Pros and Cons of Outsourcing Customer Service
[Updated June 21, 2022]
What is customer service?
Customer service is the support that brands offer to customers throughout the customer lifecycle and encompasses an overall approach to building relationships and establishing customer loyalty. This transactional approach provides helpful solutions and guidance during the buyer’s journey.
What is outsourced customer service for enterprises?
For businesses, outsourcing customer service is not about cutting corners – it’s about offering the best possible level of service to fulfill the customer service needs of your customers (at scale).
After all, it’s the positive experiences that drive loyalty, gain fans, and improve overall brand reputation.
There are ways to outsource without sacrificing the customer experience, though the risk to quality is a big concern among companies that are in the decision-making process. Let us help take the confusion out of this process!
Outsourced customer service means that an enterprise is utilizing a third-party provider and makes use of their agents (or AI-powered chatbots) to handle inbound and outbound calls and non-verbal communication with customers. In most cases, Customer Service/Support Outsourcing teams are part of a call center service.
How to outsource customer service
The correct way to outsource customer service is to be open to assessing new and innovative vendors and service providers. And we’re not just thinking along the lines of domestic and offshore.
Many people believe that overseas call centers and Business Process Outsourcers (BPOs) are the only staffing option when it comes to outsourcing… whether you’re an enterprise brand or a startup company.
In fact, today, innovative domestic companies are sharpening their competitive edge with non-traditional approaches to staffing customer service (such as concierge service, on-demand experts, and NOW CX).
It’s critical (and logical) to choose a partner that understands the demands of the NOW Customer and wants to help you grow the business, not just maintain the status quo.
In your search, you’ll find that many vendors are stuck in how they think about customer service (like charging extra for “after hours” coverage. Don’t they know most web browsing and online sales happen in the evening and at night?!). Be diligent in your search — your customers are at stake!
Why outsource customer service?
“Customer Support as a Service” is a type of customer service outsourcing platform that’s scalable, and has no significant upfront investment or minimum volume requirements. This applies to both inbound and outbound customer support.
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 ecommerce brands (and their customers) demand this level of integration and familiarity. Marketing campaigns can even be built around outstanding support if you offer it.
Outsourced Customer Service Representative Pros and Cons
This article will outline the more important pros and cons of outsourcing customer service and how to ensure your company culture and consumer behavior aren’t negatively affected.
Having a surge of new customers and increased interest in your business is a great problem to have for management and stakeholders.
However, as your voicemail fills up, emails go unanswered, and live chats go unstaffed, you’re missing opportunities to convert website visitors, increase revenue, and grow the business. If your internal CX team is feeling the stretch (especially during a holiday season), this article is for you!
The disruptors in this space are each geared towards different industries, but the common theme is in addressing the outsourceable issues unique to each enterprise 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 and favorable price points, there are plenty of cons, and it’s important to weigh the advantages and benefits of outsourcing customer service. How your staff or vendors treat your customers is ultimately the factor that will make or break the business, regardless if you have significant market share or if your products are just starting to take off.
Let’s take a look at this guide on the biggest pros and cons of outsourcing customer support and why business leaders and entrepreneurs choose this route (and why they don’t).
Pros of Outsourcing Customer Service
The benefits of outsourcing customer service are:
- The cost savings
- More coverage, 24/7/365
- More language options
- Less headaches, growing pains and project management
- Potentially shorter response times
- Better technology, equipment and resources
- The cost savings.
There’s no predicting the unpredictable. Or accurately forecasting for variable demand. So the only option is to invest the time and money necessary to hire and train while struggling to stem high attrition rates.
And still, you get it wrong more than you get it right. It’s a frustrating and recurring mistake. 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 in the office (or at home) and paying them salary and overtime during busy seasons (up to 60%). Businesses that outsource customer support teams can see financial relief in utilization, SG&A, software licensing 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.
