Customer service outsourcing is a huge industry, resulting in approximately $525 billion dollars of spend every year, in fact.
But if you’re not outsourcing your customer service yet, it may seem like a big project that’s not necessarily worth the investment. For example, many companies who haven’t outsourced customer service before wonder:
- How can I find a partner that really understands my customers and meets my needs?
- Is outsourcing really more affordable than managing things in-house?
- What kind of customer service quality will I get if I outsource?
- How do I know if my outsourcing provider is delivering good service for my customers?
and, of course, there’s a lot more questions beyond those. Navigating logistics, goals, quality and service levels are all essential to a good customer service outsourcing partnership.
To make it easier to get started, we’ve put together this in-depth guide to the world of customer service outsourcing. Learn what to expect, what the benefits and challenges are, how to find the right partner and mitigate risk, and how to set up a successful outsourcing partnership that serves both your business and your customers.
What is Customer Service Outsourcing?
Customer service outsourcing is an ubiquitous presence through the CX industry. While customer service outsourcing may have gotten its start through call centers and phone lines, today, it’s evolved into so much more.
Today, customer service outsourcing includes functions like:
- multi-channel and omnichannel support
- email and SMS customer support
- clienteling and luxury customer service
- help desk and Tier II technical support
- customer loyalty and retention
- multilingual customer service
- 24/7 service and overflow support
- and more!
All of this contributes to why the customer service outsourcing industry is growing rapidly. According to 2023 research, the BPO and customer service outsourcing market size is anticipated to reach $525 billion dollars in worth, expanding at a CAGR of 9.4% from 2023 to 2030.
To put that in perspective, consider that:
- 90% of small businesses currently do, or plan to, use outsourcing in the coming years
- 70% of companies who outsource do so to reduce costs
- Companies who prioritize customer service and experience see revenues 4% – 8% higher than competitors
As outsourcing continues to grow and become a reliable resource for companies small and large to support their customers and grow their businesses, our guide will help you navigate the changing world of customer service outsourcing to take advantage of its key benefits.
Reasons to Consider Outsourcing Customer Service
Outsourcing your customer service can seem like a difficult project if you’ve never done it before. Isn’t it better to manage it in-house?
The truth is that in many cases, an external team can dedicate more time, focus and resources to your customer experience, allowing you to deliver better, more consistent service. This in turn creates better customer experiences, higher levels of customer satisfaction, and increased retention and loyalty. Consider some of the biggest reasons to outsource your customer service:
Cost-effectiveness
Outsourcing your customer service is generally much more cost-effective than managing it in-house. When you manage customer service in-house, you have a laundry list of costs and resources needed, such as:
- overhead costs, such as office space
- technology costs, such as software licensing
- tools such as laptops and phones
- hiring and training costs for employees
- salaries for agents and managers
When you outsource, you pay a simple, direct rate based on hours or minutes worked, or tasks completed, thus paying only for what you need. Large costs such as overhead and software are split amongst a call center’s variety of clients, giving you reduced costs and providing increased cost-effectiveness in the long run.
Increased expertise and talent
Outsourcing also allows you to take advantage of external talent pools and increased levels of expertise that would be difficult or expensive to hire in-house. For example, many companies work with outsourcing teams in countries outside of their country of business. As a result, they get to hire from a large talent pool that’s not subject to US labor market fluctuations.
In addition, you can gain access to more specialized skill sets for smaller projects without hiring a full-time employee, or get access to more diverse expertise than you would normally access in-house. Of course, this only provides better strategy, expertise and results for your customers and customer service strategy.
Access to better technology and processes
An external customer service team—likelier than not—has access to best-in-class technology and tools that would be expensive to purchase for an in-house team. As a result, working with an outsourced team gives you access to more modern solutions that can provide better support and experiences for your customers.
Not to mention that outsourcing teams, who focus on customer service and customer experience 100% of the time, tend to have stronger, more established systems and processes for providing the highest quality of customer service. While an in-house team could certainly provide great service as well, outsourcing provides you with the ability to immediately implement best practices and processes that might otherwise take months or years to develop internally.
Stronger levels of customer service
Similarly, working with an outsourcing team gives you access to a team of CX professionals. This expertise and experience can allow you to deliver higher levels of customer service than you might otherwise. In addition, an outsourced team, as mentioned, is focusing on customer service 100% of the time—unlike your internal teams, who have many other important goals and focuses as well.
As a result, outsourcing generally enables companies to provide:
- faster resolution times
- faster response times
- lower times in queue
- 24/7 service and support
- improved first contact response rates
- and more!
