If you’re looking to grow your business, Customer Service Outsourcing might be a good option. But, it’s important to remember that hiring underpaid contracted agents could lead to unhappy customers who might not come back following a negative experience. To avoid this, it’s crucial to select a team carefully who interacts with your customers. Let us see how we can find the best team.

What is Customer Service Outsourcing?

In simple terms, customer service outsourcing involves a company enlisting the services of an external organization to manage its customer service operations. Instead of relying on in-house employees, individuals from a separate company handle tasks such as addressing customer inquiries, managing complaints, and providing support.

Companies often opt for outsourcing to cut costs, tap into specialized skills, or enhance service quality. The external organization, also known as the vendor, may be situated in the same country or in a different one. This strategy enables the original company to concentrate on other aspects of its business while ensuring that customers still receive the necessary support.

Presently, outsourcing customer service to a third-party service provider has become a widespread practice. The decision to outsource customer care can be influenced by various factors. It could be due to being a new business with limited staff and budget, a desire to focus on core business areas hindered by the current setup, or a need to give the support department a professional makeover.

Regardless of the reason, outsourcing customer support provides a highly adaptable solution that can be adjusted based on unique support requirements and strategies.

1. Why Should You Outsource Customer Service?
2. Potential Challenges of Outsourcing Customer Service
3. Outsourcing support vs. in-house support
4. Advantages of outsourced customer service
5. What are the drawbacks of outsourcing customer service?
6. How to determine if outsourcing your customer service is the right move for your business?

What are the different types of customer service outsourcing?

When considering outsourcing your customer service, it’s important to understand your options. Carefully evaluate the following alternatives and select the one that best suits your specific needs.

Multi-channel vs. Omnichannel Support

When it comes to outsourcing customer service, there are several important decisions to make. The first is whether to opt for multi-channel or omnichannel support. Multi-channel support involves using different channels to offer customer service, like email, live chat, and phone calls.

On the other hand, omnichannel support aims to provide a seamless and integrated experience across all communication platforms.

If your company only uses a few channels and receives a moderate amount of customer requests, multi-channel support may be the best option. However, if your customers use multiple devices and communicate through various channels, ensuring consistency is crucial. Omnichannel support can improve customer satisfaction by providing a more personalized experience.

Shared vs. Dedicated customer support agents

You need to decide whether to opt for shared or dedicated customer support agents. If personalization is not a high priority, shared customer service may be appropriate. If your business has complex customer interactions, dedicated agents can give a more tailored experience.

They work exclusively for your business, so they can get to know your products, services, and brand, enhancing customer satisfaction and retention.

Why Should You Outsource Customer Service?

Like any business decision, outsourcing your customer service operations should only be pursued if there are compelling reasons to do so.

Now, let’s explore some of the potential advantages for small businesses that opt to collaborate with third-party customer service teams.

1. Cost-Efficiency?

The primary motivation behind companies opting to outsource customer service is generally to achieve cost savings in their operational expenses.

If you can maintain or even elevate the quality of customer service through a third party and simultaneously reduce costs, there’s little need for further consideration.

In an ideal scenario, this decision could turn into a profitable venture, as your outsourced partner, equipped with a specialized team, transforms your customer service from being merely a “cost of doing business” into a revenue-generating asset for your company.

2. Access to Experts and Expertise

When you choose to outsource customer service, you’re not just enlisting workers; you’re gaining entry to a pool of well-trained professionals with a profound understanding of customer service best practices.

These third-party providers typically stay abreast of the latest industry trends, tools, and technologies, enabling them to deliver a top-tier customer experience to your audience.

This aspect holds particular significance for small teams that may lack an established, in-house customer service team or have a minimal presence in this regard.

These experts are also equipped to evaluate your existing customer service efforts, identifying what works, what doesn’t, and where their attention may need to be focused. In situations where the provider is only assuming control of specific operations, you may have the opportunity to seek additional advice from them as needed.

3. Scalability and Flexibility

Outsourcing customer service can turn it into a revenue-generating asset for your company. You gain access to a pool of well-trained professionals with the latest industry knowledge and expertise.

Your outsourced partner can scale up or down based on demand and offer 24/7 service to accommodate diverse customers, helping you save costs by avoiding fixed salaried employees.

