Pros and Cons of Outsourcing Customer Service
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 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 run AI-powered software and are staffed with more specialized agents.
This new approach is sometimes referred to as Customer Support as a Service, with the word ‘Service’ meaning that these solutions are fully scalable and with no upfront investment or minimum volume requirements.
Most of these disruptors in the space are geared specifically towards certain industries, and they handle specific “outsourceable” issues while allowing businesses to handle the unique and lower-volume inquiries they’d rather answer themselves in-house anyway.
Even with these new outsourcing options, there are plenty of cons, and it’s important to weigh the advantages and disadvantages because at the end of the day, the way you treat your customers will make or break your business, especially if you’re a startup or 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. 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. (This cost-saving calculator can tell if outsourcing customer service is a good financial fit for your business.)
- 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. More hands on deck means a significant reduction in response times, which is a main driver of customer satisfaction (and fewer bad reviews online).
- Better technology and resources. In linking up with a customer service outsourcer, 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.
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