More internal focus on core objectives
With an outsourcing team devoted to your customer service, your in-house team also gets a boost—you get to free up a significant amount of time to focus on your core objectives like growing your business, improving your product and so on. Outsourced teams provide a lot of benefits for your customers, but this is one of the biggest benefits they offer for your company directly.
What better benefit is there than that of more time to focus on growing and improving your business?
Ready to perfect your CX?
Choosing the Right Customer Service Outsourcing Partner
Of course, not every outsourcing provider is created equal. Finding the right customer service outsourcing partner is key to ensuring that you actually see the benefits that outsourcing can provide. Here are some key factors to consider when choosing the right outsourcing partner:
- Your needs. What services and results you need will obviously have a huge impact on the type of provider you choose. The clearer you can be about the needs you have upfront, the better chance you have of finding a great-fit provider.
- Expertise and experience. Your provider should have significant experience in the customer service industry, as well as expertise in your industry and with your audience.
- Results. Look for reviews, testimonials, case studies, or other signs that your provider can actually deliver the results they’re promising. Past experience is a great indicator of future success.
- Communication. Good communication is crucial to creating a successful partnership. A provider who offers clear, honest and consistent communication from the start is likely to provide you with a better partnership.
- Flexibility and scalability. Can your potential provider offer flexible services and pricing, and scale with you as you grow? Are they willing to offer flexible services that scale up and back based on seasonal demand? Your provider should be willing to work with you to meet changing needs in different seasons.
Considering all of these factors will help you make a more informed decision and give you a better chance of choosing the right outsourcing partner. If you can, submit RFPs to multiple providers so you can compare options and get an idea of how different providers operate.
Challenges and Risks of Outsourcing
Many of the challenges and risks of outsourcing can be mitigated by working with the right outsourcing partner (see above). However, understanding some of these risks in advance allows you to discuss mitigation strategies with your provider during the search process, making it even easier to find the right provider.
Quality control. Quality control and service levels are one of the biggest challenges of outsourcing. When you’re outsourcing—customer service, or anything—you have to rely on an external team to make sure things are up to your standards. To ensure this happens, make sure you do these two things:
- Establish SLAs (service-level agreements) from the beginning. SLAs establish a baseline of quality that must be maintained by your outsourcing partner. Agreeing on what “quality service” looks like ensures that you get it—or that you can end the contract if you don’t.
- Develop a QA program. A good QA program monitors calls and customer interactions for quality based on an agreed-upon rubric and ensures that both quantitative and qualitative metrics are being met. Not only does this improve service quality, but it also improves consistency across customer interactions.
Brand consistency. Outsourcing can also sometimes create issues with brand consistency. When you outsource, you want to make sure the agents on your team truly know and understand your brand. This is one of the biggest factors that sets our teams at Global Response apart from other outsourcing providers. At Global Response, we train our agents to become your brand experts, knowing your brand inside and out—almost as well as you do. When your customers chat with our agents, they won’t ever know they’re speaking to someone outside of your company—and you’ll be able to rest easy knowing every customer is having an on-brand experience.
Cultural and language differences. Barriers in cultural understanding or language can lead to miscommunications, and it’s one of the biggest challenges with outsourcing your customer service. Almost everyone has had the experience of calling customer service only to be met with an agent following a script who can’t quite understand what you’re trying to ask. This experience is intensely frustrating, and results in a loss of brand trust and customer retention.
One of the easiest ways to avoid this is to work with an onshore or nearshore team instead of offshoring your customer service to somewhere far away. Although offshore teams have their benefits too—and don’t always encounter linguistic issues—working with an onshore or nearshore team will eliminate this risk almost completely.
Data security and privacy. Anytime you outsource, you open up an increased possibility for data leaks, breeches and other privacy concerns. The best way to avoid this is working with an experienced and professional outsourcing provider who offers the highest level of security and data privacy protections. For example, you should always look for a provider who is SOC-2 certified, as well as meets PCI compliance regulations. Discuss privacy and security measures and best practices with your provider before signing your contract, and be sure they can uphold your data privacy standards and methods.
Setting Up for Success
You’ve discovered the benefits of customer service outsourcing, and you know how to mitigate risks and pick a great provider. How do you set yourself up for success in your new partnership? We recommend focusing on three key areas: goals, training, and communication.
Establish clear goals and expectations
If you’ve found a great provider, hopefully you’ve already given some thought to what your outsourcing needs and goals are. Providing a clear scope and outlined goals from the start will get you off on the right foot. After all, if you don’t know where you’re going, how can you get there?
