FatCow Shuns Trend Toward Offshoring

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FatCow Shuns Trend Toward Offshoring
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Jeff Sanford, theWHIR.com
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May 5, 2004 — (WEB HOST INDUSTRY REVIEW) — This past February, when US economists engaged in their monthly speculation
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about the upcoming employment stats, they seemed to be in general agreement
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the numbers would be strong.
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And why not? The economy was growing out of its post-bubble bust and the
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historical pattern for economic recovery has been new job creation at a
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rate of 250,000 during a recovery.
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But when the report finally appeared jaws dropped: it indicated that just
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21,000 new jobs had been created, this in an economy of over 300 million
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people, and far less than the 125,000 expected.
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As the alarm was raised over the possibility that some new job-killing
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malady was stalking the US economy fingers pointed quickly to offshore
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outsourcing-the practice of hiring English-speaking Pakistani and Indian
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nationals to do work at a fraction of the price as that demanded by North
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Americans.
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A furious national debate has followed, with many big-name technology CEOs
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talking up the practice, arguing that the future competitiveness of
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US-based corporations depends on their ability to compete on the price of
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labor against foreign rivals.
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But while that is certainly a concern, another tech CEO, Jackie Fewell of Albuquerque-based hosting firm FatCow Hosting (fatcow.com), recently weighed into the
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offshoring debate with an interesting and practical argument of her own -
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offshoring vital services such as customer contact will ultimately
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disadvantage a company by severing the most direct link management has to
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its customers.
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“One of the most fundamental aspects of FatCow and its success is the high
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value we place on our interaction with our customers. The idea of turning
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that over and putting it in someone else’s hands is incomprehensible to
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us,” says Fewell.
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More than fifty percent of sales at FatCow come from referrals, which
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suggests that customer service is one of the company’s most effective
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branding irons. FatCow would have to spend more on other marketing areas to make up
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for the decline in sales through other channels, giving lie to the argument
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that offshoring always saves money.
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“In the short term, outsourcing may cut operating costs and create revenue,
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but I’m not sure it ultimately produces the savings you’re looking for,”
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says Fewell. “In our business we get feedback from our customers on an hour
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to hour basis. To remove ourselves from that interaction would just be very
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unhealthy for us.”
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But couldn’t the outsourcer be contracted to perform that kind of work as
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well? Perhaps, says Peter Zeismann, a vice president with FatCow, but it
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would be almost impossible to describe and request (let alone put a price
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on) the sort of specific menu of services FatCow is talking about.
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“These are ultimately intangibles,” says Zeismann, “so there is no way to
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actually expect an outsourcing firm to provide those cultural
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communications. For instance if we get hit with virus X we have to have
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immediate communication with our customer service reps. If we’re twelve,
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fourteen hours behind how can we expect an outsource firm to do that?”
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Fewell, agrees, “I think it would lose something in the translation, and I
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don’t mean that literally, I just don’t think you would get the same level
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of commitment and response. I don’t think someone in another company can
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care as much as we care about something we work hard to produce every day.”
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The importance of the sales and customer service at FatCow is reflected in
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the physical layout of the company, which places the customer service team
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in the center of the building. That focus on customer service has resulted
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in a dedicated clientele. Along with the strong stream of referrals, FatCow
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has developed a strong tradition of communication-not only did a recent
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customer satisfaction survey come back with a 98 percent rating, but a good
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portion of the responses came back within twelve hours.
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“I think it was because we took time develop that relationship,” says
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Fewell. “We have an advantage over our competitors because of our
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commitment to keeping it under the roof and close to us. I’d rather cut
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money in other areas because it’s a good investment.”
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theWHIR.com

About

Since 2000, The Web Host Industry Review has made a name for itself as the foremost authority of the Web hosting industry providing reliable, insightful and comprehensive news, interviews and resources to the hosting community. TheWHIR is an iNET Interactive property. For more information on iNET Interactive, visit http://www.inetinteractive.com

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