Businesses continue to invest in improving the customer experience, and one way they can do so is through outsourced customer service.
Let’s take a deep dive into what it is, why you should consider it, and how you can get started.
What Is Outsourced Customer Service?
An outsourced customer service is when you partner with an outsourcing provider to handle and/or support your customer service functions. The expert team your outsourcing partner put together will resolve customer queries and concerns received via phone, email, chat, and social media. They can also provide them with product/service information and collect their feedback.
Knowing that your customers can receive timely, professional support, you won’t have to worry about its day-to-day operations. As a result, not only can you maintain a high level of customer service, but you can also utilize resources on core business activities.
Why Should a Business Consider Outsourced Customer Service?
While it’s true that your in-house team can manage customer service and keep your customers happy, they may not be available 24/7/365. Are you really willing to burn them out? If there’s a surge in customer queries, can they handle, much less finish, such high volumes before their shift ends?
Remember: Happy customers drive meaningful growth for your business. Positive reviews from word of mouth alone increase your brand’s positive image and, ultimately, its sales.
Such cases are why 50% of companies outsource their customer service functions. Other, more prominent reasons include:
Wider Customer Service Coverage
Outsourcing customer service enables you to offer global 24/7, multilingual support without stretching your in-house team too thin.
You can rely on your outsourced team to keep service lines open when customers need them most, which is often late in the evenings and on the weekends. This way, no query will have to wait until the next business day to get resolved.
What’s more, the outsourced team can fill gaps the in-house team lacks in terms of cultural familiarity, language skills, or scheduling flexibility. You’ll be able to reach customers and provide them with more accessible, personalized support where they are, regardless of borders or language.
Better Multi- and Omnichannel Support
Outsourcing customer service makes it easier for you to reach customers on their preferred support channels—phone, chat, email, or social media.
Your outsourced team can readily step in, as they’re equipped with the skills needed to converse well in a given channel. More importantly, they can adjust their approach so your customers feel heard, no matter which channel they use to reach out.
Deeper Customer Insights
Outsourcing customer service helps you gain better insights into your customers’ behaviors, sentiments, and recurring pain points.
Your outsourcing partner provides you with a tailored, data-driven report that uses the customer data they collected to analyze how they measure up against your key metrics. With this report, you’ll be able to:
- Know how the results impact your business growth and predict your customers’ needs.
- Improve your products/services and customer service strategies.
How Does Outsourcing Customer Service Lead to Cost Savings and Efficiency?
Fifty-seven percent of companies outsource their customer service functions because they can save 83% on monthly costs. And there are two ways you can optimize cost here:
In Labor and Employment
- Salaries and benefits, because you don’t add new members to your in-house team, and you only pay the outsourcing partner according to the agreed-upon rate.
- Training and onboarding costs, because your outsourcing partner only hires talent who already have the baseline skills. While product- or client-specific training is required of you, its administration is generally handled by the partner.
- Administrative costs, because much of the HR, management, and operational overhead for your outsourced team is handled by the outsourcing partner.
In Infrastructure and Technology
- Facility costs, because your outsourcing partner already has the office space to situate the outsourced team.
- Technology investments, because your outsourcing partner will provide and maintain the equipment and software (including AI tools) that the outsourced team will use.
What Are the Key Models of Outsourced Customer Service?
Understanding the models of outsourced customer service helps you choose the right approach to manage your business better and keep your customers happy.
According to Location
- Onshore. You’re working with an outsourcing partner in your own country. While it’s the most expensive of the four, this model ensures cultural alignment and real-time communication between the two of you.
- Nearshore. You’re working with an outsourcing partner based in neighboring countries or that has a similar time zone to you. This model has low cultural, language, and operational barriers, making it convenient to manage the outsourced team.
- Offshore. You’re working with an outsourcing partner based in distant countries. This is the most cost-effective model, especially when you factor in the 24/7 operations and multilingual support you’ll receive.
- Hybrid. Your in-house team works with the offshore team (usually). This model ensures effective collaboration and project management, thereby maximizing operational efficiency.
According to Engagement/Relationship
- Dedicated team. Your outsourced team works only for you. The team has deep knowledge of your products/services, enabling them to resolve even the most complex queries.
- Shared team. Your outsourced team isn’t exclusively yours; it’s shared with the outsourcing partner’s other clients. The team is flexible enough to handle customer queries for whichever client is next in the queue.
- Staff augmentation. Your outsourced team works for you temporarily. The team is hired to fill the skills gap the in-house team needs (skill-based) or to address the high volume of customer queries during the season (project-based).
According to Service Coverage
- Full-service BPO. Your outsourcing partner offers a broad range of customer service support. It includes call center operations, technical support, order processing, customer feedback collection, and social media inquiries.
- Specialized providers. Your outsourcing partner focuses exclusively on a specific customer service function. They have dedicated teams, proven quality assurance processes, and customized training to ensure service quality.
How Do You Select the Right Provider for Outsourcing Customer Service?
With too many options, it’s important to take your time in selecting the most suitable outsourcing partner, who can make or break your customer service operations. And so here’s what you should look into:
Get the Basics
Before anything else, know the basic information about each of your potential outsourcing partners. Doing so will help you eliminate the ones that don’t align with your outsourcing needs right from the start.
- Their name and location verify the legitimacy of their business.
