The service sector has grown exponentially in recent years. High-quality customer care is a key factor in helping businesses retain their customer base. This is why deciding whether or not to outsource your customer service has become an even tougher decision.
One may argue that such a move may lead to a considerable decrease in service quality. Others may say that this is a simple way to cut the costs of customer services and improve profitability.
We will leave the final decision to you. But we are inviting you to read our article. We have gathered enough materials to show you both sides of the same coin. You should find it useful when you face the question of whether outsourcing customer service is a path to go.
What is call center outsourcing?
Call center outsourcing is, quite simply, when a business decides to delegate the work of a call center to an entity outside of their company rather than establishing an internal call center department.
Over the years, various industries benefited from call center services, for example:
- IT and telecommunication,
- travel and tourism, as well as,
- banking, finance, and insurance sectors.
The call center outsourcing specialization is still on the wave of growth. According to Technavio, the industry was expected to grow by 3% during the 2019-2023 period. The growth trend of outsourcing customer service is especially visible in North America.
On the other hand, Gartner’s research shows that 26% of service leaders are planning investments in digital channels. They treat it as another way to optimize customer service costs. What is the right way to go then?
The truth is that both options may be profitable and even work together.
When does outsourcing customer service make sense, then?
When you run a small business, you might have to handle the incoming client questions. You may even provide high-quality customer service. But, you will face questions about call center outsourcing when the company will scale up. Then, you will have more headaches with the rising costs of hiring professionals or you will struggle to find them at all. Because of that, you can experience problems with the response time.
At first, call center outsourcing sounds like a cure for your problems. But not for everyone.
Some companies should stay with in-house customer service. Why? Because in some industries, quality matters as nothing else. This is particularly crucial for businesses that need to keep high loyalty rates. In this case, the result of call center outsourcing could cause even a drop in the number of clients. Then, a better idea is to develop in-house teams and invest in technologies.
To clear this up, we have prepared a short guideline when you should consider this option. Treat is as a brief introduction to the subject.
Pros & cons of outsourcing customer service
Each form of outsourcing is a bit flawed but it doesn’t have to mean that it won’t be valuable for you. This is why we have created a list of the most common pros and cons of outsourcing customer service. We wanted to give you an idea of what you may expect if you would decide to start or not such cooperation.
Pros of outsourcing customer service
#1 Money-saving may please you
Outsourcing customer service may turn out to be cost-effective. Especially, if your customer base has grown to a high level and customer service eats up a great part of the company’s profits.
Sometimes, further investments in infrastructure, labour, and training costs don’t justify its value. If not, trying out the cooperation with the outsourcing company is worthwhile.
To check whether it would be beneficial, you need to do some easy math. Count all average wages of customer service specialists, team leaders, and managers as well. Add to it the cost of infrastructure and technology to enable their work, for instance, call center software. Then compare this cost with the average outsourcing company pricing.
#2 Helpful in growing internationally
Call center outsourcing companies are usually ready for delivering services in various languages. This may work for your benefit. Especially, if your product or service is sold internationally or you don’t keep up with hiring new customer support workers.
Moreover, call center professionals speaking the local language create a good image of the company in the customer’s eyes. Just remember that whether you use an agency or freelancers, you need to know how to pay overseas employees. Do the relevant research and ensure you’re not breaking any laws.
#3 Time-saving option for you
Hiring in-house support workers takes time. Further training as well. They need to learn more about products or services, customer service standards. External workers should also be familiar with best practices in problem-solving.
Searching for a reliable and professional contact center is time-consuming, too. But once you find the right partner, the worries about recruitment and planning training sessions will disappear. Of course, you will have to plan initial training for the company outsourcing customer service. But still, you will save hours of your work.
#4 24/7 support to make your client satisfied
Countless on-demand services appearing on the market generated more expectations towards service delivery. Customers got used to being supported everywhere and all the time. This forces businesses, both offline and online, to ensure 24/7 customer service. Not only because they are afraid of lower customer satisfaction rates.
They worry about possible PR problems as well. Today, everyone is a reviewer and has access to powerful social media. There, bad publicity is created easily and shared as fast as never before.
#5 Immediate support
You should expect from a customer service outsourcing company that they will deliver a fast response to the client’s problems.
