Customer Service

Transparency matters: A closer look at outsourced customer service operations

For many medium and large organisations, outsourcing lets them check the boxes for cost-cutting and better efficiency. According to a survey, 94% of the respondents find customer service critical for driving brand value. A well-oiled customer service team integrates seamlessly with sales, operations, logistics, accounts, and marketing.

Another survey shows that companies that provide exceptional customer service may attract buyers willing to spend 17% more. 89% of customers become loyal and make repeat purchases after getting a positive customer experience.

This article explains the pros and cons of outsourcing customer service operations.

Pros of customer service outsourcing

Business owners should have a solid reason to outsource their customer service operations. While ‘cost benefits’ and ‘access to a global talent’ are great reasons to outsource, ‘off-loading because you do not want to handle it anymore’ is not. Here is a list of the right reasons and pros of outsourcing customer service –

Cost efficient

Outsourcing second line and third-line customer service that includes email and telephone support can be a game changer in terms of cost savings. Businesses can significantly reduce their cost of infrastructure, equipment, labour, and utility bills by outsourcing these to an external contractor.

Doing so reduces the capital and operational costs and allows you to focus on core business operations and growth. According to research, outsourcing customer service can reduce your operational costs by 40-60%.

Access top expertise

Access a wealth of specialist expertise that may not be available locally in your country or city. With extensive knowledge and experience, a global customer service team can resolve customer queries quickly and efficiently. With the right tools, expertise, and analytics, you can build strong customer relationships, boosting business development.

Third-party experts can assess your current customer service efforts and identify what is working and what is not and the areas that need immediate attention.

Scalable and flexible

External customer service teams are flexible in the timings and the expertise they bring to the table. This gives you the freedom to be flexible and scale up as your business grows to different geographies. An external customer service partner can scale up or down their services based on the season and corresponding customer engagement. You get a team with a wide range of cultural and linguistic backgrounds to suit your customers’ needs.

Leverage technology

The outsourced service provider will likely have a wide range of sophisticated tools and software systems that will enhance your capabilities without additional investment. Due to their expertise, the outsourced team will make the best use of these tools and systems.

Doing this in-house will require a monetary investment in finding the right software, onboarding, and adapting and training the employees on it. Your external service provider will also be aware of the emerging trends in both software systems and customer service as an industry.

Mitigate risk

Competent outsourced partners know how to identify and manage risks in customer service. While poor service and lack of support are basic risks, others include non-compliance to data security standards, and privacy and operational security. These compliances depend on the country and may change after every few years.

Cons of outsourcing customer service

Outsourcing customer service is not a fire-and-forget method. You should have a solid reason to outsource and ensure that the handover takes place to the third-party service provider. Here are some of the challenges or cons you may encounter –

Mismatch in expectations

You and your service provider should align the expectations and goals. This includes alignment on how you want to differentiate your service from that of your competition. Misalignment can result in a stagnant performance, sub-standard customer experience, and loss of brand reputation.

Change management

By bringing in a third-party customer service team, you make a significant change in the existing structure of roles and responsibilities. You need a strong change management plan wherein your existing staff knows the reason for outsourcing and any change in their existing roles. Without a change management plan, your existing staff could feel confused about their roles and future in the company, the impact of which would trickle down to the customers.

Operation silos

Without seamless integration of information between you and the service provider, you could experience data silos. Technical barriers and workflow bottlenecks can hinder performance negatively. To overcome this challenge, you need a communication structure that sets the right expectations and ensures that both parties are working towards a common goal.

How can Infosys BPM help?

Operationalise digital capabilities and provide enhanced self-service, analytics, transparency, and technologies in end-to-end omnichannel customer experience. Provide continuous customised value to the customer beyond the SLAs by focusing on different objectives.

Read more about customer service outsourcing at Infosys BPM.