Offshore outsourcing of customer services – boon or bane?

Abstract

PurposeOffshore outsourcing of customer services is growing rapidly but there is little known about its impact on customer perceptions and behavior. This paper aims to combine the learnings from the country‐of‐origin and service research to address this gap.Design/methodology/approachAn online survey was conducted by contacting a sample of 5,000 customers randomly chosen out of a database of over 100,000 customers provided by a large American retail financial services company, immediately after they had an interaction with an offshore service representative, resulting in 548 complete and usable questionnaires.FindingsConsumer ethnocentrism has a negative influence on the attitude towards offshore outsourcing and the perceived service quality and customer satisfaction with offshore call centers. Customer satisfaction also mediates the influence of perceived service quality on customer complaint behavior, brand image, brand loyalty, and repeat purchase intentions.Research limitations/implicationsThis paper focuses on the effects of consumer ethnocentrism and attitudes towards offshore outsourcing on several perceptual and behavioral variables in a B2C context with American customers and Indian customer service executives. Hence, its findings may not apply to the B2B context and other country settings.Practical implicationsThe findings highlight the need for greater employee training as well as customer education for firms using offshore customer service centers, to minimize customer complaints and protect their brand image, loyalty, and repeat purchase intentions.Originality/valueThe study offers new insights on the impact of consumer ethnocentrism and attitude towards offshore outsourcing on customer perceptions and behavioral intentions, mediated by customer satisfaction and perceived service quality.