As a result, your client won’t end up waiting half an hour for the opportunity to talk with a customer service representative. This causes less frustration and leaves the client with a better experience.
Flexibility is a must, especially if you work in a fast-changing business environment. Any fluctuation in the client database may require fewer or more calls to be handled by the customer service team. To turn it into your benefit, you may swiftly adjust the agreement with the customer service contractor and save a few pennies.
Cons of outsourcing customer service
#1 Language and cultural barriers
Some call center outsourcing companies boast of fluently speaking customer service agents to hire. But better to check those skills before making a final decision about the cooperation.
You can add to it cultural barriers resulting in communication failures. They are quite easy to make in certain countries. This is related to different values and generally acknowledged norms in different countries. As a result, the agent may not understand the client’s problems or unintentionally be perceived as rude.
#2 Product knowledge issues
Keeping up with the latest changes in the product or service offer is easier for the in-house employees who receive fresh updates on product development. They are simply soaked with the product or service knowledge.
For the call center outsourcing workers, your product is one of a few similar ones. There is also a risk that they will have outdated knowledge or will be missing some information.
#3 Limited problem solving
Non-standard problem solving is almost impossible if you decide on outsourcing customer service. The workers will follow the procedures provided by you and there is a tiny chance that they will try to think out-of-the-box.
Handling basic customer inquiries shouldn’t be a problem for the external agency. But what about complex questions requiring technical skills? This may lead to a situation when the inquiry finally will come back to the internal team. You may also imagine how such a case could affect the response time and the client’s experience.
#4 Fewer customer insights
Conversations with clients are a treasure trove of insights. By hiring customer service outsourcing workers you may simply lose this free and precious knowledge.
Access to messages and call recordings is invaluable in discovering some patterns. You may discover similar problems and questions and leverage them to improve the product. This could be also utilized to create better online support with common questions explained.
#5 Customer satisfaction might be neglected
What if your company’s culture is highly customer-oriented? And the support plays a vital role in the whole business? You should keep in mind that this is unlikely that the outsourced service agent will engage as much as the in-house worker.
#6 Clients satisfaction is staff satisfaction
You might be unaware of the working conditions at the outsourcing company. What if their wages are poor? What if the working atmosphere between managers and support agents is tense? All these factors impact worker satisfaction and lower engagement in the service.
Call center outsourcing: best practices
If you do decide to outsource your call center services, here are a few best practices to keep in mind when getting started.
Find flexible providers: There are plenty of options out there when it comes to companies that specialize in outsourced call center work. You want to make sure that the one you choose has a proven track record of flexibility, and is generally easy to work with.
Keep critical concerns in-house: At the end of the day, your company will be responsibility for the success or failure of your customer service efforts. Frankly, your customer's will not make any distinction between your company and the people conducting your outsourced call center work when writing a bad review for poor service. For this reason above all, it is necessary to make all of the big, business-critical decisions about customer service in house.
Define procedures in detail: You and your colleagues know more about your company and its values than anybody else. When you decide to outsource important responsibilites like customer service to another company, it's crucial that you provide to them a detailed account of your company's priorities, procedures and values.
Make customer satisfaction your top priority: Your customers are the lifeblood of your business. Take special care that they're satisfied, especially when your customer service work is being done by an external entity. We recommend conducting regular audits of the quality of the customer service being provided by your external partners. One way to conduct such an audit is to send out a suvey via email to your customers about the quality of the their customer service expereince.
The bottom line
The debate about the pros and cons of outsourcing customer service could take hours. However, between the advantages and disadvantages is your business. It may be of small or large size, be a specific industry or not or have different objectives than another company.
That is why the final decision is in your hands. Don’t try to find the easy answer - outsource or not. Take your time to analyze the pros and cons of outsourcing customer service.
Check all the possibilities, even partial outsourcing of customer service functions. Check also other options, including call center software like CloudTalk, which can easily help you organize customer service processes and collect more data once you’re at it.
Then, verify your assumptions even while working with the call center services provider and draw your own conclusions.
To not leave you without a quick-fix, here's homework for you. Check how your business objectives are applying to the list presented above. It should bring you much closer to the actual decision than you might think. Good luck!