The Pros and Cons of Outsourced Customer Service

What is outsourced customer service?

Outsourced customer service is when management transfers customer-facing communication channels to a third-party service provider. Businesses typically outsource customer service through a call center; it maintains agents trained to handle an organization’s incoming calls.

Weighing whether you should reassign your customer service to a third party is complex and causes unease for many business owners. After all, you want to ensure your business continues providing quality customer service to meet consumer demand.

What are the pros of outsourced customer service?

The ability to outsource customer service for small businesses can be highly beneficial. Here are some of the pros of outsourcing:

• Outsourced customer service reduces workload. Small business owners and staff typically wear many hats. Responding to customer phone calls and emails distracts from more profitable activities like sales. It can even cause stress and overwhelm. Outsourcing customer service allows everyone to focus on their jobs and minimize workplace stress and employee burnout.
• Outsourced customer service can save money. When you hire contract workers, including call center employees, you don’t pay a fixed salary or employee benefits. Additionally, you don’t have to furnish customer service reps with equipment. A computer and all the necessary software could cost upward of $1,000. Plus, a good headset can cost more than $75 — much more if it’s wireless. When you factor in office space, a desk, chair, additional monitor and more, you could spend $5,000 on equipment for a single rep.
• Outsourced customer service provides after-hours coverage. Many consumers expect to reach companies’ customer service departments during off-hours. Call center staff can be available 24/7, providing efficient customer service when your customers need it.
• Outsourced customer service can provide multilingual service. Many businesses have customer bases that speak languages other than English. Outsourced customer service platforms give you better access to reps who speak multiple languages. As a result, your customers will feel more confident doing business with your company; they’ll know their questions will be answered properly without communication barriers.
• Outsourced customer service helps your company grow. Many businesses pursue growth through outsourcing. In particular, outsourcing customer service fuels growth by allowing you to scale rapidly while still addressing customer concerns promptly. Without outsourcing, you’d have to take time to recruit, hire, and train service reps and update your infrastructure (phone lines, computer terminals, etc.). With outsourced customer service, there’s no need to invest in capital improvements — you can accommodate additional customer support instantly.
• Outsourced customer service can bring you excellent reps. Outsourcing customer service gives you instant access to highly trained, experienced reps. There’s an initial onboarding process when you hire an outsourcing partner. But, familiarizing it with your needs, products and services is a one-time effort. After training the provider, it will handle future rep training. Its employees likely already have general customer service training and experience. So, they’ll start with a solid foundation of customer support protocol.
• Outsourcing customer service allows you to scale down when needed. Say you made significant product quality improvements and notice a drop in customer service inquiries. With an outsourced provider, reducing the number of reps handling your account is as simple as making a phone call.
• Outsourcing customer service means spending less on infrastructure. Outsourced customer service companies utilize sophisticated technology and processes. They invest in the latest equipment because it behooves them to stay on the cutting edge and remain competitive with rival businesses. Your business won’t have to make such investments or spend time researching and learning about new support technology. Plus, your customers will benefit from it.
• Outsourcing customer service frees your team to focus on business goals. By assuming the large, daunting task of handling customer service, your outsourcing partner allows your team to spend more resources on improving sales and marketing. Thus, creating a better product or service.

“Outsourcing helps you save resources and create better coverage,” noted Joe Wilson, senior career advisor at MintResume. “If your company operates on an international level, it would be easier to hire a local call center office instead of forcing an in-house team to learn a foreign language. The bigger the audience you cover, the bigger chance you have to satisfy your customers.”

What are the cons of outsourced customer service?

