Mythbusting: Outsourced Customer Service Sucks
Modern outsourcing reduces costs without sacrificing quality.
July 3rd, 2017
Deciding whether or not to outsource your customer service is a big decision. Do you spend a lot of time and money on building an in-house team you have full control of, or do you let go of the reins and go to someone with experience for a lower price?
Public opinion doesn’t help when making this choice; outsourced customer service has a bad reputation. But what customers really hate is bad service, a result of the cost-saving craze of sending CS to offshore call centres. Luckily, they aren’t the only providers out there.
Outsourcing is usually the best choice for a growing business. We know, we’re biased. But keep reading because we really do want to help you make the right decision. We’re going to talk about the benefits of outsourcing, and how to avoid the disadvantages of outsourcing with a bad supplier. Let us prove outsourcing really doesn’t suck.
Does outsourcing really reduce costs?
The short answer is “yes, absolutely.” That’s not just true of the offshore call centres we just mentioned - UK-based suppliers are also cheaper than an in-house team, and they’ll do a much better job of looking after your reputation.
You don’t just need to take our word for it either – 69% of companies use outsourcing to reduce costs.
And customer service is costly.
To get a new team started you’ll need to secure office space, recruit advisors, provide them with hardware, and then train them. Then you’ll need to cover running costs like wages, bills, additional training, and software licenses.
So why is outsourcing cheaper? Surely they’re just charging you for the same overheads you’d have to cover for your own team? They are, but at a reduced rate. The scale of their operation, their technical expertise, and their experience let a good supplier bring down costs for individual clients.
The price of setup is also lower – outsourcers already have established teams that can remove the cost of recruitment and hardware. In-house teams don’t usually present the same initial lump cost of using an outsourcer but spending snowballs very quickly. First, it’s someone already in your team. Then you need to hire someone. Then you need to hire more people. Then find more office space and PCs for them to work from. Then you need a tech solution to help them manage contacts more effectively.
Costs can easily stack up without you even noticing. And that ‘as you need it’ approach to team building can create a team that costs more than it needs to.
Optimising the cost of running a customer service team is a specialty of outsourcers (it is the best way for them to earn a profit after all). They’ll know how to use tech solutions to increase productivity, and how to get customers using more efficient channels like webchat.
Create direct comparisons between suppliers, and your in-house solution, when getting quotes. That means looking at what is and is not included in the cost. Some will charge more for supervision, holiday pay, PCs and other hardware, data storage, reporting, and more.
How do you do that? Ask the right questions. The sections below cover what you need to talk to any potential suppliers about before you make a decision.
The benefits of outsourcing
Modern outsourcers rely on the expertise and quality of service they can offer to differentiate themselves. If they fall behind in either element they risk losing business to competitors. As someone looking for an outsourcing partner, that means you get to benefit from their knowledge of things like:
- Common queries
- Industry norms and trends
You don’t know what you don’t know, and a fledgling CS team can make mistakes purely because they don’t have experience or visibility.
An outsourcer that has worked in your industry will understand common query types, and the most effective way to handle them. They'll know the supply chain inside out and can help you explore the art of the possible, streamlining your processes in ways that are otherwise out of reach.
That’s really important whilst you’re still growing– 80% of customers believe speed and efficiency matter most in CS.
And 73% of customers say a positive customer experience is among the key drivers of their loyalty to a brand.
Customers want in-depth answers as quickly as possible. For the benefit of your bottom line you need to be able to provide them from the get-go; new customers are 4-10 times more expensive to acquire than simply retaining current ones. Keep your costs of growth down by holding on to as many customers as you can.
How do you know how well your CS operation is performing? You need to pick the right metrics to assess how you’re progressing towards your business goals. It’s in an outsourcers’ best interests to know the most relevant KPIs and the most effective ways to measure them. They’ll already have systems in place for tracking performance, saving you the research time and development cost of getting them in place for your own team.
Customer service operations are reliant on the technology they use. Advisors will only be as efficient as the CS platform they’re using allows them to be, and you can only measure their performance with the KPIs it allows you to measure.
