Pros and Cons of Outsourcing Customer Service
[Updated February 07, 2021]
Outsourcing customer service is not necessarily about cutting corners – it’s about doing your best to fulfill the customer service needs of your customers, and to leave them with a positive experience.
Having a surge of new customers and increased interest in your business is a great problem to have. However, as your voicemail fills up, emails go unanswered, and no one is managing all the live chat inquiries – you’re missing opportunities to capitalize on demand and grow your business.
One of the pros of outsourcing customer service today is that the old-school offshore call centers and BPOs that have garnered a bad reputation are on their way out and are being replaced by more niche-specific US-based companies that are staffed with actual specialists. Most modern retailers and ecommerce brands (and their customers) demand this level of integration and familiarity.
This new approach is sometimes referred to as Customer Support as a Service, with the word ‘Service’ implying that these solutions are scalable and with no significant upfront investment or minimum volume requirements.
The disruptors in this space are each geared towards different industries, but the common theme is in addressing the outsourceable issues unique to each business while allowing in-house staff to handle the unique, high-value and low-volume inquiries that only they can (and should) answer.
Even with these new outsourcing options, there are plenty of cons, and it’s important to weigh the advantages and disadvantages. The way you treat your customers is ultimately the factor that will make or break the business, especially if you’re a niche retailer or an SMB.
Let’s take a look at the biggest pros and cons of outsourcing customer support and why entrepreneurs and business owners choose this route (and why they don’t).
PROS of Outsourcing Customer Service
- It saves money. There’s no predicting the unpredictable. Or accurately forecasting for variable demand. So the only option is to invest the time and money necessary hire and train while struggling to stem high attrition rates. And still, you get it wrong more than you get it right. It’s frustrating. Your company and your customers deserve better. So do you. Many companies have realized that outsourcing customer service is often a less expensive alternative to hiring full-time customer service staff and paying them overtime during busy seasons (up to 60%). Business that outsource customer service can see financial relief in utilization, SG&A, and the costs of agent attrition. Additionally, an outsourcer can offer flexible and affordable staffing options, including a price structure that charges per resolution, not per hour.
- More coverage. Outsourcing gives you the opportunity to “outservice” your competitors by offering extended after-hour and weekend support.
- More language options. Companies that outsource customer service can broaden their customer base by adding more language options than just English. This is a perk that you will not have to manage. Just make sure to advertise this benefit so potential customers know about it.
- Less headache. For many, the opportunity to have full coverage in multiple languages without having to manage it all is worth more than the basic cost benefits.
- Potentially shorter response times. 51% of customers will never again do business with a company that neglects them just one time. That’s a pretty high bar to get over. But if they’re shopping and you’re not available to answer questions, then your potential fans become someone else’s customers. Talk about CX being a cost center! Limiting hours or channels is no way to go through life. More hands on deck means a significant reduction in response times, which is a main driver of customer satisfaction (and also don’t forget fewer bad reviews online).
- Better technology and resources. In linking up with a customer service outsourcer or contact center, you’re getting access to the latest technology and a pool of resources you might not otherwise been able to invest in.
Cons of Outsourcing Customer Service
- Disconnection from brand and strategy. Traditional outsourcers may not consider your company’s overarching strategy and brand when handling requests. It’s important that an outsourcer be a strategic partner and not just an order taker (or worse, a complaint taker) Resolutions with a positive experience are the key, not the closed tickets.
- Rigid contracts. At the end of the day, outsourcing customer service can be cost beneficial. However, most require long-term contacts and minimum requirements, which hampers flexibility and can become a financial burden (and headache).
- The quality of customer care. What an outsourcing company considers “good” customer care may not align with your company’s definition. This disadvantage can be alleviated if your outsourcer is a strategic partner who is invested in your company’s mission and commitment to good service.
However, there’s a way where you might be able to get the best of both worlds. Simplr staffs razor-sharp 24/7 US-based (human) customer service specialists and is 40-60% more cost effective than in-house operations, and offers the scalability and affordability without jeopardizing a client’s brand or business strategy.
Through e-commerce specific models and machine learning, Simplr Specialists can quickly find the right answer while mimicking the tone of in-house agents for 60-80% of a company’s inbound customer questions. In addition, our Simplr Specialists are screened specifically for inbound inquiries and systems for high-growth companies with a focus on key verticals like fashion/apparel, food, beauty and personal goods, consumer electronics and/or home goods.
A recent review of our CS solution:
“Outsourcing something that’s so close to your brand is always going to make you nervous, but outsourcing with Simplr provides flexibility that a company like ours just doesn’t have.”
Reviewer: Summer Bridwell
Senior Customer Experience Manager at Tecovas
5 out of 5 stars