Should You Outsource Customer Service? Pros, Cons, And The Ethics Debate
Undoubtedly, customer service outsourcing companies offer many compelling benefits. This operation model is known and appreciated all over the world. But does it mean that you should outsource every single element of your company’s work, including customer service?
Here are some key points to think about before outsourcing your customer service operations.
The importance of your customer service team
Customer experience and satisfaction studies all agree—a friendly, knowledgeable, and quick support team is worth its weight in gold. Quality customer care increases customer retention and satisfaction, and satisfied customers are less likely to switch to competitors. Additionally, having loyal customers makes cross-selling and upselling easier, which can grow revenue for your company.
Sometimes, though, your in-house team may not be able to keep up. This is frequently the case during peak periods, such as the holiday season. With a sudden surge of incoming calls, you might start feeling the pressure to get additional help for your contact center. Moreover, market research shows that the increase in ticket volume is a global trend that applies to almost every communication channel:
And, let's be real—a call center is costly to run. Maybe a cheaper alternative is business-critical, or perhaps you're dealing with staffing problems (after all, finding and training good reps takes a lot of effort). Is BPO (or business process outsourcing) your answer if you struggle with any of these problems?
The truth is, the answer to this question is multi-faceted. Let’s start with the pros.
Outsourcing customer service: Pros
Save on service costs
It's the number one argument in every outsourcing discussion, and understandably so. An outsourced call center is usually more cost-effective compared to an in-house one. When working with the outsourced team, you either pay for the work they do for you (cost per minute of every call) or their availability (cost per hour).
In many situations, customer support outsourcing enables you to save a lot of money because you no longer have to hire people, look for good candidates, keep the whole call center infrastructure running, or even subscribe to the necessary software licenses. The whole thing is on the shoulders of your customer service provider, and that’s pretty dang convenient.
Add flexible pricing models, and you end up with a solution that’s truly effective on more than one level.
Improve service availability
Do you want to add 24/7 call center services to your offer? No big deal; just ask your customer service provider. Of course, it comes with a price tag, but if your competitors don’t offer that level of convenience, you can outrun them and win your customers’ satisfaction. This element is especially important if you run an international company and want to pursue the omnichannel model. Let’s talk more about this.
Add omnichannel customer support
Today, your customers require more than just a call center. The above-quoted study shows there is an increase in every communication channel, including:
- Chat
- Phone
- Social media
- SMS (text messages)
If you decide to work with a decent customer service provider, they should offer you full support in the majority (if not all) of these channels. And that’s what customers expect from companies in 2023. Take a look at this list of preferred channels:
The answers given by Gen X and Y make it especially clear why providing multi-channel support is so vital.
I would add a knowledge base and self-service channels (think chatbots and voicebots) to this list. After all, 70% of respondents expect a company to have a self-service portal or content available to them. A case study mentioned in a Zendesk report shows that these two channels can be extremely beneficial to your business. One of Zendesk’s clients has implemented a web self-service channel. As a result, they saw an increase of up to 400% in customer traffic to their knowledge base, while the number of emails and tickets declined.
Offer support in more languages
In one of my previous articles, I emphasized that multi-language support is crucial if you have customers located in different countries. Companies that specialize in outsourcing customer service usually work with agents speaking multiple languages, so introducing support in French, Spanish, Mandarin, or any other foreign language is just a question of determining conditions with the provider.
Implement better technology
This advantage comes to the fore, especially when you are a startup and you have no CS infrastructure. It can take a lot of work for small businesses to build customer service operations from scratch, especially when you think about the potential risks that come with recruiting, hiring, and training the right customer support agents.
Professional customer support teams have all that figured out. They have access to a large number of experienced agents/consultants, and they know how to offer customer support services so that they are 100% effective. They might even have more advanced tools like AI-powered customer service chatbots. Plus, it is likely they are already using top-notch customer service ticketing software that streamlines their work.
In short:
So far, I’ve mentioned five essential benefits of outsourcing customer service. The biggest advantage of this solution is that it enables you to save money and have less workload to deal with every day. Your outsourced call center does all the heavy lifting while you can concentrate on growing your business.
So, is that the end of the discussion? Is customer support outsourcing truly your best bet? Let’s have a look at the other side of the coin.
Related read: Best Chatbot Software
Outsourcing customer service: Cons
Challenge of quality assurance
Over 50% of respondents think customer service is just an afterthought for many companies. You surely don’t want your customers to think this way about you. But this begs the question: will you be able to maintain high-quality customer support when your call center is located across the globe?
Of course, there are outsourced call center teams here in Canada or in the US, but the question of quality assurance remains. Every time you decide to outsource anything, you have to rely on your business partner’s proficiency and reliability. Before you sign on the dotted line, check your partner’s experience and the procedures they follow to ensure high-quality service. It’s also a good idea to get in touch with other clients and ask if they are satisfied with the service.
Lastly, ask how the company you’re about to work with feels about maintaining your brand voice in their scripts, sticking to your communication guidelines, and selecting customer service agents just for you. Answers to these questions will give you a lot of useful insight.
