Outsourcing Customer Service - 6 Benefits For Your Business
Outsourcing customer service functions offer companies a viable alternative to the challenges many face supporting their customers. Generally, a company will choose to outsource to improve efficiency, reduce costs, improve flexibility, support growth, and focus on its core business. Likewise, depending upon your company situation, you may find that the benefits of outsourcing customer service offer a better solution than trying to manage it solely with your internal resources.
Most companies use a variety of outsourcing in the course of their normal business activities. Basically, outsourcing is the business practice of hiring a party outside a company to perform services that traditionally were performed in-house. Accordingly, more than 54% of US companies already choose to outsource some portion of their customer service functions offshore.
So, let’s discuss the benefits and related factors you should consider before moving forward outsourcing customer service functions of your company.
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Outsourcing Customer Service Overview
As previously mentioned, there are a variety of potential benefits to outsourcing customer service functions for your company. However, before starting down this path, you should ask yourself the most basic of questions: Why are you considering outsourcing?
Outsourcing Customer Service – Why Do It?
How you answer this question, will help guide you in defining what goals you want for your company and what you want from your outsourcing provider. For example your company goals might be:
- Cut Support Costs – How much, over what period of time?
- Free Up Company Staff – How will functional roles be reassigned and measured?
- Improve Customer Satisfaction – What metrics will your company and the outsourcing provider use?
- Increase Customer Retention – How is it currently being measured and where does it need to improve?
So, once you have clearly thought this through, here are some other key areas you should consider as you move forward with your outsourcing customer service provider.
Know Thy Customer
It may sound simplistic, but a company should know its customers better than anyone else. Correspondingly, your customers’ preferences and expectations as to how they choose to interact with your company (telephone, email, chat, social media, etc.) are matters that affect outsourcing customer service and vendor selection. Basically, what is your buyer persona today and where will it be in the future?
Your outsourcing customer service provider must “sound like you” in every communication with your customers, whether it’s the voice on the telephone or written electronically. Basically, it is your company’s responsibility to know your customer’s voices and help your outsourcing service provider talk like you.
Onboarding
Reducing costs is usually the primary factor in outsourcing customer services. Correspondingly, a major saving is outsourcing the hiring and training costs of your in-house staff. So, as part of the onboarding process with your outsourcing provider, you need to ensure that they understand your culture, your customer, and your quality standards and expectations.
Performance Evaluation
Once you have outsourced portions of your customer service functions, you need to consistently evaluate your vendor’s performance. Moreover, the metrics that you measure should be mutually agreed upon and defined in your company’s Service Level Agreement (SLA). Finally, it bears repeating that, just because you’ve outsourced customer service, doesn’t mean that you can forget about it.
It is your company’s job to assure that your outsourcing customer service provider is on the right path to ensure your customer’s happiness.
Open Communication
Outsourcing customer service is a two-way partnership, somewhat like a marriage. So, just as any marriage counselor would recommend, it all starts with open communications.
This means that there should be ongoing discussions with your outsourcing provider about the things that are working, the things that need improving, the things that will be changing like policies, products, and procedures (to avoid surprises), and what you are hearing from your all-important customers. Basically, your outsourcing provider is an extension of your in-house personnel and needs to be treated similarly (basically kept in the loop).
Outsourcing Customer Service – Which Functions?
Customer service provides a direct interaction between the purchaser of a product or service and a representative of the company that is selling it. Generally, companies provide this direct interaction with their customers via call center customer service, either in-house or via a third-party outsourcing provider.
Companies assume this post-sale investment since they understand that good customer service is critical to their long-term business success since it strengthens brand loyalty and leads to future repeat business.
Here are a variety of functions that your company might want to consider as part of your outsourcing customer service strategy:
CUSTOMER SERVICE FUNCTIONS
- TOLL-FREE CUSTOMER CARE
- CROSS-SELL AND UP-SELL PROGRAMS
- CHANGE OF CONTACT INFORMATION
- COMPLAINT RESOLUTION
- LOGISTICS TRACKING
CUSTOMER SERVICE FUNCTIONS
- BILLING INFORMATION
- DEALER LOCATION INQUIRIES
- CONTACT INFORMATION REQUESTS
- FINANCIAL/COLLECTIONS
- ORDER PROCESSING/RETURN
Outsourcing Customer Service Benefits
As mentioned outsourcing customer service offers a variety of potential benefits to your company. Accordingly, based on WHY you choose to outsource and WHAT function(s) you outsource will determine which benefits are most relevant and important to you.