Start off by evaluating what your biggest needs are with outsourcing your customer service, and what the key areas of improvement you’d like to tackle are. From there, you and your provider can work together to set goals and expectations that will deliver the results you’re looking for.
Develop a training program
Ideally, a great customer service outsourcing provider will have a training program of their own to ensure that their agents offer the highest level of support for your customers. But you can also develop and offer training on your brand, processes, services, policies and more.
Working together with your outsourcing partner to develop a comprehensive training program will help ensure your agents become true brand experts who can answer any customer question quickly and knowledgeably.
Set communication strategies
Working with an external team can create a variety of communication challenges—not between you and your customers, but between you and your outsourcing teams! Follow these best practices to develop a communication strategy that works for you:
- Make communication expectations clear from the start. Know when and how your outsourcing team likes to communicate, and work together to create timely communication practices.
- Set agreed-upon channels. Knowing where you communicate is as important as knowing how you communicate. Rather than spreading communication over Slack, phone calls, emails and more, designate a specific, primary channel for communication.
- Meet regularly, when possible. Whether in person or over voice or video call, meeting regularly to communicate in real-time makes communication faster, simpler and clearer. If you can, visiting your call center regularly greatly improves communication and quality control.
- Know how to work across time zones. If your call center is located in a different time zone from your business—which is often the case—develop a communication plan and ways to coordinate and collaborate when you’re not always working the same hours. Asynchronous communication and work tools today, such as Loom, Miro, Slack and more will all make this easier.
Monitoring and Improving Outsourced Services
Finally, once your partnership is off the ground and your customers are being taken care of, you’ll want to develop and implement a consistent and ongoing strategy for measuring success and improving your services.
Customer service is a dynamic and quickly-changing environment. Not only do customer expectations change frequently, but the platforms customers prefer, the types of communication they want to receive, and what makes “good” service all change regularly. As such, you need to work with an outsourcing provider who can help you stay flexible and responsive.
When it comes to measuring the success of your customer service outsourcing, you’ll need to return to your goals and create relevant metrics. Some of the key customer service metrics we believe most teams should track include:
- First Contact Response (FCR) rate
- Time to Answer
- Average time in queue
- Call abandonment rate
- Customer satisfaction (CSAT)
- Net Promoter Score (NPS)
- Average handle time
These metrics will give you an overall picture of your customer service quality, as well as your customer satisfaction and loyalty.
However, just tracking metrics isn’t enough—you should also have an actionable plan for making sure you continue to improve. Gathering customer feedback regularly and having a strategy for implementing actionable feedback is one good way. But your call center provider should also provide solutions given your goals and level of partnership.
The Future of Customer Service Outsourcing
Customer service—and customer service outsourcing—has changed dramatically over the past few decades, and even just in the past few years.
Like everything else, as technology and innovation continues to progress faster and faster, customer service outsourcing solutions will continue to change and progress as well to meet new needs and become more efficient.
For example, many modern technologies are reshaping customer service. AI innovation is making it easier and cheaper to implement self-service solutions like chatbots, or implement AI-assistive technologies like Virtual Assistants, real-time sentiment analysis and more. As AI continues to provide more support for agents and customer service functions, it’s expected that outsourcing will continue to become even more scalable and cost-effective.
However, that doesn’t mean there’s no need for customer service agents at all—in fact, quite the opposite. 88% of customers prefer speaking directly with a human agent instead of navigating complicated IVR menus, and 77% of customers prefer dealing with a human agent compared to a bot. The human touch is still a must for customer service across every industry. As a result, you need to find a customer service outsourcing provider who offers both human-powered service and technologically-advanced solutions.
At Global Response, that’s exactly what you get. We offer customer service outsourcing solutions powered by best-in-class technology for increased insights, analytics and productivity, but perfected by humans, so you get the high-touch, world-class customer service that will set you apart from your competitors.
Ready to get started with customer service outsourcing? Connect with a Global Response agent today to see how we can transform your customer service results.
FAQs
Customer service outsourcing refers to the process of outsourcing your customer service processes to an external team. This can include things like customer support, phone and email answering services, omnichannel support, customer loyalty programs, and more.
Look for a provider that has experience in your industry and in customer service in general. You should also look for a provider that:
- offers services that meet your needs
- can demonstrate proven results for other companies
- has good communication practices
- offers strong data privacy and security measures
- can scale with you as you grow
- has flexible plans and pricing that matches your goals