As discussed, outsourcing customer service offers some excellent benefits. However, before choosing a provider, understand the cons and address them with any outsourcing partner you consider. The cons are:

• Outsourced customer service may reduce customer satisfaction. Many business owners worry they’ll lose customers if they switch to a call center or answering service. However, to address this concern, business owners can scrutinize the provider’s track record and references to ensure they use one of the best answering services or call centers.
• Outsourced customer service reps aren’t familiar with your company. Outsourced employees may not be as knowledgeable about your company, products and services as an in-house team; they’re not in the trenches with you daily. To overcome this concern, maintain clear and consistent communication with your outsourced customer service team. Update your provider on new product launches, price changes, policies and more. For more advanced services, hire dedicated agents who focus only on your business — learning the ins and outs of everything you do.
• Your business may not be an outsourced provider’s top priority. A call center rep may handle a customer service inquiry for a clothing retailer one minute and a call for home loans the next. Of course you’d like outsourced reps to be passionate about your company and prioritize your calls. However, it’s not a guarantee if they work for multiple clients. Again, hiring more expensive, dedicated agents could alleviate this problem. But, it will cost you.
• Outsourced customer service may present security concerns. The very nature of some businesses involves the exchange of personal info, such as credit card numbers, names and addresses. This information must be secure. If this is the case with your business, interview call centers about their cybersecurity and risk management practices. However, many call centers have layers of protection in place to ensure your customers’ data remains private and safe.

Are there outsourced customer service companies in the U.S.?

There are highly recommended outsourced customer service companies in the U.S. The following companies are all based in the U.S. They can help your business with its outsourced customer service needs:

• VoiceNation
• Helpware
• AnswerFirst
• Sound Telecom
• Complete Call Solutions
• Aucera
• Foundever
• Influx
• Skycom
• Arise

What do I need to know before hiring outsourced customer service providers?

When evaluating your outsourcing partner, learn about their expertise, quality control, security and training. Consider the following questions:

1. What is the outsourced customer service provider’s expertise? Has the call center worked in your industry before? Is it familiar with regulations in your industry and the particular concerns consumers have? If it hasn’t worked with other companies in your industry, consider how that might affect service. Hire a provider with experience in your industry to deter any potential issues a lack of expertise may cause.
2. How does the outsourced customer service provider maintain quality control? Ask call center companies how their agents deal with angry customers and keep them happy. Additionally, you should be able to maintain visibility into their customer service with frequent reports and call recordings you can monitor. Ask companies what reports they provide and whether they offer actual recorded calls that you can listen to.
3. What are the outsourced customer service provider’s security measures? To protect your business from a data breach, you must understand your provider’s security protocols. Its inbound and outbound networks must be secure. Also, ask who manages their network and who can access it.
4. How does the outsourced customer service provider hire and train reps? Some businesses require specialists to handle customer service inquiries. Ask about any potential provider’s hiring process and training program. How does it keep up with technology as it evolves?

How much does it cost to outsource a call center?

The cost of outsourcing your customer service to a third party depends on the services you need. Basic answering services cost $1 to $1.50 per minute plus a monthly fee between $38 and $300 or more. Monthly fees typically include a fixed number of minutes. Dedicated call center agents (i.e., professionals who work exclusively on behalf of your company) can cost from $25 to $50 per hour.

“Outsourced call center costs are made up of several items such as … employee training, IT infrastructure expenses, incoming info analytics, agents’ payments, maintaining administrative resources, office rent and technical needs, etc.,” Wilson explained.

The complexity and immediacy of your needs also play a role. “Cost[s] also depend on whether there is a team ready to take on a project right away or if it will be created anew, according to specific requirements?” Wilson noted. “In the second case, an initial preparatory stage is needed, during which the suitable staff has to be recruited.”

You must also determine whether you need live answering and message-taking services. The more cost-effective option — shared agents — can handle those functions. The more expensive option — dedicated agents — is needed for advanced tasks. Such tasks include outbound calling campaigns, complaint management and customer win-back services.

Outsourcing customer service is a big decision

Outsourcing customer service to a third-party provider is a big decision with broad ramifications. However, it may be the right choice to help your business grow, maintain operations and provide quality customer service.

Choose a provider you’re comfortable with that can address your customers’ most pressing needs expertly and efficiently.

Jennifer Dublino contributed to this article. Source interviews were conducted for a previous version of this article.