The Pros & Cons of Outsourced Customer Service

Good customer service is vital for any business, but what happens when you’re too busy to handle all the communication channels? Ignoring customer service calls and messages isn’t an option, but you also can’t neglect your operations. If you can’t hire enough in-house staff to manage all aspects of customer service, you might want to consider outsourcing as your business grows.

Businesses of all sizes, from large enterprises to small firms, outsource their customer service. Let’s explore the advantages and disadvantages of outsourcing customer service and discuss what you should consider before hiring a call center.

What is Outsourced Customer Service?

Outsourced customer service occurs when a company transfers its customer-facing communication channels to an external service provider. This is often done through a call center, where agents are trained to handle incoming calls on behalf of the organization.

Deciding whether to outsource your customer service can be a complex and unsettling decision for many business owners. It’s important to ensure that your business can continue to provide quality customer service to meet the demands of your consumers.

What are the Pros of Outsourced Customer Service?

Outsourcing customer service can be highly beneficial for small businesses. Here are some of the advantages:

• Reduces Workload: Small business owners and staff often have many responsibilities. Handling customer phone calls and emails can take time away from more profitable activities like sales. Outsourcing customer service can free up time for you and your employees to focus on increasing sales.
• Saves Money: Hiring contract workers, including call center employees, means you don’t have to pay a fixed salary or employee benefits. You also don’t need to provide equipment, which can be costly. For example, a computer and software could cost over $1,000, and a good headset over $60. Factoring in office space, a desk, a chair, and additional monitor, you could spend $5,000 on equipment for a single customer service rep.
• Provides After-Hours Coverage: Many consumers expect to reach customer service departments during off-hours. Call center staff can be available 24/7, providing efficient customer service when your customers need it.
• Offers Multilingual Service: Many businesses serve customers who speak languages other than English. Outsourced customer service platforms often have reps who speak multiple languages, ensuring that customers receive proper assistance without language barriers. This can increase customer confidence in doing business with your company.

Joe Wilson, senior career advisor at MintResume, noted, “Outsourcing helps you save resources and create better coverage. If your company operates internationally, it may be easier to hire a local call center office than to train an in-house team in a foreign language. The broader your audience, the better chance you have to satisfy your customers.”

What are the Cons of Outsourced Customer Service?

While outsourcing customer service offers numerous benefits, it also has its drawbacks. Here are some cons to consider:

• Potential for Reduced Customer Satisfaction: Some business owners worry that outsourcing customer service may lead to a decline in customer satisfaction. To mitigate this, it’s important to thoroughly vet potential providers and choose one with a strong track record and positive references.
• Lack of Familiarity with Your Company: Outsourced employees may not be as familiar with your company, products, and services as an in-house team would be. To address this, maintain clear and consistent communication with your outsourced customer service team and provide them with regular updates on your business.
• Your Business May Not Be Their Top Priority: Outsourced customer service reps often work with multiple clients, so your business may not always be their top priority. Hiring dedicated agents, though more expensive, can help ensure that your customer service calls receive the attention they deserve.
• Security Concerns: If your business deals with sensitive information such as credit card numbers, security is a significant concern. When outsourcing customer service, it’s crucial to interview call centers about their cybersecurity and risk management practices to ensure the safety of your customers’ data. Many call centers have robust security measures in place to protect sensitive information.

Are there any Outsourced Customer Service Companies in the United States?

Yes, there are several highly recommended outsourced customer service companies in the U.S. Here are eight companies based in the U.S. that can assist your business with its customer service needs:

• VoiceNation
• eVoice
• Intelligent Office
• Sound Telecom
• Helpware
• DialAmerica
• AnswerFirst
• Complete Call Solutions

What should I know before selecting a customer service provider?

Before hiring customer service providers, there are several key considerations to keep in mind. Here are some questions to ask when evaluating potential outsourcing partners:

• Expertise: Does the outsourced customer service provider have experience in your industry? Are they familiar with industry regulations and consumer concerns? Hiring a provider with industry-specific experience can help ensure that they understand your business’s unique needs.
• Quality Control: How does the provider maintain quality control? Ask about their strategies for dealing with difficult customers and ensuring customer satisfaction. Additionally, inquire about the level of visibility you will have into their customer service operations, such as access to reports and recorded calls.
• Security Measures: What security measures does the provider have in place to protect your business’s data? Ensure that their networks are secure and inquire about who manages their network and who has access to it.
• Hiring & Training: How does the provider recruit and train customer service representatives? Some businesses may require specialized skills for handling customer inquiries. Ask about their hiring process and training program, and how they stay updated with evolving technologies.

By asking these questions and thoroughly evaluating potential outsourcing partners, you can find a customer service provider that meets your business’s needs and provides excellent service to your customers.

How much will it Cost to Outsource a Call Center?

The cost of outsourcing a call center depends on the services you require. Basic answering services typically cost between 70 cents to $1 per minute, while dedicated call center agents, who work exclusively for your company, can cost up to $25 per hour.

According to Wilson, the cost of outsourced call centers includes expenses such as employee training, IT infrastructure, incoming information analytics, agent payments, administrative resources, office rent, and technical needs.

The complexity and urgency of your needs also affect the cost. If a team is readily available, costs may be lower. However, if a team needs to be assembled from scratch, there may be an initial preparatory stage to recruit suitable staff.

You also need to consider whether you require live answering and message-taking services. Shared agents are a more cost-effective option for these functions, while dedicated agents are necessary for more advanced tasks such as outbound calling campaigns, complaint management, and customer win-back services.

Outsourcing Customer Service is a Major Decision

Deciding to outsource customer service to a third-party provider is a significant decision with wide-ranging implications. However, it can be the right choice to support your business’s growth, maintain operations, and deliver high-quality customer service.

It’s crucial to select a provider that you feel comfortable with and that can expertly and efficiently address your customers’ most pressing needs.

Harry contributed to the reporting and writing of this article. Some source interviews were conducted for a previous version of this article.

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