- Their years on the market and experience in your industry ensure their capabilities.
- Their company size indicates how many team members they can provide for your outsourced team.
- Their service offerings confirm they fit into what you want from them.
Check Their Credentials
Narrow your list further by checking their expertise and reputation. You can examine these by asking the potential partner two questions:
- What kind of customer service support have they experienced?
- How much experience do they have in that kind of customer service support?
You can also gain more insights from:
- Their past or current clients, preferably those in the same industry as you or who have availed the particular service you’re seeking.
- Trusted third-party review platforms, such as Trustpilot and Clutch, for objective, verified reviews.
Examine Their Operational Capability
Your ideal outsourcing partner should be capable of meeting your customer service support needs.
To assess, consider your priorities and compare them with what you have researched so far. For example, if the priority is:
- Fluctuating demand, they should be able to scale the outsourced team up or down on demand.
- Round-the-clock support, their teams should be able to operate 24/7, or at least match your business hours.
- Exceptional results, their case studies should demonstrate KPIs that consistently meet or exceed service-level agreements (SLAs).
Assess Their Data Protection Practices
Data privacy and security are significant concerns with outsourcing. That’s why in your selection assessment, the ideal outsourcing partner should have robust ISMS in place, as it ensures they can protect your sensitive information.
They must also have complied with global standards, such as ISO 27001, SOC 2, GDPR, and HIPAA.
How Do You Transition From In-House to Outsourced Customer Service (or Implement an Outsourcing Model)?
Outsourcing your customer service functions for the first time needs careful planning and execution. Let us show you what the transition process looks like:
What KPIs Should You Use to Measure Success in Outsourced Customer Service?
Clear KPIs enable you to track how well your outsourcing partner is meeting your objectives and performance standards. You’ll also be able to identify areas for improvement in the team’s performance, ensuring your customers receive the best experience.
- Automated resolution rate shows the number of customer issues an AI tool, such as a chatbot, can resolve without the help of a live agent.
- Average handling time shows how long the team can resolve customer issues.
- Customer effort score measures how the team makes it easy for customers to resolve their issues.
- Customer retention rate reflects the team’s ability to deliver quality service that keeps customers loyal to your brand.
- Customer satisfaction reflects how well the team meets customer expectations.
- Deflection rate shows how well an AI tool resolves customer issues without the help of a live agent.
- Escalation rate reflects how well the team resolves customer issues without needing additional support from higher-level experts.
- First-call resolution indicates that the team can resolve customer issues at the first interaction.
- Net promoter score shows how well the team delivered quality service, ensuring long-term customer relationships.
- Quality assurance score evaluates how well the team manages customer interactions based on your benchmarks.
- Repeat contact rate reveals how well the team resolves issues the first time, reducing the need for follow-up inquiries.
- Ticket backlog demonstrates how well the team manages and resolves a stack of customer issues.
How Does Outsourcing Customer Service Impact Customer Experience (CX)?
Outsourcing customer service can shape the entire customer experience because every interaction influences how people feel about your brand.
When an outsourced team is well-trained, fast, and personable, your customers enjoy smoother conversations and get their issues resolved quickly. This builds trust, increases satisfaction, and makes them more likely to stay loyal.
But if responses are slow, overly scripted, or handled by unequipped agents, frustration builds just as fast. The experience becomes the reason they leave.
What Challenges or Risks Are Involved in Outsourced Customer Service, and How Can You Mitigate Them?
Like any business move, outsourcing has its share of challenges and risks. That’s why you must know what these are beforehand so you can prepare for them.
In Quality Control
Because you can’t oversee the outsourced team in person, there will be inconsistencies in the quality of service. Most of the problem stems from the team still learning your brand or navigating the cultural or language gaps.
However, this issue is the easiest to resolve. You only need to work with the right outsourcing partner, set clear SLAs, provide regular training, and maintain clear communication to ensure the team meets your service quality standards.
In Security and Privacy
Handing customer data to an outsourcing partner naturally increases the risk of compromise due to cybersecurity threats.
To ensure its safety, you must only partner with an outsourcing company that has robust data privacy and security management systems and is compliant with existing global standards. It’s only they who have tried-and-tested plans and procedures to prevent and handle breaches.
In Brand Reputation
Even if they’re only an outsourced team, these agents still represent your brand. Any misbehavior and misalignment in values or culture will reflect on you.
You can prevent this reputational risk by educating them about your brand culture and regularly monitoring the quality of service they deliver.
Expand Your Customer Service Capabilities with Logix BPO
Your customers are the lifeblood of your business, and delivering the best customer service is key to creating an exceptional experience.
We at Logix BPO can make it easy for you to achieve that. We have an expert team that has already proven they can increase FCR and CSAT by 90%. Partner with us today, and together, we’ll transform your customer service operations into one that drives results and growth.
FAQs
Is outsourced customer support cheaper than hiring in-house agents?
Yes, because you eliminate—or at least lower—employment and overhead costs.
Will outsourcing customer service affect my customer experience?
Yes. If the outsourced team provides a seamless service, it’ll have a positive impact on the customer experience, ensuring your customers stay loyal to your brand. If they can’t, your customers will most likely leave.
How do I choose the best outsourced customer service provider?
When selecting your ideal outsourcing partner, verify their business legitimacy, check their credentials and experience, and assess their data protection practices.
