Industry analysts ContactBabel says one in seven customers who used an offshore centre responded by changing supplier.
The report, "Finding the balance: the effect of offshore customer contact on profit and brand", claims that UK businesses are using the offshore call centre industry in a cost-obsessed and unimaginative way that is severely hurting their brands.
The report, which analysed a survey of 1,008 UK adults in February 2004, found that 14.2% of the UK public changed their supplier as a result of using an offshore contact centre.
Out of those who personally experienced offshore customer contact, 74% said they felt more negatively towards the company than before. UK telecoms and insurance companies experienced the greatest levels of offshore-related customer resentment, with Scottish consumers the most likely Britons to change supplier because of an offshore service.
The survey also found that those who experienced offshore contact were also four-and-a-half times more likely to change their supplier than customers who had no direct experience of offshoring.
ContactBabel said that a typical high street bank would save £9.26m a year in operating costs by replacing 1,000 UK agents with the same number in India. However, if only an extra 0.343% of customers defected in protest, the bank's revenues would be reduced by the same amount. Last year, 1.09% of UK banking customers changed banks as a direct result of customer service offshoring.
Steve Morell, principal analyst at ContactBabel, claimed that offshore contact centres could have a valuable role to play. "The offshore contact centre industry can help solve issues that the UK industry has, such as finding staff for evening and weekend working, providing promptly to emails and reducing queuing times," he said.
"However, too many companies are using offshore contact centres in an unimaginative and cost-obsessed way that is alienating their customers and not playing to the potential strengths offshore. Offshore centres are a piece of the jigsaw, not the whole puzzle," he concluded.
This month, it was also reported that call centres will have to consult their customers, workers and trade unions before deciding whether to move jobs overseas, according to a government report.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .