Outsourcing is the practice of sending certain job functions outside a company instead of handling them in house. It is the technique in which businesses entrust the processes of their company functions to external vendors. Outsourcing is the practice of obtaining goods and services from companies or individuals outside your business. In the old days, if you wanted to do something, then you would have to either learn it by yourself or you had to hire someone locally to do it for you.
The rise of the internet and technology has made it possible to quickly access the scales and resources you need to grow and scale your business. $62 Billion is the estimated amount that U.S. companies lose each year due to substandard customer service.
Around 300,000 jobs are outsourced by the U.S. every year. According to a report, by 2025, the global IT sourcing market will be worth $397.6 Billion. Just like every practice, outsourcing also has some major pros and cons. So, let’s dive in to know if you should consider outsourcing customer service.
Should You Consider Outsourcing Customer Service?
What is Customer Service Outsourcing?
Customer service outsourcing is when you are outsourcing the entire customer experience of your existing clients to a third party company. Customer support outsourcing can either be voice channels or non-voice channels.
Wherever your customers are, you have to meet them there with consistently robust customer service. It’s about providing an overwhelmingly positive experience to your customers.
Customer service tech companies like ‘Uber’, they go out of their way to ‘wow’ their customers and turn their angry customer into someone that becomes the voice of their brand.
Pros of Outsourcing Customer Service
1. Cost Reduction
When you are outsourcing customer service, your costs are incredibly reduced. If you are hiring people that are more expensive than the people that are located in your local area, for the quality of labor that you are getting, you are still saving a ton of money.
You don’t have to pay for the equipment or office. You can also allow them to home so that they have more productive work hours for you. There are several studies that show that outsourcing is usually a lot more cost effective, not only for the employer but also for the employee.
2. Specialization
If you get the right company that specializes in providing excellent customer service then that will be the best thing for you. Most of the third-party companies that provide customer service, they have been through many companies like yours. So, you won’t be ‘inventing the wheel’.
They would know all the best practices around implementing a help desk, ticketing system, phone systems and how to hire the best people. When you hire people that are best in their jobs, only then you can do what you do best and flourish the company.
3. Scalability
When you consider outsourcing customer service, you will get people working in different countries in different time zones and speaking different languages. All of this without any stretch on the company itself.
You have a company that specializes in recruiting people, creating a great environment to work and implementing best practices working 24/7 around the world. This provides your company to easily manage and grow your business.
Such an organizational system empowers you to focus on creating new products, explore different countries, and earn more and more customers.
4. More Experience Management
When you are focused on customer service as your main thing, you are going to end up hiring managers or customer service and technical support who are more experienced.
One of the best pros of outsourcing customer service is that you don’t have to deal with hiring the best of the best. This is because there is a highly experienced third-party company who knows how to hire the best of the best and they know what to look for.
5. Expands In Different Countries
Hiring expats and locals around the world provide you a way to bridge different cultures. That too in such a way where no culture is truly dominant except for the idea of giving high quality support in the English language.
You will benefit from hiring people with diverse cultural backgrounds in your company and having different energies. Your clients will love them because it would be easy to communicate with because they would be proficient in your language.
6. Better Structure
When you are outsourcing customer service then you already know that a third-party company has worked with a lot of companies like yours. Different companies have different structures, ticketing systems and voice over IPS systems. They have experienced all of that.
They are well aware about the standard operating procedures and escalation policies. These third-party companies bring the best recommendation on how to set up that structure which benefits you the most.
You will have an effective way of taking the customer service and technical support cases and managing them. You will not be making the mistakes that a lot of people do when setting up a system because you will have the best advice from these companies.
Cons of Outsourcing Customer Service
1. Less Control
When you outsource your customer service to another country, you have reduced insights and less direct communication.
These changes translate to less control as you have to rely on other people on the other side of the globe to keep things in order without your direct guidance.
2. Cumbersome
Outsourcing certain business processes is commonplace but when you are considering outsourcing work to a different country, it makes the process more cumbersome.
Your customer service is in the hands of a foreign company and on top of the loss of control, you may have to make a big effort to help the overseas provider adapt to your business, quality of service and other needs.
3. Communication Issues
Customer Service outsourcing comes with a risk of serious language barriers. Your customers probably won’t be happy if they have to talk to someone whose English isn’t very good.
Unfortunately, overseas customer service agents with thick accents or very limited English speaking abilities are rare. Your customers will experience a lot of frustration if they struggle to understand or be understood by all center workers.
If you outsource your customer service because you were hoping to improve customer retention, providing frustration customer service experiences isn’t going to produce the result you want.
4. Trust Issues
Aside from the fact that your customers may grow frustrated, there’s also an overall bad perception of overseas customer services. Unfortunately, over the years, many scams and spam types of phone marketing campaigns have utilized offshore call centers.
As a result their overseas operations have a negative stigma attached to them and your callers might have an inherent distrust. Additionally, it’s important to know what federal regulations affect the type of data you expect a call center to handle for you.
If you are not careful, you may breach customer confidentiality laws when you outsource to a foreign call center. Depending on the industry and the associated data, this can be a crime.
5. Less Focus
When you outsource your customer service to any third-party, you risk a loss of focus. However, in many cases outsourcing makes sense because a professional customer service center can provide omni-channel support in an efficient and affordable manner.
However, when you consider the language barriers, difference in time-zones, trust issues, lackluster support experiences and the loss of focus on your particular needs, outsourcing overseas starts to look a little less novel.
6. Reduces Jobs
When you outsource your customer services offshore, you eliminate U.S. jobs. Eliminating jobs from the local job market has the potential to soil your company’s image while also negatively affecting the economy that your business relies on to thrive.
9 Must-Haves For Outsourcing Customer Service
1. Proper Customer Service Centre Size
Make sure that the contact center understands the escape of what you are looking for. Your program needs to be at least 3-5% of the center’s seat capacity. Pick a center that matches the quality aspect and the size aspect.
2. Solid Management Team
You have to see to it that you are comfortable with your management team. Talk to them and ask them what their backgrounds are and what type of businesses they are good at.
Visit the customer service center and start a relationship and go beyond the RFP. There’s a lot of different niche types of centers out there, so make sure that the type of program that you are looking to outsource, matches the skill set of the management team.
Find centers that are looking to find partnership because it’s difficult to have a vendor client relationship. You are looking for somebody that’s going to be an extension of a business, so the management should match what you are looking for.
3. Client Service Support
This is one of the most important aspects of your partnership. Poor client support is the number one reason why programs fail. Check the procedures and see if there’s an issue about how they go onboard.
All these centers and their management styles come to play into the different types of contact centers.
4. Associate Match
Just like there’s a lot of different contact centers, there are different demographics of associates too. So, make sure that the type of program that you are working on and the contact center that you are talking to, have the same type of demographics.
Whether it be young or old, female or male. Make sure when you start the program, there’s not a disconnect.
5. Proper Technology
This can be the number one back breaker for any type of relationship with the contact center. Make sure that the customer service center has the highest end technology that they can integrate with all of your systems.
They should be best in their telephony as they are state-of-the-art, they can do advanced routing techniques. You should be satisfied with their integrations, speech analytics, advanced telephony and API capabilities.
6. Culture Fit
Make sure that the cultures of the two organizations match with one another when it comes to customer service programs. There’s a lot of different centers that are good on support but not from a sales perspective.
Talk that through and make sure that you’re getting a culture fit so that they can really be an extension of your brand.
7. Training
Everything from how they bring on new hires, what type of processes and training do those representatives go through, how are they going to train your program, do they have an on-site trainer, will they allow you to do some of the training?
Training is an important piece of customer service. Make sure that you know all about their values and processes so that you are sure about their part of the work.
8. Security
If a customer service Centre is not PCI compliant, look somewhere else. That’s the bare minimum and there shouldn’t be an option. Everyone should be PCI compliant.
There’s other security procedures like ‘no-cellphone policy’, security cameras, biometric locks etc. Make sure that the security aspect matches what you are looking for.
9. Price
There’s a lot of different geographical locations with different price points and different quality factors that play into outsourcing. Just because you want to save some money doesn’t mean you can compromise on the quality.
Look for centers with best quality performance even if you have to spend some extra dollars than other cheap ones with poor quality.
Why Customer Service Outsourcing is the Only Way To Go?
Customer service outsourcing’s huge business boom is not a fluke. It’s addressing a growing need. More and more companies around the world are turning towards outsourcing for one major purpose – To make sure that their customer’s needs and issues are heard.
It’s more likely than not that a customer will eventually have a problem with a service or the product a company provides. They will then persistently find a way to contact the company about it. It’s the company’s job to ensure that those issues are addressed and resolved.
This can be done through many customer support avenues, but a dedicated customer service team is best. Agents are right on the other side of the screen, they don’t need to be inhouse to be able to do the things that customer service support agents do.
Whether it’s answering remote class, replying to emails or talking to customers through chat channels, all of this can be done without the need for extra bodies in the company office. Customers will be able to contact customer support anytime, anywhere as customer service agents won’t need to stick to standard business hours.
Infact, some of them might be in a different time zone altogether. They can man the phones and reply to emails at any hour. This way customers won’t have to wait to call out and wait for a response until the next day.
You don’t have to provide equipment, office space, internet and phone lines. Companies will save a lot of money on the overhead by outsourcing jobs. Customer service agents working remotely will also be paid only through their work, giving companies plenty of savings.
