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There is nothing more frustrating in customer service than conversing with an AI for support. There is still a need for human interactivity. However, the amount of calls and emails can become overwhelming. This will eventually lead to customer dissatisfaction and loss of revenues. Outsourcing customer support can be a great way to improve your customer service, reduce costs, and scale your business. But there are a few things you need to know before you get started.
Outsourcing customer support can be a great way to improve your customer service, reduce costs, and scale your business. But there are a few things you need to know before you get started.
In this article, we’ll cover everything you need to know about outsourcing customer support. Including the pros and cons, how to choose a provider, and how to manage your outsourced team.
If you want to know more and bring positive change to your business. Then let’s dive in.
Who should outsource customer support?
Any business of any size can benefit from outsourcing customer support, especially if:
- You have a high volume of customer inquiries
- You need to provide support outside of regular business hours
- You don’t have the expertise or resources to manage your own customer support team
If you’re considering outsourcing customer support, this article is for you. We’ll cover everything you need to know to make the right decision for your business.
Also, Outsourcing customer support agents can be added to your original team as a backup. Many entrepreneurs have a hard time finding quality employees to meet their needs. You might already be satisfied with their work, but you know the upcoming workload might become unsustainable.
Who should in-house customer support?
There are a number of reasons why a company might not use an outsourcing customer support service. Some of the most common reasons include:
- Loss of control over the customer experience. When a company outsources its customer support, it is essentially giving up some control over how its customers are treated. This can be risky, especially for businesses that rely on customer satisfaction for their success.
- Misalignment with company culture and processes. It can be difficult to find an outsourcing partner that shares the same company culture and values as your business. This can lead to misalignment in how customer support is provided, which can frustrate customers and damage your brand reputation.
- Longer lines of communication and the need for supervisory staff. Communicating with an outsourced customer support team can be more challenging than communicating with an in-house team. This is because there may be language barriers, time zone differences, and other factors to consider. Additionally, companies that outsource their customer support often need to hire supervisory staff to oversee the outsourced team and ensure that they are meeting the company’s standards.
- Security concerns. Companies that outsource their customer support may need to share confidential data with their outsourcing partner. This raises security concerns, especially if the outsourcing partner is located in a country with different data protection laws.
- Cost. While outsourcing customer support can be a cost-saving measure, it is important to factor in all of the costs involved, such as training costs, supervisory costs, and travel costs.
In addition to these general reasons, there are also some specific reasons why certain companies might not outsource their customer support. For example, companies that sell complex products or services may need to provide their customers with a high level of technical support. This can be difficult to do with an outsourced team, as it may require the customer support representatives to have a deep understanding of the company’s products and services. Additionally, companies that operate in highly regulated industries may need to keep their customer support in-house in order to comply with regulations.
Improved customer satisfaction with outsourcing customer support:
- Improved customer satisfaction
- Reduced costs
- Scalability
- Access to expertise and experience
- 24/7 support
- Where to Outsource
In this section, we will educate you on each of these benefits in more detail.
Improved customer satisfaction
One of the biggest benefits of outsourcing customer support is that it can lead to improved customer satisfaction. The providers have a team of experienced and trained agents. They are dedicated to providing excellent customer service.
Also, outsourced customer support providers often have access to the latest technology and tools. Which can help them to resolve customer problems.
However, there is an important distinction to be made between customer service and customer satisfaction. Most companies aim to provide good customer support. Great companies aim to provide a good customer experience.
Subsequently, keep a record of their performance over a short period. Make sure that employees are guided with metrics :
- Number of cases solved.
- Assurance quality metric (For example the Stars metric for hotels)
- Attendance
- Cost/Case
Ask for a report of those metrics and make sure that they improve their metrics over time. Do this until you are really satisfied with their performance. Then Ask for quarterly reports or bi-annual reports depending on your situation.
Reduce costs
Another major benefit of outsourcing customer support is that it can help to reduce costs. This is because outsourced customer support providers have a lower overhead cost. In comparison with an in-house customer support team.
Also, outsourced customer support providers can help reduce costs. You can avoid hiring, training, and managing your own customer support team.
The competitive space will ensure the best prices and better quality.
Percentage of businesses that outsource customer support
According to a 2023 survey by Clutch, 54% of all companies rely on third-party vendors for some aspect of their customer service operations. This number is even higher for small businesses, with 24% of small businesses outsourcing all of their customer service to external teams.
Average cost savings from outsourcing customer support
The amount of money that businesses can save by outsourcing customer support varies depending on several factors, including the size and complexity of the business, the country where the customer support is outsourced to, and the scope of outsourced services. However, most studies have found that businesses can achieve cost savings of 20-60% by outsourcing customer support.
