Offering top-notch customer service is a game-changer for any business. This means that if you offer welcoming and knowledgeable help, it will increase customer satisfaction, incite positive word-of-mouth recommendations, and lead to repeated loyalty.
According to research, 89% of customers become repeat buyers after receiving exceptional service, and businesses willing to deliver great support may find shoppers are willing to spend up to 17% more. Poor customer service, conversely, can cause serious reputational and financial damage.
Nevertheless, when your business expands and starts requiring more customer service, you might find it hard to keep up. Cases where customers can reach out are numerous and they include things like email addresses, chatbots, social media platforms such as Facebook, or even traditional phone calls.
It may seem like an uphill task to manage all these channels simultaneously.
Sometimes you may make mistakes due to the increased number of customer inquiries. If consumers are not happy with your product or services, they tend to narrate their experiences on social media pages, making everybody aware of what happened.
But why does good customer service matter?
According to PCW, 73% of consumers say their buying decisions are influenced by customer experience. And this means that poor service can have an adverse effect on your profits and your image.
Then how do you manage this?
Outsourcing your customer care could be one way out of this. If you’re facing all these problems, it’s time to outsource your customer support and in fact, customer support is widely outsourced across the globe.
Let us explore some pros and cons of this method; however, first, we need to know ‘what is customer service outsourcing’.
What is Customer Service Outsourcing?
When you are overwhelmed with work and do not have the means, time, or budget to manage all customer communications, outsourcing may be a solution. This involves engaging an independent company with a major focus on client assistance, whereby they will use their people and assets instead of yours.
Customer service outsourcing is the practice of contracting with a third party to manage customer service rather than doing it internally. Businesses do this to save money, offer 24/7 service, or provide support in multiple languages.
Here are some common tasks you can outsource:
- Answering, logging, and making phone calls
- Dealing with queries, solving problems, and redirecting complex issues
- Processing sales orders, returns, and refunds
- Encouraging customers to buy extra products
- Reviewing complaints to spot patterns and come up with solutions
- Keeping systems and databases up to date
Moreover, these companies are capable of handling an increase in demand without any strain at all. Modern providers operate omni-channel (voice, e-mail, chat, social, WhatsApp) and use AI chatbots as a co-pilot for simple inquiries, cutting first-response time by up to 70 %.
Various Categories for Customer Service
There are many types of customer service, and the one you choose will depend on your needs. Let’s take a look at some of them.
In-House Team
An in-house team is one that you directly employ. They work within your business and get special training from you. Hence, they have deep familiarity with your goods, an excellent understanding of your organization’s culture, and direct relationships to other departments. Organizations with highly integrated in-house customer support teams tend to see approximately 20 % higher customer satisfaction scores, while the fully loaded cost per call averages $7–$9 depending on context.
Internal Team
Though similar to an in-house team, internal teams represent employees who don’t predominantly serve as customers but occasionally interact with them. For instance, complex queries can be handled by your technical staff or post-sale inquiries could be responded to by the sales force.
An external or outsourced team
These kinds of teams work solely for you as a company but independently from the main organizational structure. You do not oversee their daily activities. This is good for taking care of specialized tasks when you have limited manpower capacity so that you concentrate on functions such as marketing, design, and sales while outsourcing customer service to outside agents.
Outsourcing can deliver 40–60 % cost savings, with total seat cost for near-shore support around $28k annually versus $72.7k in-house. It also tends to exceed performance benchmarks: FCR ≥ 90 %, 12 % lower handle times, and CSAT lifts of 0.3–0.5 points within six months.
Contact Center Services
The services of a contact center are focused on handling different communication channels like phone calls, emails, and webchats. As opposed to an exclusive group, they can be used by more than one enterprise at the same time.
Such centers provide omnichannel support so that customers can use their preferred means, such as social media or webchat.
In fact, research shows that 73% of consumers prefer completing purchases across multiple channels.
90% find personalized experiences appealing; 80 % are more likely to engage with brands providing them.
Companies with an omnichannel strategy see a 91 % year-over-year increase in retention.
Pros of Outsourcing Customer Service
Small businesses benefit significantly from outsourcing customer service. The following are some of the important benefits:
Reduced costs
Saving money is among the top reasons why businesses prefer to outsource their customer service operations. Instead of running an in-house team, you will pay for services according to what has been done (e.g., per-call rates or hours).
For instance, outsourcing a call center can save you money on office rent, equipment, maintenance, and the costs of hiring and training agents. When compared to keeping an internal staff, outsourcing can cut operating costs by as much as 40–60%.
Additionally, the average fully loaded cost of one U.S.-based in-house agent is roughly $4,500 per month, whereas an offshore outsourced agent runs only $1,000–$2,000 per month, a difference that can slash support budgets by 40–70 % almost immediately.
Flexibility in pricing by various companies has made outsourcing customers’ service needs available even for small scale businesses. Many outsourcing models now use pay-as-you-go pricing, which allows businesses to scale support up or down 60% faster than hiring internally.
