The world of customer care is changing - rapidly.
More than 65% of people have higher expectations for customer service today than they did three to five years ago. Add to that the increasing demand for omnichannel brand communications, and the need for businesses to evolve the way they interact with patrons has never been clearer.
And many are feeling the pinch. In fact, over 40% of US customer service leaders have seen a fall in service quality, first response times and agent productivity in the years following COVID.
The need to keep up with the industry’s seismic shift has resulted in businesses choosing to outsource their customer service, handing over the responsibility to a third-party service provider.
In this article, we explore the core benefits of customer service outsourcing and how it can help businesses scale their interactions and increase consumer satisfaction.
What is customer service outsourcing?
Customer service outsourcing is the process of delegating some or all of your customer support operations to a third-party vendor or contact center. Rather than managing these responsibilities in-house, many companies partner with a specialist provider with the expertise, resources and infrastructure to handle support requests at scale.
Traditionally, customer service outsourcing just meant routing a company’s phone line to a call center. Now, it can involve redirecting the entire range of support channels, including email, live chat, social media and more. This helps businesses provide truly omnichannel assistance – often without the constraints of time zones or geographical boundaries.
Outsourcing is not confined to businesses looking to improve performance or cut costs, either. It’s a tried-and-tested method for scaling quickly and meeting customer needs in challenging situations. Businesses often look to outsource due to:
Product or service seasonality
Sudden surges in support requests
Rising agent attrition
Expansion into new markets
Why should businesses outsource their customer care?
Successful customer service in the modern business landscape demands immediacy, personalization and convenience. If that isn’t provided, or customers feel their time has been wasted, they’ll take their business elsewhere – or worse, air their grievances on forums, social media or peer-to-peer review sites. This has a direct impact on revenue: 50% of consumers will switch to a competitor after one “bad” experience. 80% will switch to a competitor after more than one.
With this in mind, businesses often turn to outsourcing out of necessity – not choice. They need to scale quickly to protect revenue, avoid complaint escalation and loss of business. Internal resources are finite; small support teams can struggle to meet demand, causing long customer wait times, escalation and in certain situations, agent attrition.
So what are the benefits of outsourcing customer service?
Technology and experience
By 2024, customer service software revenue is likely to reach $91.7 billion. At the current rate of innovation, maintaining a “cutting-edge” customer care tech stack is nearly impossible. Equally, there is an abundance of new softwares entering the market each year. This makes learning the difference between a “good tool” and the “right tool” cost-prohibitive, time-consuming and a serious drain on agent productivity.
A quality customer service partner will already have access to market-leading consumer care technology, and the experts to manage it. With a partner like this, businesses can build an optimized, tailored tech stack to personalize experiences and serve customers more efficiently, based on real industry application. Not only does this reduce the teething pains of constant tech onboarding, it also saves businesses from expensive upfront purchases or long-term software-as-a-service (SAAS) relationships.
Hiring and specialized workforce
Identifying the right talent to serve customers is no small feat. To meet evolving customer expectations, service agents need to be experienced and thoroughly knowledgeable about their brand, product or service. In the current hiring market that’s a premium, especially if recruiting for agents specializing in niches like fraud, finance or tech support.
With a quality outsourced partner, businesses access a specialized workforce with experience handling customers across a variety of industries, support initiatives and contact channels. This creates assuredness and flexibility, as companies aren’t limited by the expertise of one person. Instead, they have a skilled, seasoned team on-hand who can be onboarded quickly to deliver customer interactions effectively and on-brand.
Retaining support agents is one of the toughest challenges for businesses right now. In fact, 73% of contact center leaders cited agent turnover as the most significant problem facing their operations. In recent years, attrition rates for companies with fewer than 1,000 agents has risen to 34%. This grows to 50% for those with 5,000 agents or more.
Outsourcing offers some certainty in a testing retention environment. It softens the blow of attrition because businesses no longer have a single point of failure in their support team. If an agent leaves an outsourcer, they can usually shift resources to offer an immediate replacement, preventing any real downtime. Equally, with no retention challenges, businesses don’t have to handle repetitive training and onboarding cycles. Instead, they can invest this capital into other key areas of growth.