1 – Lower Operational Costs
One of the primary outsourcing customer service benefits is lowering your company’s operational costs. Because your outsourcing provider makes major investments in facilities, equipment, technology, operations and staffing, these costs are amortized across it’s client base over a long-term basis. Conversely, if your company is like most, it does not have the need to incur these large investment costs.
These savings (less support staff, equipment, executives, and workspace) frees up your company’s finances and general resources to strengthen the core areas of your business. Accordingly, this allows your company to increase its budget for key business functions to improve competitiveness, revenue, and profitability.
Your company also benefits by only paying for the customer service functions contracted for. Additionally, these payments are on a transaction, per-hour, or performance basis, allowing visibility, control, and economy.
2 – Enhance Business Focus
If your company is like most, customer service is just part of the business and is rarely a key core competency. Instead of concentrating on product development, marketing, and sales, your company has to divert its limited resources to customer support. So, by outsourcing customer service you can free up company resources to focus on your core growth areas and manage your company more smoothly.
As mentioned, by outsourcing customer service you can apply stronger focus and control over your main business objectives. Conversely, if your company is forced to balance all the different functions of the company this can result in neglect and poor management over time. Finally, outsourcing customer service provides an additional direct management resource of your service operation that you could not provide otherwise.
3 – Scaling
As businesses grow, recruiting, hiring and training of new personnel is often a challenge. Especially this applies if your company maintains an in-house customer service department.
In contrast, an outsourcing customer service provider’s business model is based on serving multiple clients across multiple industries. Consequently, this broad base allows the outsourcing provider flexibility to allocate resources to the changing needs of a business client.
As an example, your company may have customer contacts (telephone, email, chat, social) with changing volumes due to time of day, day of the week, or business season. Meanwhile, your outsourcing provider can hire and schedule personnel to cover these service windows more effectively.
Also your outsourcing customer service provider has the size and staff to ramp up or reduce quickly if your customer contact volumes quickly change.
4 – Industry Knowledge
An outsourcing customer service provider has specialized understanding of services for different industries. Together, their executives and staff have valuable experience and proven strategies that only come from years of experience.
A key outsourcing benefit for your company is the real-world experience gained by dealing with a history of multiple clients. Indeed, you might think of this as trial by fire. Likewise, each client has common business needs, however, each is unique with different expectations, market demands, and customer needs.
Your outsourcing provider has a wealth of experience in service provision including recruitment, people management, training, and data management. Therefore, your company can make use of this knowledge to provide improved service to your customers.
This is especially beneficial for smaller companies that lack the internal resources to handle especially complex customer service projects in-house. For example, your business gains the capacity to meet the workload of larger organizations despite your smaller size and resources.
5 – Expand Customer Reach
If your business deals with global customers or those that expect customer service outside regular business hours, then extended or round-the-clock customer service may be necessary. For example, an eCommerce business needs to provide customer service independent of the geographic location of the customer. Consequently, for many companies, this is challenging or not logistically practical but is a standard offering by an outsourcing provider.
By expanding your customer reach, the interaction with your customers provides the opportunity to strengthen your company brand and loyalty. Also, this helps in your customer retention, future referrals, and sales opportunities.
DISCLOSURE: Nexus Teleservices is a Nearshore Outsourcing Customer Service business provider.
6 – RISK MANAGEMENT & COMPLIANCE
Your company is always at risk, whether from a natural disaster, competitors surprises or compliance with governmental regulations. Unquestionably, using an outsourcing customer service provider can help reduce the overall risk to your company.
Due to their experience with multiple clients, an outsourcing service provider has strong insights on how to avoid risks to your company. So, this makes it easier to prevent risks without having to do it all yourself.
For example, providing customer service from multiple locations reduces the risk of service interruption due to a national disaster. While your outsourcing provider is in contact with your customers, they may do a “soft survey” of your customer base. Basically, this is to identify areas of unmet expectations that your competitors can leverage. Finally, your outsourcing provider has strict control guidelines for handling your customer’s data to avoid fraud and ensure security compliance.
Outsourcing Customer Service Conclusion
Outsourcing customer service helps companies to improve efficiency, reduce costs, improve flexibility, support growth and focus on their core business. Also, they strengthen customer relations and brand loyalty, lower service costs, reduce management stress, and a company’s business risk.
Please call us at (888) 339-6699 to discuss how our call center customer services will serve your business needs or Contact Us.
Great article on some of the benefits of outsourcing customer service. In particular I liked the comments regarding risk management, something not often considered in the decision process.
Very informative and thorough in every aspect. Awesome job with these articles. Keep them coming. My co-workes also enjoy reading your articles.
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Thank you.