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How Outsourced Customer Service Can Drive Cost Savings
Outsourcing your customer service can save your business the high costs of maintaining your own in-house team, which are increasingly pricey as talent gets harder to find and keeping up with customer expectations requires new technologies.
So it’s no wonder that everyone from ambitious scaleups to companies embracing a new transformation to established enterprises will at some point juggle the same question. Should we outsource customer service costs?
The short answer is: yes. If you’re looking to deliver high-quality customer care at a lower cost-to-serve, outsourcing customer service fits the bill.
Businesses everywhere use customer service outsourcing as a way to mitigate their costs — outsourced contact centers have access to lower-cost talent pools and their process expertise means they do it all at peak efficiency. Growing companies also use customer support outsourcing to mitigate the time and cost of expanding into new markets. But in an era when experience is the main differentiator for most brands, the big question most companies have is: Can I outsource customer support without harming the customer experience?
The answer depends on the type of outsourcing companies you choose. In this guide, you’ll see how to find outsourcers that can truly unlock quality and value, how outsourcing customer service cost saves your company time and money compared to an in-house customer service department and how outsourcing isn’t just a cost saver but a growth and revenue enabler.
Why outsourcing customer service is key to business strategy
Outsourcing customer service is key to business strategy because companies are starting to realize something: Providing a customer experience good enough to satisfy modern and changing behaviors is difficult to do alone.
CX has always been a tough beast to master. But today, keeping up can feel like navigating an endless maze. Customer service needs to be faster, more intuitive, and more agile to meet constantly changing needs — all while you build a personal relationship with your customers.
This complexity blows up even more once you start to scale. You’re chasing new areas of the market; expanding into new regions, cultures and languages; upgrading and adding to your product offering; strengthening existing teams and adding new ones; and onboarding hundreds, if not thousands of new customers.
That’s a lot to be getting on with, and it’s not cheap.
Overhead, the price of staff, product and consumer research, marketing and insurance costs will increase as you scale up, and in tougher economic times, any opportunity to cut costs while maintaining quality is invaluable and rare.
This is especially true when it comes to customer service. The cost of maintaining customer service will only rise as you get more customers and their expectations of brand experience rise.
Here’s some reasons why an outsourced contact center for customer service can actually improve the quality of your CX strategy:
- Leverage experience and expertise
An outsourced contact center for customer service lives for this stuff, it’s their day-to-day. And it’s not just about finding the right talent — the right one can advise on the optimal balance of human and technology, like automation that helps agents work efficiently and digital self-service where customers prefer it.
They also have significant expertise in training to deal with different levels of customer service complexity efficiently (like how to route calls through different tiers of expertise) and scripts for handling disgruntled customers.
2. Access the latest technologies and trends
As the needs of the customer become more sophisticated, so do the technologies used to satisfy them. BPOs (Business Process Outsourcers) are dialed into the customer experience trends shaping the landscape, like personalization, privacy and digital-self service.
They know that the practices that got you there yesterday won’t get you where you want to go tomorrow.
Effective outsourcers will typically employ the latest technology to stay on top of new trends, such as automation software, AI-powered language translators (like our software we’re continually training to be better Polyglot), chatbots and smart personalization tools. But they also know it’s not all about the tech; it’s about using it pragmatically to fit your use case and customer needs.
3. Expand your geographical reach
A truly flexible and agile outsourcing provider can help you with the complexities of growing into new markets, languages, cultures and time zones.
They will already have the multilingual hubs operating in different time zones to reach your new customer bases, or will have access to the right talent in the right areas to quickly set up in new geographies. They may be familiar with data privacy and other regulations in that area.
How is outsourcing customer service more cost-effective than going in-house?
Outsourcing has many advantages over in-house customer service, that don’t just include cost reductions like the cost of hiring and of new technologies. The great thing about outsourcing when it’s done right, is that it adds value.
Finding ways to make cost efficiencies is important. But finding ways to do this while also adding value to your organization can make a big difference to your company’s success.
We’ll go over why traditional customer service and contact center outsourcing costs are lower — but also how modern, agile outsourcing can help you grow faster and earn more.
Traditional outsourcing cost reductions
1.Costs of hiring, onboarding and retention
When talent is elusive to find, the costs you incur searching for the right candidate get increasingly higher.This takes dedicated time and research to do, and if you’re not looking in the right areas, you could find yourself searching for candidates for upwards of six months.
Not only that, but the average salary of a customer service rep is $30,688 with $4,633 in benefits in the US. If, say, you hired a team of four reps, that’s $141,284 per year.
On top of this, an average of $92 billion is spent annually across sectors on training new employees.Outsourcing gives you immediate access to the best-in-industry talent pools for customer service, in lower-cost markets. They often leverage remote advisors or establish centers in places with similar language and culture but lower labor costs. In addition, many advisors have been trained in customer service delivery.
In-house customer service advisor turnover rates also consistently average around 30-45% a year, so even if you get through all the costs of hiring and training new reps, you may have to do it all over again within months.
With an outsourcer that invests in the wellbeing and career development of its advisors, turnover rates are lower. With their greater access to talent, they can also hire again at a significantly lower cost when employees leave.
2. Cost of technologies
Seventy percent of fast-growing companies are planning to increase their investments in customer experience initiatives in the coming year, according to the Salesforce “State of the Connected Customer” report. This means funding research and development initiatives, conducting market research and customer surveys, or implementing new technology or systems.
And these initiatives ain’t cheap, no matter what size your business is.
When you outsource your customer service, costs of these initiatives are passed to the outsourcer, who should already have these processes and systems in place.
How can modern, adaptive customer service outsourcers add value to your business?
It’s important to note that while BPOs save you money, traditional, low-cost outsourcers don’t always cut it in today’s customer-first competition.
Traditional BPOs focus purely on the cost-reduction side of partnerships, specifically lowering the cost of transactions. So if it costs you $5 per customer call, they might be able to deliver it for $3.50. But that doesn’t grow cheaper over time; it’s still a fixed cost, and it rises with the number of customer transactions.
A more adaptive outsourcer can find the right configuration of self-service, people and automation, meaning your customers can experience your brand on their terms. They’ll build a foundation to reduce more costs over time by shifting more work to AI and self-service, using human agents to train AI to get better, using behavioral science to drive self-service adoption, and enhancing staff productivity with smart automation.
On top of this, they’ll build in processes to continuously and proactively improve.
Flexible and smart outsourcing needs to be elastic. If it is, it allows you to:
- Deploy quickly and then pivot quickly as consumer needs, regulations and markets change
- Scale up rapidly at peak times and down quickly when things are slow
- Recruit and manage a pool of talented workers with the right language, hard and soft skills, and brand fit
- Manage workers with cultural perceptiveness to maximize engagement and brand values
- Create better CX journeys and interactions, free of silos
- Integrate high data competence and sophisticated analysis of customer journeys to create fast insights
Want to talk to us about our elastic approach to customer service outsourcing that will torpedo your costs? Check out our services page or have a chat with us directly.