You may be questioning: “Is customer service outsourcing right for my business?” It’s estimated that about 54% of companies rely on outsourced support teams to handle customer requests. For businesses that choose outsourced services, the decision is easily accomplished as third-party support teams offer many key advantages over an in-house support team from reducing the costs to expanding support coverage. Still, the choice is not without its peculiar set of challenges and risks. What’s more, businesses have to choose between an onshore versus an offshore outsourcing partner. In this article, we’ll consider everything you need to know about outsourcing customer service from prices to pros & cons. If you have an overstretched in-house support team, we will also hint at how conversational AI can streamline your operations by handling routine calls.
What Is Customer Service Outsourcing?
Customer service outsourcing is the decision by a company to hire a third-party provider of customer care services to facilitate inbound or outbound calls.
Call centers are offices — physical or virtual — that host the customer service support staff who handle large volumes of phone calls. Organizations may have dedicated in-house call centers whereas an outsourced call center has agents working for one or more businesses. They may be in the same country as the customer (onshore) or in another country (offshore).
Call centers may provide inbound call solutions — dealing with incoming calls for technical support, order confirmation, or answering services.
A call center may offer outbound call solutions — focusing on outgoing calls for telemarketing, follow-ups, appointment confirmation, or lead generation.
If a call center handles more outgoing calls versus inbound calls, it’s outbound, and the opposite is true.
Price of Customer Service Outsourcing Call Center
It’s a bit difficult to say that customer service outsourcing will cost you this much. The price fluctuates and varies widely depending on the particulars of the service, such as the call center location, pricing model, and extra charges. Which factors cause the price to vary?
Hourly rates
The most popular outsourced call center pricing is per hour. But note that outsourcing call centers may quote their fees in talk time per minute paired with a monthly retainer. Hourly plans may consider the average call duration (talk time + after call work).
And the biggest determinant of the hourly rate is the call center location as this influences the agent’s salaries. In Asia and the Philippines, the hourly pricing per agent ranges from $8 to $14.00. Call centers located in India may charge anywhere from 6 to $10. Prices per hour for the USA, Western Europe, and Canada start from $20 per hour.
Despite pricing for some regions seemingly being below the livable wage, You may find that the call centers typically offer more competitive rates than local employees in regions such as India, Pakistan, the Philippines, Latin America, the Middle East, or Africa. Also, the cost of living is several times less than that of the United States or Europe.
Highly specialized call centers in individual markets may have higher rates.
Monthly flat rate vs. pay as you use vs. pay per performance
With Pay as you use, the client pays for the productive hours. And monthly flat-rate pricing is where the call center and the customer agree on a flat rate to be paid every month for all services rendered. It’s not a common pricing model for call centers in Canada, Australia, Europe, and the US.
Another payment structure that is not quite common is pay per performance. It may be based on the number of tickets closed, leads generated, or new customer activations. For instance, outbound calls that don’t result in a sale may be free with this pricing plan.
Dedicated vs. Shared
Your business will have a dedicated team of agents in a dedicated Service plan. With shared plans, the agents may serve up to three customers simultaneously. Shared plans may result in reduced spending for businesses that experience periods of low call activity.
Addition costs determinants
It’s important to note that many other factors may influence the price, including:
Add-ons (IVR management, after-hours answering services, Analytic, consultants)
Number of languages
Performance KPIs
Agent skillsets
Management fees
Fixed service fee per agent
Required support channels
Some quick notes before we move on:
Some call centers may agree to a penalty if their agents fail to meet the key performance indicators such as the first call resolution (FCR). Think about it; if the call center has to resolve issues with two or three calls instead of one, it may quickly drive up the support costs.
Your business may have to pay various fees before agents start working on the account, such as the management costs or the fixed monthly retainer. Contracts may have extra fees and penalties for breaking them before the set duration. The hourly or talk time rate may be subject to a fixed call volume, and after that, calls may attract a higher rate.
Outsourcing Customer Service Pros and Cons
Outsourcing customer service may provide a business with the following benefits:
Greater access to talent and highly experienced agents;
The ability to quickly scale the customer care operations;
Huge time savings with the freed up time redirected to critical business tasks;
Added capacity to offer extended coverage and around the clock support during after hours and weekends;
Access to multilingual support by an international team speaking local dialects;
The ability to leverage the latest technologies used in specialized call centers from a reliable backup to enterprise chatbots;
Pay as you use flexibility and better cost savings.
A customer support outsourcing service is not without its disadvantages. Some of the biggest cons include:
Brand disconnect brought about by hiring agents from regions with different values, accents, and experiences than local customers;
Limited control of support agents;
Higher risk of data breaches;
Customer care quality issues by inexperienced outsourcers.
In-House vs. Outsourcing Support
Cost is one of the biggest determinants when it comes to the choice of an in-house versus outsourced support team. Companies with in-house teams spend money on recruitment, training, compensation, equipment, office space, and extra benefits.
In the West, many companies find that the costs are several times cheaper when they choose offshore customer service outsourcing companies.
Even when the cost is not an issue, many companies simply find it easier to delegate customer service by engaging with onshore providers. They can retain or improve the quality of customer care in line with customer expectations. The companies don’t have to worry about hiring, recruitment, training, or other HR activities. It’s also much easier to scale, control the price, and remain flexible.
So, E-commerce customer service outsourcing may be a better bet if you want to save costs or have less to worry about. But there are some great pros of having an in-house customer team, including higher levels of security, direct communication, deeper brand knowledge, and teamwork.
Choosing the Right Outsourcing Customer Service for Business
What should you know when choosing a customer support outsourcing service? Consider the following factors to have the best service:
Reputation: The reputation of an outsourcing call center precedes it. A reliable service should offer proof of past good results with former clients — case studies, testimonials, work samples, or independent reviews.
Quality of agents: It’s a good sign when a call center has experienced agents who have worked with the company for a long time. Quality outsourcing partners invest in their workforce with top-notch courses. They don’t just hire anyone but impose strict qualifications.
Cultural and brand compatibility: The customer care department is the face of the company, and customers don’t care if you’re working with an outsourced team. So, it's preferable to have cultural, ideology, and brand compatibility. Some companies even use locally-based support agents as a marketing advantage.
Payment and pricing plans: Never rush into an outsourcing agreement without going over their contract and the pricing structures as they may be quite complicated. It’s important not to pay for unused services, and the outsourcing partner must be willing to use past data such as call volumes to offer accurate price estimates.
Managerial team: A quality outsourcing partner has a solid managerial team and strict processes. You can also ask about the possibility of having the performance tied to key KPIs.
AI Conversational Apps, Best Upgrade for an In-House Team
If you’re looking into hiring a third-party customer care service provider because your team may be struggling to match the demand, it may be helpful to look into the possibility of creating AI-intelligent virtual agents. It may be even cheaper than outsourcing or hiring more in-house agents.
The evolution of artificial intelligence (AI), machine learning (ML), and natural language processing (NLP) now allow for intelligent voice bots that can hold two-way conversations with humans and help out with many customer support tasks.
The AI conversational app can take on routine requests that don’t require a lot of human ingenuity or creativity to solve. You can think of automating tier 0 and tier one support requests such as account creation, answering FAQs, balance inquiry, order confirmation, and more.
Dasha.ai provides a platform for developers to bring different conversational apps to life.