Additionally, your outsourced partner possesses the capability to scale up or down based on seasonal demands, fluctuations in customer engagement, and other timely considerations. This flexibility helps you optimize operational costs by avoiding unnecessary expenses on fixed salaried employees.

Your customer service partner should offer round-the-clock service to cater to the needs of diverse local and international customers.

4. Technological Advantages

service tools and software to the table, enhancing their ability to serve your customers effectively. Given their specialization in customer service, you can trust that the tools they utilize are the best available for your specific needs. Furthermore, your outsourcing partners are adept at maximizing the functionality of these tools.

In contrast, managing customer service in-house would necessitate significant time and financial investments in identifying the right tools and providing training to your employees on their optimal usage.

Your providers will also stay abreast of emerging customer service tools, potentially integrating new technologies as they evolve during your partnership.

5. Risk Mitigation

Outsourced customer service teams excel in managing the inherent risks associated with delivering exceptional service to your customers.

Firstly, they recognize the crucial role customer service plays in shaping the overall customer experience and brand relationship. Consequently, they exert continuous effort to ensure you remain shielded from the risk of customer loss due to subpar service or support.

Secondly, they are equipped to maintain legal compliance concerning data privacy and operational security. This aspect proves particularly invaluable for small healthcare practices and organizations operating in other protected industries.

Potential Challenges of Outsourcing Customer Service

It is unrealistic to expect to simply delegate your customer service operations to a third party and completely detach from the process.

As you start the process of integrating a third-party provider, it is important to anticipate and prepare for several challenges that may arise during the course of this journey. These challenges may include the following:

1. Misaligned Goals and Expectations

If your outsourced partner doesn’t fully understand why you’re doing customer service and what you want to achieve, they won’t be able to deliver. We’re not just talking about the basic goals here, but also the unique ways you want to stand out from the competition in your customer service.

If there’s a mismatch, your customers might end up with a subpar experience, hurting your brand’s reputation.

2. Obstacles and Isolation

As mentioned earlier, several potential barriers can obstruct your partner’s efficiency and negatively impact your collaboration. For instance:

• Language and cultural barriers may result in confused messages and misunderstandings.
• Data silos could lead agents to act based on outdated information or engage in redundant tasks.
• Technical obstacles might create bottlenecks in workflows and otherwise hinder overall performance.

In reality, these barriers can arise even when managing operations entirely in-house. With an external party involved, it requires significant diligence to dismantle these silos before they become overwhelming.

3. Data Security

Regardless of the assurances provided by your customer service provider, entrusting your data to a third party always involves some level of risk. Regrettably, if your partner falls short in safeguarding your company’s or your customer’s sensitive information, you will bear the consequences.

Whether it’s a loss of trust from your customers, hefty fines, penalties, or a combination of these, the repercussions of your partner’s negligence become your responsibility.

4. Change Management

Introducing a third-party customer service team, in any capacity, will necessitate an adjustment for your internal staff members. This, in itself, can pose a challenge for everyone involved and may result in various negative outcomes if your change management processes are not handled strategically.

Internally, your employees might experience confusion regarding the reasons for the change, their current responsibilities, and their future within the organization. This internal confusion may eventually extend to your customers, who could raise similar questions about your team’s commitment to their success.

Outsourcing support vs. in-house support

Choosing between outsourcing support and in-house support is a crucial decision for a business’s customer service operations. Opting for outsourcing support stands out as the best option for several reasons.

Outsourcing brings in a skilled workforce with specialized customer service expertise, ensuring proficiency and staying updated on industry trends. This access to a trained team, available around the clock, improves customer interactions, leading to higher satisfaction and loyalty.

Furthermore, outsourcing provides unmatched scalability and flexibility, allowing businesses to adapt to changing demands, seasonal peaks, and diverse customer needs. The cost-efficiency of outsourcing is evident, as it eliminates the need for significant investments in infrastructure, technology, and training, enabling better resource allocation.

Outsourcing also grants access to advanced tools and software managed by experts, without the hassle of research and training. This technological advantage ensures a smooth customer experience and keeps the business at the forefront of innovation.

Advantages of outsourced customer service

The option to delegate customer service responsibilities in small businesses can prove highly advantageous. The following are some advantages of outsourcing:

1. Streamlining customer service diminishes the workload

Small business proprietors and their staff often juggle multiple roles. Handling customer phone calls and emails diverts attention from more lucrative activities like sales. Outsourcing customer service allows for time liberation, enabling both you and your team to concentrate on boosting sales.

