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Pros and Cons of Outsourcing Customer Service

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There’s a lot to love about outsourcing customer service. The wide range of tasks that can be handled, the round-the-clock work availability, the access to the latest technologies, and—of course—the cost savings.

But there must be some downside, right? Well, frankly, there are a few things that could be less than ideal when it comes to outsourcing. But the good news is, each one of them can be avoided or mitigated with proper advance training.

Let’s dig into the business case for outsourcing customer service, and the related pros and cons that you should be aware of.

What is Outsourced Customer Service?

Outsourced customer service can refer to any type of customer service work that’s handled by a third-party company on your organization’s behalf. Typically, businesses outsource work to other companies when they don’t have the time, resources, or in-house team to handle that work on their own. In many cases, outsourcing work can be an incredibly cost-efficient, and often long-term strategy for many organizations.

Key business functions and customer service tasks that can be outsourced to an external service provider include:

  • Process incoming calls, solve high-level needs, and route more detailed calls on for expert assistance
  • Process orders and/or schedule service
  • Upsell callers to newly released products and services
  • Evaluate customer complaints, identify trends, and provide solutions
  • Make outbound follow-up calls to customers and complainants
  • Maintain your CRM’s contact database

Outsourcing customer service (link) efforts is one example of the overall umbrella of business process outsourcing (BPO). Outsourced work centers on non-core activities, such as data processing, customer service, financial records management, technical support, graphic design, transcription services, medical billing, and so many more areas.

Why do Businesses Choose to Outsource?

Organizations that decide to outsource business processes make that decision for a variety of reasons. Major incentives include building a skilled talent team without the associated recruiting, training, or hiring costs, and no need to invest funding into upgrading technology.

In addition, outsourcing work allows key personnel to focus their time on their core (high-profit) competencies, while owners and upper management focus on exploring new revenue streams.

Where to Start When Considering Outsourcing Customer Service

Before you get too far down the rabbit hole, let’s first make sure that outsourcing customer service operations is a smart business choice for you.

There are a few things to consider before jumping right into bringing a remote team on board, like how do your customers reach out? Are you planning a big product release soon? Is your call volume too big for your in-house team to handle right now, and does that volume change seasonally?

Let’s go over each of those questions one by one.

How Do Your Customers Reach You?

Studies have shown that most people want to connect with brands either by talking to a representative or chatting online. Providing 24-hour telephone coverage with a dedicated customer service department could mean adding more workers to cover after-hours calls and messages, resulting in much higher payroll costs. However, is important to address the connection today between consumer loyalty and social media. Surveys show that social media is the number one channel to build a connection between brands and consumers.

Is Your Business in a Growth Phase?

Growth preparations might be needed for a company that’s launching a new product—especially one that’s received excellent feedback and significant pre-order numbers during a customer testing phase. Outsourcing provides excellent opportunities to grow without adding additional staff or the office space needed to house them. By outsourcing, you avoid the typical growing pains associated with recruiting and hiring new talent, employee flexibility, and operational control.

How Large is Your Audience?

When your business contracts with an external customer service partner, it is vital to ensure the relationship considers your audience demographics. You want to train your outsourcing partner on your audience’s goals, wants, and needs, so they can speak with empathy when customers call in. At the same time, you should provide training on your company culture, so agents can represent your key principles.

Is There Seasonal Call Demand?

Responding to seasonal call volumes can be expensive, especially when it comes to building and maintaining an internal call center. The medical industry provides us with a perfect example. Flu season may start in the fall, but it typically peaks during February. This could result in increasing call volumes from concerned patients leading up to flu season with call rates surging in midwinter.

To meet shifting call demands, choose an outsourcing call center to respond with a capable customer support team that has the communication skills and technology to answer each call effectively.

Pros of Outsourcing Customer Service

There are tons of benefits of outsourcing customer service—and almost all of them tie directly back to the financial benefits and cost savings.

Ability to Operate 24/7 if Desired

Expanding operating hours often means a huge financial investment. However when outsourcing, you can easily find a partner in a different timezone who can work your “graveyard shift” during their daylight hours—and all at a lesser cost than hiring someone at home.

Accessibility to Multilingual Agents

Bring in multilingual agents that can easily communicate with your specific customer base to provide a more satisfying customer experience.

Decrease Your Waiting and Hold Times

Lower agent salaries mean you can bring on more agents for the same overall labor cost—which provides a larger customer service team that can serve more customers, faster. Outsourcing allows you to keep customer response times high, which in turn keeps customer satisfaction rates up as well.

Eliminate Costs of Employment

Full-time (and even part-time) employment is expensive. Recruiting, hiring, and training costs, overtime costs, sick day coverages, health and benefits contributions, and staffing turnover costs—all of this is eliminated when outsourcing work. Cost-effective outsourcing solutions are

Cons of Outsourcing Customer Service

Along with the benefits of outsourcing customer services, there are a few disadvantages, per se, that you should be aware of when bringing in an outsourcing partner.

Process Shifts May be ‘Felt’ by the Customer

Failure to provide sufficient training to new call center agents can create a noticeable shift in customer care that can be felt by customers. Avoid reduced satisfaction ratings by implementing a comprehensive training process for all customer service staff in advance of ‘going live.’

Miscommunication Due to Language Barriers

Ideally, you should choose an outsourcing partner that speaks your customers’ native language fluently. Thick accents and misunderstood phrasings can create frustration or breed miscommunication for customers who call in seeking assistance, so be sure your contact center agents meet your language fluency requirements.

Lack of Industry Expertise

Outsourced customer service representatives may not have an intimate understanding of your industry, or may not use the same industry terms that your in-house employees do. To avoid creating confusion, partner with agents who are familiar with your industry, or provide thorough training for those who are not.

Misaligned Quality Control Standards

As is the case when passing control to anyone—be they an outsourced partner or a new internal hire—handing over the work you’ve previously been managing will be hard to do. For that reason, you’ll want to put clear quality control procedures in place to ensure work is done at an acceptable standard that remains in line with in-house efforts.

How to Find the Right Outsourcing Partner

Sure, there are pros and cons of outsourcing customer support. However, finding the right call center partner will make it easy to enable the benefits while mitigating any disadvantages.

TDS Global Solutions (TDSGS) is a leading global provider of human resource department services and operational support services. We’ve tested more than 15 million call center agents for voice inflection, proper language skills, and level of caller engagement, and have built a database of the highest quality outsourcing companies that can serve any industry or need.

Our 30+ years in the industry have positioned us as experts in pairing businesses with outsourcing partners. If you're ready to explore outsourcing customer support solutions that will help you expand your customer base with high-quality service, reach out today!

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