At a time when customer experience actively outranks product and price in consumer priorities, investing in customer support has never been more important.
This seismic shift has not been smooth sailing for most. Many firms are already grappling with the concept of our “new normal,” where speed, responsiveness and flexibility are placed on a pedestal. National CSAT fell to 73.1 in 2022 according to the American Customer Index – its lowest in ten years.
Amid the piling pressure, businesses have looked increasingly to take their customer care functions “out of house” to both survive and stay ahead in the game. It’s a model that has become incredibly popular. In fact, the outsourced customer services industry is poised to exceed $110 billion by 2030.
Identifying the right actions and potential partners for outsourcing is not a decision to be taken lightly. In this article, we explore three key stages for customer service outsourcing and selecting a partner that drives CSAT and ROI.
Why do businesses outsource customer service?
Businesses have traditionally outsourced out of necessity rather than desire. According to Forbes, customers switching companies due to poor service costs U.S. businesses a total of $1.6 trillion. As buyers continue to expect more, and businesses grapple to serve their demands, the stakes couldn’t be any higher.
This is no longer a grudge most firms are willing to bear. While AI-infused self-service channels solve many of the modern challenges linked to handling inbound support requests, very few meet the desired mark. In fact, only 10% of newly built digital platforms are fully adopted by customers, according to Gartner. Add rising attrition and turnover rates to the mix, and it’s easy to see why outsourcing has become the chosen path for aspiring firms.
How to outsource customer support
Like any business process outsourcing (BPO) initiative, relying on a third party to handle customer interactions comes with a degree of risk. It demands careful planning, meticulous partner selection and relentless vetting to ensure a seamless transition.
Businesses looking to implement a structured outsourcing program should consider three key phases: readiness, expectation-setting and partner selection.
Phase one: Outsourcing readiness
Customer service outsourcing demands significant transformation to a firm’s structure, culture and operations. Leaders need to prepare for substantial change management, and proactively ready their business for the impact on employees and customers. This involves clearly justifying the reasons, advantages and potential risks of BPO to existing teams and stakeholders for mutual buy-in. Adequate training, support and feedback are also essential for employees who will engage with a vendor or transition into different roles.
Equally, customer service works best when processes are well-defined, repeatable and measurable. While successful companies have learned to do this consistently in-house, many lack the skills to separate processes and deploy them into outsourced teams. Leaders need to audit and analyze current processes and create structured resources to accelerate ramp and drive more focused brand delivery. Otherwise, they risk losing control, trusting their partner to reinvent the wheel – potentially ineffectively and off-brand.
Phase two: Understanding & expectations
The behaviors, traits and characteristics of outsourced customer support agents directly influence customer loyalty. Outsourcing, therefore, requires proactive monitoring and evaluation to govern delivery and preserve brand reputation. Prior to speaking with prospective vendors, leaders need to define responsibilities, targets and metrics to set expectations for partners and measure their commitment to business objectives.
Typical BPO contracts contain specific service metrics that focus on activity and efficiency: average handle time (AHT), average speed of answer (ASA) and abandon rate (ABN). While it’s true that outsourcers can deliver cost savings by prioritizing speed, there’s a balance to strike. As Gartner argues, too much emphasis on managing “numbers” instead of people can promote the wrong behaviors. Service level agreements (SLAs) should also define qualitative behavioral expectations to ensure brand delivery and CS execution align with wider business strategies.
To truly realize the benefits of outsourcing, leaders must:
Implement a feedback mechanism to measure, review and improve their outsourced services.
Maintain brand equity by clearly defining customer service activities that are critical to CX.
Set actionable KPIs and metrics to judge performance based on activities, efficiency and CSAT.
Phase three: Choosing the right partner
It is imperative that businesses extensively review the type of BPO relationship they are seeking. Without thorough vetting and evaluation, firms risk agreeing on long-term contracts with poorly suited vendors that are unable to deliver to their goals. This type of relationship may still protect businesses from increasing labor, skyrocketing costs and expensive hiring – but usually at the expense of customer relationships. Considering 55% of customers abandon a brand after a single poor experience, entrusting a brand to a third party is not something that should be actioned half-heartedly.
When selecting a partner, businesses should consider these critical factors:
No different to hiring your own internal team, company culture is crucial to outsourcing success. Many businesses are quick to detach themselves from their own values by settling on the cheapest vendor, without any alignment with their mission statement. Partnering with a vendor whose cultural structure aligns with your company ensures that they are able to work collaboratively with your existing leaders and employees, leading to reduced friction and greater visibility.
Outsourcing as a concept is changing from “make it run” to “make change happen.” Leaders should seek providers that can genuinely facilitate business improvement with greater flexibility, technology and scale. Often in the customer support conversation, what’s considered “best” for the vendor is rarely best for the client – if volumes are down, this requires fewer resources, and consequently, less investment. It is critical that businesses find a partner that works in their best interests and as an extension of their team.
As businesses grow, so do their BPO pricing and package options. For smaller firms, outcome-based contracting may still be a distant future, with most vendors relying on an FTE or hourly rate model. To minimize cost, some providers will offer the flexibility to choose from a range of options, including automation, offshoring and continual cost reduction through process optimization. Leaders should evaluate how far their budget can stretch to deliver an improved process and facilitate growth in the direction they seek.
Building a successful partnership requires reciprocation: To have a partner, you must be a partner. Many challenges in partnerships stem from a hesitancy to trust one another, or more precisely, to establish a mutually agreeable level of trust. Leaders should provide robust, meticulously outlined guidelines in contracts, emphasizing risk management and cost control – and work closely with outsourced partners to deliver these results. An outsourced partner should complement, not compete with, a brand’s internal team.
Final thoughts
In a world where customer satisfaction and loyalty are paramount, customer service is not merely a function – it’s a strategic imperative. When executed thoughtfully and collaboratively with the right partner, customer service outsourcing can elevate your brand and help you navigate the ever-changing dynamics of the customer experience landscape. With the right approach, your outsourcing venture can become a seamless extension of your team, driving both customer satisfaction and business growth.
Outsourcing your support services to Harte Hanks means continually staying ahead of the customer curve. Combining our network of accomplished support agents with true agile deployment, we give you the resources to serve buyers with confidence — increasing first-time resolutions, keeping costs low and unlocking breakthrough levels of customer advocacy.
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Ben Chacko is the managing director of customer care for Harte Hanks, a leading global customer experience company that provides CX strategy, data-driven analytics, and actionable insights combined with seamless program execution to better understand, attract, and engage customers.