2. Outsourcing customer service leads to cost savings

Engaging contract workers, including call center personnel, eliminates the need for fixed salaries and employee benefits. Additionally, you avoid the expense of providing customer service representatives with equipment. The cost of a computer and essential software can exceed $1,000, while a quality headset may surpass $60. Factoring in office space, a desk, a chair, an additional monitor, and related expenses, the equipment for a single customer service representative could amount to $5,000.

3. Outsourcing customer service ensures coverage beyond regular business hours

Many consumers anticipate access to companies’ customer service departments during non-business hours. Call center staff, available 24/7, deliver efficient customer service precisely when your customers require it.

4. Outsourced customer service facilitates multilingual support

Numerous businesses cater to customer bases with languages other than English. Utilizing outsourced customer service platforms provides enhanced access to representatives fluent in multiple languages. Consequently, your customers can engage confidently with your company, assured that their queries will be addressed accurately without language barriers.

What are the drawbacks of outsourcing customer service?

Note that all of the disadvantages mentioned depend on the services provider that you opt for. While opting for outsourced customer service comes with several advantages, it’s crucial to be aware of the downsides and discuss them with your chosen provider before making a decision.

1. Potential Decrease in Customer Satisfaction:

There is a concern that customer satisfaction may drop when switching to a call center or answering service. To address this, business owners can carefully examine the provider’s track record and references, ensuring they opt for one of the best answering services or call centers.

2. Lack of Familiarity with Your Company:

Outsourced representatives may not have the same level of knowledge about your company, products, and services as an in-house team. To overcome this, maintain clear and consistent communication with your outsourced customer service team. Keep them updated on new product launches, price changes, policies, and other important details. For more specialized services, consider hiring dedicated agents who focus exclusively on your business, gaining in-depth knowledge.

3. Your Business may not be a Top Priority:

Outsourced providers often handle inquiries for multiple businesses, making it challenging for them to prioritize your company. While you may want them to be enthusiastic about your business, it’s not guaranteed if they serve various clients. Hiring more expensive dedicated agents might address this issue, but it comes with an increased cost.

4. Security Concerns:

Certain businesses involve exchanging sensitive information like credit card numbers, names, and addresses. If your business deals with such data, ask about the cybersecurity and risk management practices of the call centers you’re considering. Many call centers have robust security measures in place to protect your customers’ data.

How to determine if outsourcing your customer service is the right move for your business

Our experience with an e-commerce brand in the apparel industry serves as an example. They approached us following a significant growth period, experiencing a 4-day response time and a 9-day resolution time, posing a serious threat to customer retention.

Although we successfully reduced the response time to 6 hours and the resolution time to 30 hours, the client could have benefited from seeking support earlier. Here are three key metrics to help you assess when your customer support team might require additional assistance.

1. Increasing Response Times:

• If your first response time and average handle time are on the rise, it could signal that your agents are reaching their capacity with the ticket volume.
• Industry benchmarks suggest a 90-second first response time for chat support and a 24-hour response time for customer service email support.
• Example metrics: 48 seconds for live chat and 12 hours for email.
• While industry averages provide a reference, it’s crucial to monitor your own metrics over time and be vigilant for any negative trends.

2. Consistent Resolution Times but Low Satisfaction:

• If resolution time remains consistent but customer satisfaction drops, it may indicate that agents are not dedicating sufficient thought and attention to each ticket, possibly due to overwork.
• Monitor variations in the number of tickets handled per day by different agents.

3. Consistent Response Times and Satisfaction, but Varying Ticket Volumes Among Agents:

• If response times and customer satisfaction levels are steady, but certain agents handle significantly more tickets than others, it could signal that specific agents are managing excess volume, which may become challenging for the entire team.
• Ensure you filter out social media comment-related tickets if they are routed to the same helpdesk, as combining them with regular tickets can distort insights.

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Conclusion

To sum up, customer service outsourcing is a strategic solution for efficiency and satisfaction. Knowing when and how to outsource is crucial. From workload relief to 24/7 support, it enhances business operations.

By monitoring key indicators, businesses can make informed decisions, fostering strong customer connections for sustained success. Choose a team such as Bobcares to get the maximum for your business.