November, 29, 2011: As the world fights way through the recession, the companies are imposing restrictions within itself in terms of cutting cost, postponing investments, and stretching the budget. Resource constraints are forcing the companies to low profile while they are not able to maintain competitive advantage. This calls for the need to ensure customer loyalty.
It is during such difficult times that loyal customers become the point of attraction as a captive source of revenue. A successful customer loyalty strategy seems to a secret weapon that any mature company brandishes to earn decent revenue. In order to strike a balance between investment and spending companies are increasingly looking to draw benefits from strategic outsourcing.
Even though companies were aware of the benefits of outsourcing, they used to carry out loyalty programmes in house over the past few years, the period when resources were plenty. With the constraints in resources, companies now resort to outsourcing, and they are still able to generate better customer value and build competitive advantage. More over they are able streamline and reduce operational costs.
Over the years, outsourcing is considered to be a simple method to cut cost. Organizations outsource their non core business functions to third parties and earn substantial cost savings. While outsourcing Information Technology function, organizations retain a small team of experience IT professionals who work through the third parties. When organizations outsource their customer loyalty programmes they demand for strong technology platform and the use of latest, safe and complete Loyalty solutions that are adopted by leading and profitable players in the industry they belong to.
Critics of outsourcing say that, by outsourcing loyalty programmes companies are surrendering their control to third party service providers. But in reality, outsourcing helps companies to offer better services to its customers by making use of the abilities of the outsourcing service providers who have expertise in the field being outsourced.
Outsourcing of customer loyalty functions help organizations in achieving cost reduction, flexibility, and agility. The main objective is to enhance performance and improve relationships significantly. This is achieved with the increasing technological capabilities of the outsourcing service providers and their ability to grant access to latest CRM technologies.
Outsourcing offers the organization cost reduction by paying only for the services user in each transaction apart from regular software updates and customizations. A major development in CRM or customer loyalty outsourcing is partnerships and strategic alliance. This often helps in sharing risk and reward between the partners.