Managing an in-house customer service team across multiple international locations can be expensive and logistically complex. Catering to foreign clientele comes with its own set of challenges, the most notable being language barriers, time zones and the risk of cultural insensitivity.
Without experience recruiting and deploying into international markets, businesses can spend months hiring for the right team – delaying GTM and drawing focus from other areas of business. By outsourcing customer service to a global partner, businesses can bridge geographical gaps and overcome language and cultural blindspots within their teams. Many partners will employ multilingual teams in NA, APAC and EMEA, enabling their clients to serve consistent, high-quality service regardless of where they are headquartered. They can mobilize quickly too.
The quality of agent training is directly responsible for the experience customers receive when they raise their hands for support. In businesses without training teams, resources and processes in place, the responsibility of onboarding new team members is often handed over to the longest-serving agent. That’s rarely efficient or effective, as legacy tactics can be inherited without any real push for improvement. New agents simply adopt practices that are already in use.
By working with an outsourced partner, businesses gain the ability to launch or scale a program quickly. A capable third party actively builds processes to ramp agents at a faster pace, using computer-based training and other methodologies. They’ll also have experience delivering training across a wide range of industries and verticals, and will know where processes can be streamlined. For tech companies, ramp can be as short as 1-2 weeks with an outsourced customer service partner.
Against the ever-evolving nature of consumer demands, agility is key to actively improving CSAT scores and driving repeat business. An ability to sense, learn, respond and adapt is imperative. However, very few businesses have the analytics in play to monitor trends in customer behavior or identify the successes and failings of their operations.
Every vendor has an obligation to prove their value. They will actively track the metrics that matter most to their performance, equipping clients with actionable insights that inform decision-making and service optimization. With this new visibility, businesses can actively hear what their customers are telling them, and refine marketing and content efforts to improve self-service opportunities – something 86% of customers now expect.
Is customer service outsourcing right for your business?
Customer service outsourcing is not about taking shortcuts. It’s about discovering a solution that helps your business fully meet its customers’ needs, regardless of the current internal situation or market challenges.
Like any business decision, you’ll need to consider your intentions, and critically review whether your business has the service quality, customer satisfaction or staffing to service those goals.
This means more than reviewing cost-reduction opportunities: Outsourcing shouldn’t equate to lowering service quality in favor of lower costs. Customers switching companies due to poor service costs U.S companies an estimated $1.6 trillion. Businesses who choose to cut corners ultimately pay the price.
If you’re convinced that outsourcing is the right route for your business, here are some crucial considerations to take before signing on the dotted line.
Look for a partner, not a vendor:
An outsourcer is an extension of your business. While you’ll rarely be able to prove honesty and transparency from an initial discovery call, it’s worth reviewing the softwares and analytics the vendor has in place for client reporting. A great partner will be open and bring insights and recommendations that aren’t in the interest of their own revenue, but your results and your business. They should care about your bottom line as much as their own.
Don’t lose control:
Like any business process outsourcing (BPO) initiative, handing over your customer services to a third party means losing some control. You’re entrusting your customers and brand to another company. They will be representing you. Take the time to find a partner that can do things your way; replicating your brand voice and service expectations to ensure a consistent experience for your customers.
It’s critical to manage your expectations. Many businesses outsource their processes and assume that they will see immediate savings. These are usually most prominent in year two. The first year of outsourcing will be impacted by transition costs and travel expenses that will offset savings. Expect a good provider to supply a defined roadmap concerning people, processes and technology. You may lift and shift initially, but true cost savings come with process optimization, and this takes time to fine tune.
Introducing Harte Hanks
For over 40 years, Harte Hanks has helped businesses of all sizes overhaul their customer service processes. With our accomplished support agent network and agile deployment, we give businesses the resources to serve buyers confidently. Our services increase first-time resolutions and lower the cost per interaction across any channel, at any scale.
Connect with us today
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.