A word of advice to customer call centers: Location matters.

In the drive to become low-cost producers in their industry categories and to be price-competitive in a down economy, many companies are looking into every corner of their business to wring out excess costs wherever they can.

And with business as soft as it is right now, one would think that telephone customer contact centers are a prime target for outsourcing and offshoring. After all, it’s one of the more labor-intensive operations. And relying on resources in English-speaking Second and Third World countries is far cheaper than employing American workers — 50% to 75% less costly by some estimates.

But instead of migrating offshore, evidence is mounting that some companies are beginning to bring their call center operations back into the United States instead.

Why is this happening? Well, when one considers that the purpose of a call center is to promote customer satisfaction, placing these functions offshore hasn’t exactly accomplished that. It’s a topic I’ve addressed before in this blog.

And now, we have new survey data that prove it. A recently-published survey conducted by CFI Group (Claes Fornell International) covers 2,200 respondents who rated telephone customer contact centers run for retailing firms, cable/satellite TV providers, cellular phone service providers, financial service firms, computer equipment manufacturers and government agencies.

The annual survey uses the University of Michigan’s American Customer Satisfaction Index to rate overall satisfaction. In this year’s study, that satisfaction index stands at 74 on a 100-point scale. Not a great score by any stretch; in fact, most companies would surely want to score better.

But when comparing the ratings for domestic call centers versus offshore ones, the differences are stark. The domestic satisfaction index was 84, while the offshore index was only 62.

Moreover, the survey respondents were nearly twice as likely to recommend a company or product to others if they thought the customer contact center reps are in the United States … and three times more likely to abandon the brand if the call center is located offshore.

Is this disparity in results simply the result of American nativism or chauvinism? Perhaps. But it becomes a lot harder to discount the differences when we see that respondents reported that U.S. call center reps resolved their problems 68% of the time during the first contact — “first-call resolution” in industry jargon — as compared to only 42% of the time for contact centers located offshore. That’s a difference that can’t be ignored.

Looking into every corner of a business to find ways to drive down costs certainly makes sense. But in the case of customer call centers, there’s clearly a danger of being “penny-wise, pound-foolish” … and risking a customer backlash that ends up negating any cost savings you might have realized – or worse.

Welcome to the Customer Service Department … Dante Alighieri will be your tour guide.

Who hasn’t faced the frustrations of dealing with what passes for customer service today? I recall an ordeal several months ago when I spent the better part of three hours on the phone with Hewlett-Packard’s customer service department – if you could call it customer service – trying to get an issue resolved with reloading a printer driver for an HP model that is no longer classified as “current” – which in my case was a printer I purchased five or six years ago.

Because my model was older, I was transferred to a different help desk that turned out to be an outsourced/offshore area of HP’s customer service. (Presumably, the good folks at HP seem to think that outsourcing technical questions about older equipment will actually give their customers access to better knowledge than their own in-house personnel can provide …?)

The first 90 minutes of my ordeal were spent trying to talk to someone who could actually solve my problem, but about 90% of those 90 minutes were basically spent on hold. The next nearly 90 minutes was taken up with attempting to get my $59.99 service charge reversed, since I had been unable to speak with anyone who could actually assist me with my problem.

That’s an evening of my life I’ll never get back.

… Which made a new book just published on the woeful state of customer service capture my attention all the more. In Emily Yellin’s book “Your Call Is (not that) Important to Us,” (Free Press, ISBN-13: 978-1416546894 … also available in a Kindle edition), the author gives us plenty of statistical information, polling results and excerpts from studies to help chronicle the sorry state of today’s customer service affairs.

But it is Yellin’s “customer service hell” anecdotes – far more horrific than my own experience with Hewlett-Packard – that stick most in the memory. Those stories certainly provide fodder for a sort of morbid fascination; reading them is not unlike seeing an auto accident unfold in slow motion before your very eyes: You know what the final result is going to be but you can’t resist seeing it through all the way to the end.

Fortunately, not all is bad news. The author also cites some examples of where companies are trying – pretty diligently – to deliver a customer service experience that is at least “serviceable.” The book is a worthwhile read.

But back to my own experience. How did things turn out? Well, after nearly three hours on the phone, I was finally able to get my charge for service reversed. Then, rather than spend any more time trying to work with my HP printer, I simply purchased a new one. It was a Canon.