Contract complications
Many companies offering outsourced customer support try to protect their interests by filling their contracts with many clauses that make future cooperation...difficult, to say the least. Clauses can refer to handling complaints, service quality levels, minimal and maximal workload per month, and many more questions. Believe me; you don’t want to end up with a contract that hinders managing your own customer base or lacks technical support.
It’s in your best interest to sign an agreement that’s flexible and clearly states the obligations of your future call center.
You take the blame
This is, by far, the biggest con of this model. It’s not difficult to imagine a situation where something goes wrong, and you end up with an unsatisfied or even angry customer who wasn’t handled the right way. And what if there are dozens or maybe hundreds of these cases? It’s your reputation on the line. Explaining that you hired an external contact center and pointing the finger at them is simply not an option—for many obvious reasons.
Yes, you pay for every mistake, every mishandled customer, and every technical error, and you pay both with your money and your reputation. Are you ready for this risk? Think carefully.
Security concerns
In almost every country, there are more or less rigid data protection regulations. Every call center has to comply with these regulations because potential penalties can be very, very high. Using outsourcing services entails giving access to your company’s customer data to a completely different company.
And, of course, you can sign another agreement stating they are responsible (both legally and financially) for any negligence in this regard, but again, people calling your company think they are calling your company, not some third-party contractor. So if there is ever a security breach or personal data leak, you (and only you) take the hit.
That’s why it’s so important to verify the data security measures your partner has in place—and trust me, this is not an area for making assumptions or cutting corners. If you don't have a strong data security arm in your business, it's worth hiring a reputable consultant to help you perform this kind of audit. Don't forget to ensure there are some backup/emergency procedures in place to help minimize the risk of any breaches.
The question of ethics
Don’t get me wrong; outsourcing itself is morally neutral. However, some outsourcing practices are worth questioning.
Every company wants to save time and money, streamline operations, and offer 24/7 customer support.
But there's also the matter of the kinds of employers you're comfortable working with. Outsourcing is a pretty intimate relationship as business partnerships go—you're really allowing another company to become the 'face' of your own. Think of Apple and Foxconn, one of their largest suppliers; even though Foxconn's business practices have come under fire, Apple has taken a lot of that heat. The moral of that story is that it's important to look closely at the values and practices of the company you work with and ask yourself if they align with your business ethos.
So, if you decide to outsource your call center operations, how can you select the best outsourcing partner? Let’s talk about that for a moment.
How to find an outsourced customer service provider
Here are the questions you need to consider to make an informed decision:
- Location: For American companies, it’s better to work with a US-based call center. The closer your call center is located, the more effective cooperation you can expect. Plus, you want your call center to be in the same time zone.
- Expertise: Look for a company that has experience working with companies from your sector/industry. This is especially important if there are some regulations the call center has to comply with or specific terminology your agents must master to sound knowledgeable.
- The onboarding process: Ask about the onboarding process—what’s the beginning of cooperation like? How will this particular call center get to know your company and its offer? How do they research your business needs? Are there any workshops or training involved? Obviously, you want your future call center to know your product inside out, so this onboarding stage is essential.
- Quality assurance: You need to find a company that takes quality seriously. Don’t go with the cheapest option. You can ask about their procedures concerning non-typical problems, angry customers, gathering customer feedback (e.g., through CSAT), and measuring their satisfaction (ask what metrics they collect on a daily basis).
- The scope of the service: You don’t want a company that just receives calls from your customers. Look for a partner that can provide you with comprehensive service, including inbound calls, outbound calls, chat support, and other communication channels your customers require. Ask about analytics and reporting as well.
- Training and selecting reps: The key to success in customer service lies in selecting and training the best candidates out there. Ensure the team you’re about to work with has an experienced and well-trained team. Ask about their training programs. What do they entail? What skills do they improve? How often is training conducted? What are the results in performance and customer satisfaction? The call center can’t share confidential client data, but they sure can show you some specifics concerning their effectiveness. If possible, ask for a meeting with a customer service representative, and discuss these matters in person.
- Security measures: I’ve already talked about this element. Make sure your call center has good security measures in place, including a firewall, antivirus software, strong passwords, secure access levels, encrypted data transmission, etc.
How to outsource responsibly
Always think first about your customers and their needs. Outsourcing doesn’t always do the trick. Sometimes, it’s better to outsource just a portion of your CS operations and keep all the most important calls within your company.
For instance, you could create a separate helpline for your customers with the highest pricing plan or the most expensive product. This kind of “premium helpline” should be kept in-house as it cares for your most important asset—high-paying customers.
Another idea is to divide CS into the general hotline and the technical one. If you’re offering an advanced tech product that requires a lot of knowledge and expertise, outsourcing this part of your business can be a huge mistake. It’s easier and safer to keep those close to the chest and outsource all the general inquiries.
Conclusion: A big decision to make
Outsourcing customer service is a far more complex decision than it may seem. It's in your best interest to take these ten essential factors into account and be careful. Outsourcing can be the key to your next stage of growth, but you have to be smart about it. Think holistically and make the decision that’s best for you from the CX, operational, and PR perspectives. That’s crucial because, at the end of the day, you’re paying the price.
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