Most credit cardholders know that the credit card industry made a decision to outsource call-in service centers to overseas locations where English is the second or third language. That decision was made to save operational costs on labor. Yet, what is the ongoing impact on North American credit cardholders?This article discusses the five most common communication problems that negatively impact North American credit card customers today as a result of the outsourcing of customer service centers.While these problems could have been predicted had credit card industry decision makers studied the literature on the complexities of language proficiency and culture, they didn’t. Now the industry is grappling with makeshift solutions to extreme customer dissatisfaction.The Customer’s Need – Quick Financial SolutionsIn each of the five examples below, a credit cardholder has called his credit card company, or is responding to a new credit offer, in hopes of finding a financial solution to a financial problem. He may need a new credit card so he can pay medical bills. He may need to get his car fixed so he can get to work. He may need a balance transfer in order to reduce his interest rate and avoid bankruptcy. Yet, whatever his need, it is likely that any problem or delay in getting that financial solution in place will cost him time, frustration and money.Yet, as ubiquitous as credit card transactions have become, their success in providing quick financial solutions for credit cardholders depends upon precise written and oral communication. This includes the accurate keying in of all relevant information and the conveying of accurate interest rates, financial terms and repayment obligations, all of which become part of a legally-binding contract between the credit card customer and the company with which he does business.The Agent’s Job – More Complex Than RealizedThe job of credit card agent is, sometimes, mocked because of the low pay it commands. However, to do the job well requires that an agent be an expert oral communicator with superior reading skills who can answer a customer’s questions while quickly sorting through what is, sometimes, confusing, duplicated or poorly organized on-line information.These complex language skills, however, have been misunderstood, underestimated and undervalued, as illustrated by five common problems that occur when an agent does not have them.The Five Most Common Problems1. Overlooking Account RestrictionsAn agent overlooks a “restriction” on a credit card account and the transaction fails.A restriction is something that prevents or limits the use of a credit card. The most common restriction results from the fact that a credit card has not yet been “activated.” The procedure for activating the card usually requires that the customer call a specific 800 number that is listed on the new card and confirm, through an automated system, that he has received the card.A customer can also place a restriction on a card, such as a dollar amount limit for individual transactions. Yet, sometimes, a customer will opt to put a restriction on his account and then forget that he has done so.It is up to the agent to scan the account for restrictions and make sure there is nothing to prevent the transaction from going through. Yet, noticing the presence of those restrictions requires fast, careful and accurate reading.Overseas agents, more than North American agents, tend to overlook restrictions, such as when a new account has not yet been activated.2. Spelling ErrorsAn agent makes a spelling error in the documentation for the “receiving” account in a balance transfer transaction and it fails to go through.Should the company name or address of the receiving account be misspelled, the transaction will fail. Misspellings most often occur because overseas agents are not familiar with American geography or place names. Common mistakes: “J C Penney” is spelled “J C Penny” or MA is used as the abbreviation for the state of Maine instead of ME.3. Sending Money To An Account That Cannot Receive ItAn inexperienced agent does not know a transaction is not possible.Some bank checking accounts allow direct deposits from credit card companies, others do not. An inexperienced overseas agent, unfamiliar with U.S. banks, often will not have access to this information. He will, subsequently, attempt to send money to a bank account that cannot accept it.4. Misreading An OfferA balance transfer offer is read incorrectly and a customer is either trapped in a high rate or assessed an unexpected feeBased upon his reading of on-screen offer #5, the agent believes that a customer will pay 0% interest on his balance transfer for 12 months if he opts for offer #5, and he tells the customer so. A more accurate reading of the documentation reveals that offer #5 has a provision which will require that customer to pay 18% interest on his balance transfer.While there was a balance transfer offer with an introductory interest rate of 0%, because the information can be poorly laid out, confusing and even duplicated, the agent misreads or misses the fine print and selects the offer with an 18% APR by mistake.Or, the agent chooses the offer that requires an upfront fee for a balance transfer.Or a 3% fee is part of an offer that the customer, inadvertently, chooses because the agent either a) did not read that part, b) read it but did not understand that the customer would be billed a fee, and/or c) did not convey to the customer that the fee was part of the offer.5. Selection Of Wrong On-Screen OfferAn agent selects the wrong on-screen offer by mistake.After reading the terms for a couple of credit card offers to the customer, the agent means to go back and choose the offer that the customer indicated he wanted. However, since the onscreen offers look alike and there can be duplicate