companies are reluctant to outsource because most BPO’s do not make it easy for their clients to make changes. There are very few BPOs that are culturally committed to relationship building. Businesses also fear losing control of the customer if the customer begins to feel they are being treated more like a number than a valued customer.

If you are still unsure of how to determine what type of relationship you will have with a potential BPO, here are some pointed questions to ask:

  • How well does the BPO’s company culture align with your company’s culture?
  • Is the outsourcer’s organization structured in such a way to minimize or eliminate friction?
  • In what ways is the outsourcer able to demonstrate a commitment to continuously improve client relations and customer satisfaction?
  • To what extent is the outsourcer able to collaborate in order to prevent or resolve business issues that may arise from operational matters?
  • To what extent is the outsourcer willing to demonstrate full transparency and communication?
  • Does the outsourcer offer flexible all-inclusive price per program or is pricing rigid and itemized?
  • How often is the client allowed to make changes to their program, and if so, at what cost?
  • What are the friction points in the on-boarding process that can possibly create delays in getting your program to 100% productivity, and what is the outsourcer able to do to minimize or eliminate these friction points?
  • In what ways would your program vary from other programs the outsourcer utilizes for other clients with similar services?
  • How is technology utilized to improve the client and customer relationship?
  • How much experience do the leaders responsible for your program have in solving standard and uncommon problems as those seen in your business?
  • How will the outsourcer ensure that your program will be run to your expectations?
  • Is the company’s most immediate obligation to generate maximum ROI for its shareholders (public investors, or venture capital investors), or to improve client relations and customer satisfaction?

 

“Servicing Solutions plays a critical role in our success. Their ability to build solutions that work for our model — rather than trying to force our model into cookie-cutter solutions — is what sets them apart. Their senior leadership team is extremely hands-on and puts their years of experience to work for us daily. Servicing Solutions is not just another vendor; they are part of our extended team, and I expect that to continue in the years to come.”   Steven David, CEO, Peak Acceptance.

I would love to talk with you and discuss why these questions are essential.

Meanwhile, please visit our website, follow us on LinkedIn, and look for our next blog with our VP of Business Technology, Sean Bennett.  Sean plans to cover technology strategies to enhance the client relationship and improve the customer experience.

 

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