Choosing outsourcing gives you the opportunity to “outservice” your competitors by offering extended after-hour and weekend support on all channels including online chat/instant messaging, email and social media DMs. This is the reason that in the era of the NOW Customer, 24/7 coverage is no longer a nice-to-have, but a necessity. We have the data to back this claim up. For established players in an industry, your increased share of wallet will thank you.
- More language options.
Companies that outsource customer service to another country 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. Then bask in the result!
- Less headache.
For many, the opportunity to have multichannel coverage in multiple languages without having to manage it all is worth more than the basic cost benefits. Machine learning and AI-powered contact center software make handling these channels all at the same time significantly easier than ever before.
- 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” and a higher number of available agents means a significant reduction in response times, which is the main driver of customer success and satisfaction (and also don’t forget fewer bad reviews online). An eCommerce store can have the nicest graphics and the cheapest prices, but still lose an incredible amount of sales if the CX is poor.
- Better technology and resources.
In linking up with a customer service outsourcer or contact center, you’re getting access to the latest technology (such as enterprise software and computer/server programs, creation of secure data warehousing, VPNs, modern computing terminals and networking hardware, finely-honed chatbot setups, among others) that may not be in your budget for a build-out.
Bottom-line: Infrastructure and software maintenance (not to mention security) are not cheap once you grow past a certain size.
Cons of Outsourcing Customer Service
The cons of outsourcing customer service are:
- Disconnection from brand
- Rigid call center contracts
- Quality of customer care
- Disconnection from brand
Traditional outsourcers and their agents may not consider your company’s overarching strategy and brand when handling requests. Being in a different location or country doesn’t help. It’s important that an outsourcer be a strategic partner and not just an order taker (or worse, a complaint taker). This is the foundation of trust for this business. Getting a referral and first-hand experience from an existing customer is an ideal conversation to have when vetting call centers, especially when vetting internationally.
Resolutions with a positive experience for all user personas (i.e., real customers) are the key, not the number of closed tickets. Continually verifying and validating that the service that’s being delivered not only is thoughtful but meets the requirements is something that cannot be avoided. Web analytics and CRMs might not show all of this health information and other means of tracking such as consumer surveys need to be utilized.
A database of interaction and customer happiness (such as CSAT scores or Net Promoter Scores, or consumer complaints) needs to be monitored at a minimum, as well as ensuring that agreed-upon knowledge base and an up-to-date version of the product/company tutorials are being followed by the agents.
- Rigid call center contracts.
At the end of the day, outsourcing customer service can be cost-beneficial. However, most deals require long-term contacts and minimum requirements, which hampers flexibility and can become a financial burden (and headache). In 2021, businesses know better than to lock themselves into terms and conditions that don’t favor them amid uncertain times and economics. Vendors in India and other offshore hotspots are getting better at this, but most still have some head-scratching legal clauses in their contracts.
- The quality of customer care.
What an outsourcing call center considers “good” customer care may not align with your company’s core values and policies. 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. Not all agents in a call center will be as good as in-house employees, but some will be even better! Especially in B2B businesses.
Users/visitors (i.e., future customers) can be very picky depending on their expectations so this needs to be considered when training up a vendor. Certain industries are more sensitive to this while others (like banking) are less sensitive due to conditioning. Try to talk with a senior executive at your customer service outsourcing company of choice, perhaps even the founder, and figure out what their company is all about and if their way of doing business is to your liking.
Simplr offers the best of both worlds
Simplr offers companies like YETI, Steve Madden, Mack Weldon, and Princess Polly a human-first, machine-enabled customer experience solution that meets the demands of the NOW Customer in an omnichannel world.
Offering a combination of a uniquely talented, flexible, and scalable Human Cloud, AI-based technology, and actionable intelligence, Simplr is a leader in empowering companies to immediately expand their customer service capacity and engage customers with speed, empathy, and precision. Regardless if they’re DTC brands, financial firms or even manufacturing companies that sell direct, scaling social selling has never been easier.
With Simplr’s NOW CX solution, premium brands are eradicating customer neglect, turning browsers into buyers, and turning customers into fans. Simplr is funded by Asurion, which continues to support its growth.
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