Pros and Cons of Outsourcing Customer Service

Pros & Cons of Outsourcing Your Customer Service Operation

At this point you might be considering outsourcing your customer service center, maybe you just started looking for a solution to reduce cost while increasing capacity and performance. You might have mixed emotions, on one end concerns about leaving the country and what this might entail, on the other, you might be excited because of the cost-saving opportunity; however, you need to think about the following pros and cons of outsourcing your operation.

By considering what’s more important to your core business and the end goal you can maximize and take advantage of the pros minimizing the cons.

The main thing to keep in mind is that the service providers are so broad that their service level may vary, this will ultimately impact on the customer experience and the overall partnership.

 

Pros

Lower Costs

Outsourcing companies can offer lower costs because of their location, expertise or business model. For example, in Mexico, the wages of an agent compared with the United States are much lower and recruiting a big volume is more cost-effective. Lower costs don’t always mean cheap service.

Tip: When requesting a proposal, review what is included and understand their business model and the advantages of their locations.

 

Eliminate Staffing Issues

Contact center outsourcing can eliminate staffing issues such as; expensive recruitment campaigns with no results, high turnover rates, understaffing, etc. Outsourcing companies can recruit for you, won’t charge you for terminations, can offer you a considerable volume of agents in the desired time, and some invest in retaining the agents.

Tip: Ask about their HR processes and numbers, what is included in the price and what SLA’s are in place.

 

A Larger Talent Pool 

Offshore and Nearshore centers are mainly located in countries or regions with a large talent pool, in many cases, English speakers get closer to contact centers for the opportunities and culture they find, just as in Little L.A. in Mexico City. This gives the value of having the opportunity to look for specific skills, and fulfill recruitment needs on time.

Tip: Learn about the English-speaking population of the region and their skills and ask about the recruitment capacity of the center.

 

Shorter Response Times

With a lower cost, eliminating the staffing problems and a larger talent pool you can have an exact agent headcount you need to offer exceptional customer service.

Tip: Calculate a correct estimation of how many agents you need and the service level of the outsourcing contact center. 

 

Language Options

Outsourcing companies are located outside the U.S. where the native language usually isn’t English. Agents are bilingual and can handle client calls in 2 or more languages, that way you can serve a larger market.                 

For instance, many nearshore contact centers offer English and Spanish, making it convenient for companies that sell to the Hispanic market.

Tip: Analyze your market demographics to see what languages are more convenient for your business.

 

Cons

Language & Cultural Barriers

When English is not a native language for an agent, this might result in language and cultural barriers with the customers. Agents may not be familiar with slang language or understand the problems and feelings of US customers if they haven’t experienced something similar.

Tip: Look for cultural alignment, locations closer to the US, speak with some agents before choosing an outsourcer, listen to their English accent and know their background. 

 

Reduced Customer Satisfaction

What’s cheap might end up being expensive. When customers can hear the agent’s accent and know it’s from another country. This can make an immediate difference at the time the customer is not being understood, which can drastically impact the effectiveness of the agent, service level, customer experience, and call resolution levels which will impact on the overall perspective of the customer service of the company.

Tip: Again, look for cultural alignment, good English but also, the control you’ll have on the operation to help them with training and performance. Also, ask for references, case studies, and reviews.

 

Indirect or Hidden Costs

It’s not just about the low rates, you need to consider travel expenses as well, additional personnel, training, software, bonuses, and incentives, also take into consideration the learning curve of the team.

Tip: Review the contract carefully and calculate all additional expenses you will need to manage your outsourced operation.

 

Security & Privacy Concerns

If you outsource your customer service operation you will need to allow access to your customer database, contact person and credit card info in some cases. You need to verify the service provider has an up to date process and the certifications for user information to guarantee the security of your customers.

Tip: Look for outsourcing companies with security certifications and policies in place and send an RFP that includes security information questions.

 

Bad Quality Control

Distance and different time zones can cause you to lose control of the operation because this can initiate miscommunication issues and feedback problems.

The lack of a dedicated quality control process or specialist can greatly diminish the service-level control.

Tip: Ask what reporting will the outsource center offer and what involvement will you be able to have on the operation.

 

Outsourcing is a great opportunity for companies to reduce costs, improve performance and focus on what adds value to the business. But your customers are the most important part of your company, it’s your responsibility to do your due diligence, properly evaluate the companies you are interested in, learn about all the different business models available and visit their facilities.

Even though we don’t consider ourselves outsourcing, CCSI can help you establish a nearshore contact center in Mexico, fully managed by our administrative personnel but following your procedures and protocols. That way we can offer all the benefits of an outsourcing call center without getting any of the negatives. Not sure which CCSI business model is best for you?      

Ask us! Visit our website or schedule a call.

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