For example, a 2023 study by Deloitte found that companies can achieve cost savings ranging from 40% to 60% by outsourcing customer service to countries like India or the Philippines, where labor costs are comparatively lower.
Another study, by McKinsey, found that companies that outsourced customer service achieved a 10% to 30% reduction in handling time and a 20% to 40% increase in first-call resolution rates, resulting in significant cost savings.
Source: Link
Scalability
Outsourcing customer support can also help you to scale your business. This is because outsourced customer support providers can adjust their staffing levels. They can adapt to meet your changing needs.
For example, if you experience a seasonal surge in customer inquiries. You can ask your outsourced customer support provider to increase their staffing levels.
Also, it frees up your time and resources to focus on other areas of your business. When you outsource customer support, you are no longer responsible for managing and supporting your own customer service team. This frees up your time and resources to focus on other important areas of your business, such as product development, marketing, and sales.
Here is a list of 10 S&P 500 companies that outsource their customer support:
- American Express (AXP)
- AT&T (T)
- Bank of America (BAC)
- Citigroup (C)
- Comcast (CMCSA)
- Delta Air Lines (DAL)
- General Electric (GE)
- Home Depot (HD)
- Intel (INTC)
- Microsoft (MSFT)
- Target (TGT)
- Verizon Communications (VZ)
These companies outsource their customer support to a variety of countries, including India, the Philippines, and Mexico. The reasons for outsourcing customer support include reducing costs, improving efficiency, and providing 24/7 support to customers around the world.
Access to expertise and experience
Outsourcing customer support gives you access to new expertise and knowledge. This is very valuable for your company.
Most importantly, your support team will be better and more efficient. Leaving you with fewer problems and more satisfied customers.
You should also encourage knowledge sharing between agents. This will ensure a smooth and consistent customer support experience.
24/7 support
If your business operates 24/7, you may need to provide customer support 24/7. This can be difficult and expensive to do with an in-house customer support team.
On the other hand, outsourced customer support providers can provide 24/7 support without any additional cost. They often have agents located in different time zones around the world.
Here’s a link to understand why 24/7 support is so important:
https://www.kustomer.com/blog/24-7-customer-service/
Where to outsource
There are call centers all over the world. All of them offer a variety of advantages. Cost, language skills (English-speaking countries), and service quality are important factors. Here’s a table showing India, the Philippines, and Canada. Three different Countries with their advantages and disadvantages. I hope it will help in your research!
| Country | Average cost per case solved | Average service quality | Language skills | Cultural fit | Time zone | Infrastructure |
|---|---|---|---|---|---|---|
| India | $10 | 4.5/5 | English is widely spoken, but there can be accents and grammar errors | India has a rich and diverse culture, but it can be different from Western cultures | 10.5 hours ahead of UTC | Infrastructure is developing, but there can be power outages and other interruptions |
| Philippines | $15 | 4.7/5 | English is widely spoken, with a high level of proficiency | The Philippines has a Western-influenced culture, which can make it a good fit for Western companies | 8 hours ahead of UTC | Infrastructure is well-developed, with reliable telecommunications and power |
| Canada | $20 | 4.8/5 | English is the official language | Canada has a multicultural society, which can make it a good fit for companies with customers from all over the world | 4 hours ahead of UTC | Infrastructure is well-developed, with reliable telecommunications and power |
Conclusion
In short, Outsourcing customer support can help small businesses to improve customer satisfaction by providing 24/7 support and access to a team of experienced customer support representatives. It helps to reduce costs, improve the quality of service, and scale your business.
- They improved customer satisfaction by providing a team of experienced and trained agents. Also, they are dedicated to providing excellent customer service.
- Outsourcing customer support can also help to reduce costs. They have a lower overhead cost than in-house customer support teams.
- They can scale your business faster. The outsourced providers can adjust their staffing levels to meet your changing needs. They can also bring more experience and knowledge. This will ensure the efficiency and stability of your customer support team.
- They can also help you by providing 24/7 support without any extra cost.
If you are considering outsourcing customer support. we encourage you to do your research and choose a provider that is a good fit for your business.
A final bit of advice:
Here are a few more important factors you should consider When choosing an outsourced customer support provider:
- Experience: Choose a provider that has experience supporting businesses in your industry.
- Reputation: Read reviews from other customers to get a sense of the provider’s reputation.
- Pricing: Compare the pricing of different providers to find the best deal.
- Services: Make sure that the provider offers the services that you need. Such as 24/7 support and support for many languages.
Follow these tips. They will help you choose the perfect outsourced customer support provider. Which will improve your customer service, reduce costs, and scale your business.
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