We launched sourcingfocus.com in April with a consumer survey that revealed for the first time the full of extent of people's dissatisfaction with offshore customer service. In all parts of the country and across all social groups, offshore contact centres languished in single-digit approval rates, in some cases as low as one percent. That story made the national and international news.

Now two US academics have piled pelion on ossa for the outsourcing industry with bad news from the other side of the Atlantic. In a rigourous, eight-year study they found that enterprises that outsource front-office work, or locate customer services offshore, may save on labour, but will pay a high price in terms of unhappy customers.

Researchers from Michigan University found that offshoring and domestic outsourcing of front-office functions both result in customer satisfaction declines that represent a drop of one to five percent in a firm's market capitalisation , depending on the industry.

However, when it comes to offshoring back-office functions, such as IT, human resources, and finance and accounting, they found found no decline in customer satisfaction with the enterprises concerned. No surprise there, perhaps.

Rather than talk to customers as we did, MS Krishnan, professor of business information technology at Michigan University's Stephen M Ross School of Business, and colleagues Claes Fornell of the Ross School and Jonathan Whitaker of the University of Richmond, analysed the offshoring and outsourcing activities of 150 US enterprises between 1998 and 2006,together with some 50,000 news reports on firms' offshoring and outsourcing activities.

"Firms may have a limited and short-term perspective in their initial decision to outsource – onshore or offshore – based on internal business process performance," said Krishnan. "Our research enables firms to account for customer perceptions in making their decision, and facilitates a more a comprehensive approach to the decision process for offshoring and outsourcing."

So how to redress the balance? As a starting point, firms should invest some of the savings from offshoring to serve customers they previously could not afford to serve, said Krishnan, or to provide additional services to current customers. As a next step, he said, enterprises can use offshoring to access additional innovation in the marketplace for global resources and pass these innovations on to their customers.

So there you have it: from both the customer and enterprise perspective, front-office outsourcing and offshoring are not initiatives that should ever be entered into lightly, or merely to reduce cost.

Customer relationships pay the bills, and so before making that strategic move – or facilitating it for your own customers – consider both your customer experience, and your shareholders or stakeholders.