offers on-screen, the agent inadvertently chooses the wrong one.A Customer’s NightmareThose within the credit card industry who find themselves trying to help a distressed customer after one of these “deals” has been transacted, and the money moved from lender B to lender A, describe the process as “a nightmare” for the customer, and very difficult for any agent trying to assist him.In most cases there is no remedy for the customer, who can be on the hook to pay money he doesn’t have, yet the customer often spends hours on the phone waiting to speak with agents, explaining his problem, and being transferred from one department to another, day after day, until he gives up.At that point, should the customer be able to pay off or transfer his balances to a different credit card lender and extract himself from the one with which he is now furious, he will take his business elsewhere and never come back.Credit card companies, therefore, are learning a hard lesson in how language works and how important effective communication can be. For the credit cardholder who has been burned, they cannot learn it too fast.What Effective Verbal Communication RequiresEffective communication requires significant give and take between conversing parties. Agents must pick up subtle language cues when they are listening to customers, as customers are not always explicit.For the agent attempting to work in a “second language”, it may take years before he can communicate well enough to be able to recognize those cues. Since language and culture are inextricably bound, some cues may be very difficult to learn without a direct experience of North American culture. However, the subtleties that the agent misses can be vital details in completing financial transactions correctly.It should, therefore, be no surprise that credit card companies receive millions of complaints each year from customers who say they were not able to understand the overseas agents they spoke with and/or that those agents seemed unable to understand them.Companies Experimenting With SolutionsAs a result, those credit card companies that make the most extensive use of offshore outsourced customer service (and some very large credit card companies only use outsourced customer service) are acutely aware of the problem and are currently experimenting with what they hope will be solutions.These experiments include funneling calls into a type of “clearing house,” sorting them according to technical difficulty, and then transferring each customer to a call center that, from past experience, can provide the necessary assistance.However, these experiments will not involve abandoning the outsourced customer service model any time soon. The tens of millions of dollars that credit card companies save by buying offshore service at $4.00 an hour will not be abandoned lightly.Instead, look for more strategies that involve directing balance transfer inquiries away from agents who, potentially, may experience communication difficulties and shifting those inquires toward centers with balance transfer specialists who have “proven ability” in these transactions. These balance transfer specialist centers will, most likely, be in North America.SummaryCustomers are experiencing inconvenience and financial loss due to the overseas outsourcing of credit card service centers. Miscommunication with overseas credit card agents whose first language is not English is a significant problem and negatively impacts financial transactions.The credit card industry is aware of the situation and is searching for solutions that will decrease incidents of miscommunication and increase customer satisfaction. The attempts by different credit card companies to solve this problem are likely to be varied and may have uncertain results.If you are looking to transact a balance transfer, whether on a brand new credit card account or on an existing account, you must be aware of this problem and I suggest you follow the strategies outlined in my article Credit Card Balance Transfers – How To Avoid Disaster.Also, be aware that an ounce of kindness or humility will often be repaid many times over by an agent who will then go out of his way to be helpful. So remain polite and respectful when calling in for assistance. When a tense conversation can be toned down with humor, do so as long as the agent understands you are not making fun of him.My final recommendation is one I’ve made in other articles, however, it deserves repeating.Should you be concerned that you are not being properly understood by the overseas agent who is facilitating your legally-binding balance transfer or other credit card transaction, you can ask to be transferred to a North American agent.However, do not request to be transferred to an agent in the United States because that will exclude Canadian call centers. Yet, in this industry as a whole, the best customer service comes from Canada. Canadian agents have a strong and established reputation for knowledgeable, effective service in the credit card business, so if you can land one to work on your balance transfer, consider yourself lucky.
What Are The Greatest Changes In Shopping In Your Lifetime
What are the greatest changes in shopping in your lifetime? So asked my 9 year old grandson.
As I thought of the question the local Green Grocer came to mind. Because that is what the greatest change in shopping in my lifetime is.
That was the first place to start with the question of what are the greatest changes in shopping in your lifetime.
Our local green grocer was the most important change in shopping in my lifetime. Beside him was our butcher, a hairdresser and a chemist.
Looking back, we were well catered for as we had quite a few in our suburb. And yes, the greatest changes in shopping in my lifetime were with the small family owned businesses.
Entertainment While Shopping Has Changed
Buying butter was an entertainment in itself.
My sister and I often had to go to a favourite family grocer close by. We were always polite as we asked for a pound or two of butter and other small items.
Out came a big block of wet butter wrapped in grease-proof paper. Brought from the back of the shop, placed on a huge counter top and included two grooved pates.
That was a big change in our shopping in my lifetime… you don’t come across butter bashing nowadays.
Our old friendly Mr. Mahon with the moustache, would cut a square of butter. Lift it to another piece of greaseproof paper with his pates. On it went to the weighing scales, a bit sliced off or added here and there.
Our old grocer would then bash it with gusto, turning it over and over. Upside down and sideways it went, so that it had grooves from the pates, splashes going everywhere, including our faces.
My sister and I thought this was great fun and it always cracked us up. We loved it, as we loved Mahon’s, on the corner, our very favourite grocery shop.
Grocery Shopping
Further afield, we often had to go to another of my mother’s favourite, not so local, green grocer’s. Mr. McKessie, ( spelt phonetically) would take our list, gather the groceries and put them all in a big cardboard box.
And because we were good customers he always delivered them to our house free of charge. But he wasn’t nearly as much fun as old Mr. Mahon. Even so, he was a nice man.
All Things Fresh
So there were very many common services such as home deliveries like:
• Farm eggs
• Fresh vegetables
• Cow’s milk
• Freshly baked bread
• Coal for our open fires
Delivery Services
A man used to come to our house a couple of times a week with farm fresh eggs.
Another used to come every day with fresh vegetables, although my father loved growing his own.
Our milk, topped with beautiful cream, was delivered to our doorstep every single morning.
Unbelievably, come think of it now, our bread came to us in a huge van driven by our “bread-man” named Jerry who became a family friend.
My parents always invited Jerry and his wife to their parties, and there were many during the summer months. Kids and adults all thoroughly enjoyed these times. Alcohol was never included, my parents were teetotallers. Lemonade was a treat, with home made sandwiches and cakes.
The coal-man was another who delivered bags of coal for our open fires. I can still see his sooty face under his tweed cap but I can’t remember his name. We knew them all by name but most of them escape me now.
Mr. Higgins, a service man from the Hoover Company always came to our house to replace our old vacuum cleaner with an updated model.
Our insurance company even sent a man to collect the weekly premium.
People then only paid for their shopping with cash. This in itself has been a huge change in shopping in my lifetime.
In some department stores there was a system whereby the money from the cash registers was transported in a small cylinder on a moving wire track to the central office.
Some Of The Bigger Changes
Some of the bigger changes in shopping were the opening of supermarkets.
• Supermarkets replaced many individual smaller grocery shops. Cash and bank cheques have given way to credit and key cards.
• Internet shopping… the latest trend, but in many minds, doing more harm, to book shops.
• Not many written shopping lists, because mobile phones have taken over.
On a more optimistic note, I hear that book shops are popular again after a decline.
Personal Service Has Most Definitely Changed
So, no one really has to leave home, to purchase almost anything, technology makes it so easy to do online.
And we have a much bigger range of products now, to choose from, and credit cards have given us the greatest ease of payment.
We have longer shopping hours, and weekend shopping. But we have lost the personal service that we oldies had taken for granted and also appreciated.
Because of their frenetic lifestyles, I have heard people say they find shopping very stressful, that is grocery shopping. I’m sure it is when you have to dash home and cook dinner after a days work. I often think there has to be a better, less stressful way.
My mother had the best of both worlds, in the services she had at her disposal. With a full time job looking after 9 people, 7 children plus her and my dad, she was very lucky. Lucky too that she did not have 2 jobs.
Alternative Financing Vs. Venture Capital: Which Option Is Best for Boosting Working Capital?
There are several potential financing options available to cash-strapped businesses that need a healthy dose of working capital. A bank loan or line of credit is often the first option that owners think of – and for businesses that qualify, this may be the best option.
In today’s uncertain business, economic and regulatory environment, qualifying for a bank loan can be difficult – especially for start-up companies and those that have experienced any type of financial difficulty. Sometimes, owners of businesses that don’t qualify for a bank loan decide that seeking venture capital or bringing on equity investors are other viable options.
