Business Services, Thought Leaders

9 Reasons Companies Fail at Outsourcing

August 27, 2019

by Michael Borgelt

Founder, 51Blocks

For a business to succeed, it must approach outsourcing effectively. Use this article to understand the reasons why companies struggle with outsourcing.

Outsourcing is an important business strategy for many companies. But, outsourcing can be a difficult process. Businesses can use this article to prepare for the potential perils of outsourcing and get ready to run a smooth process.

1. Unfamiliarity With the Industry

It’s important for white label partners to understand the small businesses and companies they work for. They must also understand their clients’ business spaces. If a client has a question, you better know the answer. Don’t shake a client’s trust in your agency.

The entire transfer process should be painless. Be confident, well-informed, and educated.

outsourcing explainer

Clients are willing to move their business away if they feel you’re unprepared. Answering simple questions doesn’t take much work, but it’s critical to demonstrating professionalism and reliability.

2. Clients Feel Unengaged and Neglected

It is important to demonstrate that you are always available to assist clients. Be the one point of contact that clients can rely on.

You can do this by being proactive in setting up phone calls and emails. Simply remind the business that you are there. Businesses will be able to ask the small questions they have and build a stronger relationship with you.

Checking in once every few weeks will keep your relationship strong. Inform businesses immediately if there is anything they need to know. Being responsive and communicative will keep your clients

3. The Agency Is Disorganized

This may seem obvious, but if your agency isn’t organized problems will run rampant. There are dozens of ways to stay organized. Keep all of your information in one place. Having a central database or shared inboxes that the white label partners and all involved parties have access to can help communication and understanding.

Keeping everyone on the same page is important. This is as simple as making sure all staff involved are properly trained. It’s important to have rules and processes for day-to-day tasks. This keeps everything running successfully and makes dealing with negative situations easier.

4. Costs and Expectations Aren’t Made Clear

Failing to establish clear costs and benchmarks for an outsourcing project is courting disaster.

Without a clear definition, clients will be uninformed about a project’s Key Performance Indicators (KPI) and Pay Per Click (PPC). A lack of information causes distrust, and distrust can breed anger directed from clients to your agency.

Communication in all levels of business will help improve trust, and any form of effective communication includes clear expectations and costs.

5. Clients Feel Unappreciated Due to Lack of Personalization

Every client is different, each with their own needs for their business. Making sure to treat every client professionally and respect is essential for a healthy working relationship. Knowing the hard facts about a company is important, and so is remembering details about the people that work there.

Switching to a white label partner after working directly with an agency can be difficult for clients. They often can feel their needs aren’t being met and that the agency they’re working with doesn’t understand their priorities and personnel.

Know the people you are working with directly by name. Remember how they like to be contacted. Some clients will value a highly professional atmosphere; others may prefer a more humorous, personal workplace.

Understand your clients and make sure they feel appreciated.

6. Forgetting the Target Audience

Any product you produce for a client must be catered to its target audience.

For example, a website must be user-friendly. It may seem most convenient for an outside agency to focus on SEO keywords, but jamming a page with keywords will make the customer experience worse.

People will generally raise an eyebrow if you have seven different adjectives just for one title, as it appears disingenuous. What might look good to companies won’t always look good to customers.

Remember to target audience when your agency outsources.

7. Failing to Explain the Process to the Client

As mentioned, staying in regular contact with your client is important. Nobody likes the feeling of being forgotten about. This can lead to the client thinking that they need to take matters into their own hands.

This is the last thing you want a client to believe. If they believe that they need to do it themselves, there’s a chance you may lose the client entirely. Make clear your activities as the process evolves.

benefits of outsourcing

Making sure clients understand the process will help them relax and let the agency handle things. You want all of your partners to feel secure in that everything is being handled properly. Keep in mind that when working with small- and medium-sized businesses  you are working with someone’s livelihood.

Treat every client like their business is the most important thing in their life. Chances are it is.

8. Forgetting the Importance of User Psychology

Some agencies fail to take advantage of user psychology.

This is a mistake.

User psychology is what drives sales, site visits, and all manner of user behavior. By changing small details – such as the font, formatting, and color of a website – you can prod users towards an ideal behavior.

Whatever your industry and whoever your client, remember to sweat the small details and make sure user psychology plays to your advantage.

9. Poorly Handling Upset Clients and Customers

Raw feelings happen. It’s a part of business, and it’s certainly a part of outsourcing. Clients and customers can naturally become upset, defensive, and uncomfortable with outsiders running an operation that was previously in-house.

To avoid fully alienating your clients, your employees must weather emotional storms and deploy top-tier customer service. Train your employees and make sure they are able to properly deal with people-facing aspects of their roles.

Beware of Outsourcing Pitfalls

Outsourcing should, ultimately, be a rewarding personal and professional experience for your agency and for your clients. But, there are pitfalls and problems to avoid. Be intentional and thoughtful about your agency operations and you will run a successful operation.

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