To Outsource Customer Service or Keep It Internally?

At a certain stage of development, most companies with extensive customer service infrastructure begin to think about the efficiency of their customer support departments. One of the trends of recent years is to have a third-party to handle part of the customer care operations or even cover all the steps of the customer experience journey. 

They try to estimate whether it would be more effective to outsource it or to keep it inside.

While making a decision TOP manager responsible for Customer Service and Support comes to specific questions:

• Is it worth losing control and high customer satisfaction metrics to save some budgets?
• What types of interactions with the customer could be transferred to outsourcing?
• What metrics need to be created to understand external service providers' efficiency?
• Should it be international outsourcing or a domestic vendor?

These questions are only part of a complicated strategy-level issue. Whether to keep everything in-house or to trust some part of the customer journey to an external staff can define overall satisfaction with your product or service. And this, in turn, is on the company's profit level. So what are the main advantages of outsourced customer support?

1. Of course, on the surface, it is cost-effective.

Deloitte Survey in 2020 showed that cost reduction is the number-one reason for going to outsource. Besides the economy of headcount in customer support and service departments, it can save money on such things as:

• Call center infrastructure and equipment;
• Hiring, training, and onboarding resources;
• Less managing and supervisor resources would be spent on routine customer care operations

2. High-quality customer service personnel

Delivery of best-in-class service for the clients is a target for any business as it helps to grow earnings, which means that the company which sells outsourced customer service as the main product would concentrate most of the efforts on its quality and constant development. We can also assume that they have more advanced hiring strategies and training methodologies.

3. Focus on the core business activities

Getting some part of business workflows done by external service providers means that you can direct the focus and resources on the fundamental tasks of your business.

4. Faster scaling, better availability

Any successful business grows. And with it, there is a rise in the burden on Customer Service. It is much easier to expand accessibility to contact center representatives outside. It can be 24/7 full support without any time or resource limitations. You can choose how many dedicated or shared agents should cover your needs at different stages of the business. The speed of the changes can also become better. But having your Customer Service rely on outsourcing can bring drawbacks: 1. Privacy issue

One important thing that can be crucial for the success of any customer engagement is personal data. Nowadays, people are sensitive to any leak of their personal information such as an address, banking details, family information, mobile numbers, etc. And when the company decides to give some part of customer support to third-party vendors, it is always an issue of data access. Lack of information can be an issue for the high-quality service, but leaking it to untrusted people can create even more damage. To solve this dilemma, many companies develop special contracts for external staff and divide the data access level.

2. Insufficient understanding of the company's business and values

Even a highly qualified outsourced customer center agent cannot be an expert in your business. External executives don't share your philosophy and core values and don't respect your product as you do. So it is naive to expect they will be as inspired as your employees. And they won't spend a lot of time researching and learning all the aspects of your industry.

3. The larger chain, the more complex communication 

There is a transaction costs theory which means that every step of interaction or negotiation of two sides can cause some loss of important information. So every time you try to deliver a message to one of the sides of the process, it is a risk that it will be misunderstood. That is why it is harder to stay on the same page in every matter when additional elements of the chain are joining. How do you measure whether your decision to switch to outsourcing was successful?

The mentioned pros and cons are more hypothetical until we check this in practice. But really, how to understand that the decision was made right? 

These are a few key points to evaluate the success or failure of outsourcing customer centers:

• Check customer satisfaction. Is it getting better or worse?
• What is a first call resolution rate?
• Listen to the recordings or better apply AI analysis for all the conversations. Do you have a lot of negative comments from the customers? 

We advise using AI instruments such as Ender Turing conversation intelligence solution for that purpose.

• Check the social media feedback. Are the customers happy with the changes? What are the main reasons for dislikes? 
• Go to your sales metrics. It is sometimes unclear, but bad customer service can heavily impact sales, especially the second purchase or second deal rate. Don't forget to check the lead-to-sale conversion. The tricky thing is that Customer Experience departments don't usually have sales KPIs, but their work can influence them.

In this constantly changing environment, any business should be flexible. Outsourcing is one of the ways to keep the speed of business growth without losing quality. But every case is unique and should be solved with accuracy and preparation.