Another layer of uncertainty when weighing up tech solutions is the speed with which they’re developing new features. Good outsourcers will have experience with most major platforms and will know which is both best for your operation and will offer more in the long-term.
Industry norms and trends
Importantly for a growing team, outsourcers know where the CS industry is going – what advances to expect in the coming years, and how to prepare to take advantage of them.
Smaller teams will struggle to gain that perspective, unless you’re ready to hire a leading industry name to build your team from the get-go. If you’re dedicated to keeping your CS in-house you would be able to hire professionals who’ll help you get a team trained and set-up as an outsourcer, but the cost involved would be much higher.
Customers expect you to be available on their favourite channel whenever they try to contact you. Before work, after work, when they can’t sleep in the middle of the night. They have constant access to messaging, emails, and calls, and they expect you to be there too.
A good outsourcer will have experience with all channels customers expect, and they’ll be able to guide you on the best way to cover those channels.
For example, handling emails in outlook and social media messages in their native platform isn’t effective at scale. A team of 10+ people can’t be sure who’s responsible for replying to a contact, potentially leading to duplicated responses or missed messages. So outsourcers will use a communication platform instead that allows them to cover them all. They’ll already know the advantages and disadvantages of each, and can recommend the one that best meets your needs.
They will also be able to cover all the hours a customer service team needs to offer. We recommend 24/7 service. You’ll meet customers’ expectation of always being online and beat your competitions’ availability - too few companies have recognised the importance of having CS constantly accessible.
At the very least, customers expect you to be available for 71 hours in a week. That’s 31 hours longer than a 9-5 Monday-Friday service. In this case you can use outsourcers in 2 different ways:
- as an add-on to your core CS team to cover unsocial hours your in-house team would like to avoid
- as a provider of all your CS labour, 24/7/365
Whilst your customer base is still small, it might seem to make sense to ask your team to take time out of their day to manage the service requests coming in. But a colleague taking an hour a day to cover customer service means 32 days’ worth of time is lost over the course of a year. That’s a lot.
Outsourcing customer service lets your team focus on their area of expertise. They get to spend more time in a role they enjoy, and they don’t suffer burnout after trying to hit their usual targets with less time available.
Create an efficient operation when you start so you aren’t left trying to tackle problems when you’ve grown to a point where they become harder to face.
An outsourcer is also in a much better position to increase and decrease the amount of resource they have available as contact volumes change. They save you the cost of recruitment in preparation for peak, the stress on your team as they handle bursts of messages during busy periods, and the heartache of reducing team size when contacts start to slow down.
How to avoid the disadvantages of outsourced customer service
Protecting yourself from a bad outsourcer is as simple as making sure you ask the right questions and talking to as many outsourcers as you can. Until you’ve put your signature on a contract you haven’t committed yourself to anything, so you’re free to talk to as many suppliers as you like.
From our experience this is the largest concern our partners have when looking for an outsourcer. How can they guarantee their customer experience won’t suffer? That comes from a general expectation that lower cost means lower quality. Anyone who’s shopped at Aldi can tell you that’s not always true.
So how do you separate the best from the rest?
- Mystery shop – contact one of their current clients as a customer to sample their CS first hand
- Quality monitoring – ask for a run-through of how they assess quality, how frequent their checks are, and the standards they expect advisors to meet
- Incentives – how do they encourage advisors to provide the best service they can? Do they have a reward scheme or a bonus structure?
Another stigma outsourcing struggles with is a Ryanair-style approach to pricing – everything is a paid add-on. Get an understanding of what they offer in their quote, what they charge extra for (e.g. holiday pay), and what, if any, additional service they offer on top of pure contact handling.
As a starting point, find out which (if any) of the below are included:
- Supervisor costs
- Holiday pay
- Bank holiday cover
- Quality monitoring
- Channels (is telephony extra?)
Outsourcing your customer service gives your team the free reign they need to help your company grow whilst your current customers are looked after by professionals. It reduces costs thanks to the scale of their operation, and you’ll have access to emerging technologies and strategies thanks to their continuous drive for efficiency. Customer service outsourcing doesn’t suck when you pick the right outsourcer.