But are they really? While there are some potential benefits to bringing venture capital and so-called “angel” investors into your business, there are drawbacks as well. Unfortunately, owners sometimes don’t think about these drawbacks until the ink has dried on a contract with a venture capitalist or angel investor – and it’s too late to back out of the deal.
Different Types of Financing
One problem with bringing in equity investors to help provide a working capital boost is that working capital and equity are really two different types of financing.
Working capital – or the money that is used to pay business expenses incurred during the time lag until cash from sales (or accounts receivable) is collected – is short-term in nature, so it should be financed via a short-term financing tool. Equity, however, should generally be used to finance rapid growth, business expansion, acquisitions or the purchase of long-term assets, which are defined as assets that are repaid over more than one 12-month business cycle.
But the biggest drawback to bringing equity investors into your business is a potential loss of control. When you sell equity (or shares) in your business to venture capitalists or angels, you are giving up a percentage of ownership in your business, and you may be doing so at an inopportune time. With this dilution of ownership most often comes a loss of control over some or all of the most important business decisions that must be made.
Sometimes, owners are enticed to sell equity by the fact that there is little (if any) out-of-pocket expense. Unlike debt financing, you don’t usually pay interest with equity financing. The equity investor gains its return via the ownership stake gained in your business. But the long-term “cost” of selling equity is always much higher than the short-term cost of debt, in terms of both actual cash cost as well as soft costs like the loss of control and stewardship of your company and the potential future value of the ownership shares that are sold.
Alternative Financing Solutions
But what if your business needs working capital and you don’t qualify for a bank loan or line of credit? Alternative financing solutions are often appropriate for injecting working capital into businesses in this situation. Three of the most common types of alternative financing used by such businesses are:
1. Full-Service Factoring – Businesses sell outstanding accounts receivable on an ongoing basis to a commercial finance (or factoring) company at a discount. The factoring company then manages the receivable until it is paid. Factoring is a well-established and accepted method of temporary alternative finance that is especially well-suited for rapidly growing companies and those with customer concentrations.
2. Accounts Receivable (A/R) Financing – A/R financing is an ideal solution for companies that are not yet bankable but have a stable financial condition and a more diverse customer base. Here, the business provides details on all accounts receivable and pledges those assets as collateral. The proceeds of those receivables are sent to a lockbox while the finance company calculates a borrowing base to determine the amount the company can borrow. When the borrower needs money, it makes an advance request and the finance company advances money using a percentage of the accounts receivable.
3. Asset-Based Lending (ABL) – This is a credit facility secured by all of a company’s assets, which may include A/R, equipment and inventory. Unlike with factoring, the business continues to manage and collect its own receivables and submits collateral reports on an ongoing basis to the finance company, which will review and periodically audit the reports.
In addition to providing working capital and enabling owners to maintain business control, alternative financing may provide other benefits as well:
It’s easy to determine the exact cost of financing and obtain an increase.
Professional collateral management can be included depending on the facility type and the lender.
Real-time, online interactive reporting is often available.
It may provide the business with access to more capital.
It’s flexible – financing ebbs and flows with the business’ needs.
It’s important to note that there are some circumstances in which equity is a viable and attractive financing solution. This is especially true in cases of business expansion and acquisition and new product launches – these are capital needs that are not generally well suited to debt financing. However, equity is not usually the appropriate financing solution to solve a working capital problem or help plug a cash-flow gap.
A Precious Commodity
Remember that business equity is a precious commodity that should only be considered under the right circumstances and at the right time. When equity financing is sought, ideally this should be done at a time when the company has good growth prospects and a significant cash need for this growth. Ideally, majority ownership (and thus, absolute control) should remain with the company founder(s).
Alternative financing solutions like factoring, A/R financing and ABL can provide the working capital boost many cash-strapped businesses that don’t qualify for bank financing need – without diluting ownership and possibly giving up business control at an inopportune time for the owner. If and when these companies become bankable later, it’s often an easy transition to a traditional bank line of credit. Your banker may be able to refer you to a commercial finance company that can offer the right type of alternative financing solution for your particular situation.
Taking the time to understand all the different financing options available to your business, and the pros and cons of each, is the best way to make sure you choose the best option for your business. The use of alternative financing can help your company grow without diluting your ownership. After all, it’s your business – shouldn’t you keep as much of it as possible?