Wider Coverage
In today’s business world, having 24/7 customer support feels essential, especially for larger companies. However, it may be costly and challenging to hire and train staff around the clock for such a service. By tapping into professionals in different time zones, outsourcing offshore provides an answer.
Moreover, for companies operating internationally, hiring a local call center can be more practical than trying to train an in-house team in multiple languages. The broader your reach, the greater the ability you have to satisfy customer needs.
Reduced workload:
Outsourcing customer service lightens your workload. In small businesses, everyone often has multiple roles. Handling customer calls and emails takes away time from more profitable tasks like making sales. By outsourcing customer service, you and your team can reclaim that time to concentrate on growing sales.
A HubSpot report found that businesses that outsource their customer service see a 32% increase in productivity across other departments, freeing your internal team to focus on growth tasks.
Access to specialized expertise
Outsourcing to BPOs provides access to specialized skills and experience, which can reduce the need for in-house recruitment. In addition, dealing with a seasoned BPO could help these areas appreciate faster.
For example, if you would require multilingual support services, going for outsourcing would be cost-effective. BPOs offer multilingual teams covering widely spoken languages like English (1.53 billion speakers), Mandarin, Spanish, French, German, Arabic, Japanese, and more. This access enables culturally relevant, high-quality support without the overhead of training a diverse in-house workforce.
Another scenario is when artificial intelligence-based chatbots are deployed for customer service. By leveraging BPOs’ AI-enhanced systems, businesses can achieve full ROI within 12–18 months, and integrating AI shortens that payback period by approximately 30 %.
Moreover, partnering with a business process outsourcing company (BPO) may bring higher returns on investment (ROI) and faster outcomes from outbound calls that are directed toward increasing sales or customer referrals, especially if your company lacks the infrastructure or training for managing outbound calls internally.
For example, outsourcing outbound call services can increase efficiency and impact on the bottom line by producing 50% more sales-ready leads at 33% lower cost per lead.
Improved Technology Solutions
Setting up and maintaining technology for a top-notch customer service department can be costly and time-consuming. It may not be possible for smaller or start-up businesses to invest heavily in these resources.
Customers are provided with many channels that allow them to reach out to brands, leading to more effective communication.
It’s unacceptable not to keep pace with clients who want various methods of communication like phone calls, emails, chatbots, social media, WhatsApp, or SMS, among other platforms. Customer experience research shows most customers expect agents to have full context across channels, so omnichannel support is increasingly essential.
Outsourcing provides access to third-party providers who have already invested in the necessary hardware and software.
Overcoming Staffing Problems
Being in charge of groups of people and making them feel like they belong somewhere that needs attention is very gratifying. However, it takes a lot of time, and energy too. It may be more feasible to delegate such work if managing a group doesn’t directly relate to your primary product.
Outsourcing customer service lets you stay in control of your team choices while skipping the hassle of handling things like hiring new staff or training them. In fact, it eliminates hiring and onboarding burdens. In high cost-of-living regions, businesses can save 30–50% on salaries and benefits alone, thanks to leveraging offshore or nearshore staffing.
Cons of Outsourcing Customer Services:
Just like anything else, outsourcing comes with its own set of challenges. Here are a few you should know about:
Less quality control:
Just think about your company as a well-functioning machine; for it to work perfectly, all its parts should meet some standards. When you outsource, especially something as important as customer service, these standards become hard to maintain.
Your company’s reputation is greatly influenced by the quality of customer service provided. A single negative experience may stay forever in the memory of people and ruin everything you’ve achieved. Without direct control, maintaining the quality of these interactions becomes challenging.
Limited Knowledge of Your Company
Outsourced customer service reps might not know your company, products, and services as well as an in-house team. They aren’t working side-by-side with you daily, so they miss out on the insider knowledge.
To tackle this, keep communication clear and consistent. Regularly update your outsourced team about new product launches, price changes, policies, and more. For better results, consider hiring dedicated agents who focus solely on your business and learn its ins and outs.
Concerns About Security
Outsourcing customer service means sharing your data, and most countries have strict data protection laws, so it makes sense that a lot of people worry when they outsource their customer service to other countries.
You might need to set up remote desktops for onboarding or give access to internal databases, adding several layers of security to manage.
While most outsourcing companies will provide insurance and agreements to limit your liability, your company will still be held responsible if there’s a data breach. This makes it crucial to ensure any third-party company has strong security protocols and complies with the data protection laws of the countries you operate in.
Reduced Customer Satisfaction
The outsourcing of customer services can affect the rapport you had built with your clients. This will be felt by long-time customers through communication style change that may not please them.
To deal with this, offer scripts, communication guidelines and company standards to maintain your brand’s voice. Still, the use of satisfaction surveys can help to keep an eye on how well the outsourced team is doing.
Final Thoughts
Outsourcing customer service can be a smart move for many businesses if done right. Research thoroughly and choose the right company to partner with. Make sure to match your needs with the services they offer to ensure it’s the best fit for your business.