How to outsource customer service in 2023

Skip straight to the statistics summary.

Customer service has overtaken product and price as a key differentiator for businesses. Offering superior customer care helps your organization gain and retain more customers, leading to improved margins and profitability. However, with the customers of today expecting multi-channel, round-the-clock availability, it is becoming increasingly difficult to keep up with their demands while tending to the other needs of your organization.

Outsourcing is being used by more and more organizations across the globe as a cost-effective solution to this problem. In fact, the outsourced customer care services industry is set to surpass U.S.$110 billion by 2024¹. Outsourcing can help you to scale up your business and lower expenses, all while maintaining a high standard of customer service.

While some business owners may be hesitant about outsourcing customer service, it’s possible to do so without jeopardizing your brand and voice. Training and management - along with choosing a quality provider - will ensure your outsourced team can effectively represent your brand and achieve your customer service goals.

What does it mean to outsource customer service?

Outsourcing customer service involves having a third party handle customer inquiries and responding to customers who need help or are reaching out to your brand. All facets of customer service can be outsourced, including support for contact centers, mobile and live chat, emails and social media.

Hiring local customer service staff can be expensive, requires time and investment, and is subject to high attrition. Outsourcing customer service to an offshore provider in a country such as the Philippines can save you up to 70% in labor costs while delivering the same high standard you would expect from a local team.

Why is investing in customer service outsourcing so important?

Now that you understand what outsourcing customer service is and when you should outsource your customer service functions, let’s discuss the ‘why’ in more detail. Customer service and customer experience go hand-in-hand. As many as 84% of Millennials and Gen Zers² would go to a competitor if offered a better customer experience. What better way to understand how important it is to invest in customer service solutions like outsourcing, then a comprehensive list of statistics.

The importance of good quality customer service and customer experience is demonstrated by the following stats:

• A positive customer experience or great customer service can result in higher customer retention rates and profits increasing by 25%³
• 64% of people find customer experience more important than price⁴ when making a purchase
• Organizations that invest in improving their customer experience can see revenue increases from 10% to 15%⁵
• Only 34% of customers rate an organization as having good customer service and are more likely to purchase again⁶
• 37% of consumers are likely to recommend an organization⁶ as a result of a positive customer experience
• 86% of customers would pay more for a better customer experience⁷
• 56% of consumers will stay loyal⁸ to organizations that ‘understand their needs’
• Organizations that have above-level customer experience ratings have 1.5 times more engaged and motivated employees⁹ than those with poor ratings
• Consumers that complain of service-related issues with a brand are four times more likely to purchase from a competitor¹⁰ in comparison with product or price-related problems 
• 40% of customers start buying from a competitor because they offer better customer service¹¹ 
• In America alone, poor customer service loses equal over $62 billion¹² annually
• Around 54% of organizations use outsourcing support teams to help connect with consumers¹³
• Over 50% of organizations already use outsourced customer service support¹⁴ to improve their customer experience.

Now that we understand why good customer service is important, let’s discuss how you can achieve this for your business. Outsourcing is one way you can invest in improving your customer service function. Outsourcing customer service involves sending certain customer-focused tasks to team member(s) outside your business to complete, often at a lower cost. In this next part, we will discuss when it might be suitable for your business to consider an outsourced customer service model.

When should you outsource customer service?

If any of these scenarios apply to your business, it might be time to consider outsourcing:

You need to commit more time to growing your business

If basic customer service tasks are taking up a lot of your team’s time when they could be performing more revenue-generating tasks and focusing on growing the business, it could be time to outsource.

Peak season is approaching

Holidays are busy times for customer service staff, so bringing on an outsourced team will help your business keep up with increased call volumes and other demands. Hiring permanent staff can be time consuming - finding candidates, conducting interviews and onboarding. Outsourced support teams allow you to rapidly scale up (and down) as needed.

Even after the holidays are over, customer service related enquiries may remain elevated for some time. Having an outsourced team to deal with things like product returns will leave your local team free to focus on new business goals.

You need to scale your business, fast

If you need to grow your business but don’t want to make a big upfront investment in things like infrastructure, recruiting, software and office fit-outs, outsourcing can help.

It must be noted that outsourcing shouldn’t be used as a way to avoid having to think about customer service altogether - you will still need to work closely with your outsourcing partner to ensure your customer care goals are being met.

Take a startup organization as an example. By offshoring key business functions, including customer service tasks, an startup could produce more than 10 times the output achieved prior to offshoring.

Choosing the right customer service outsourcing provider

When it comes to selecting an outsourcing provider, it’s important to make your choice based not only on the quality of the provider, but also on their ability to meet your business’ unique needs.

Establish clear goals and expectations

Why are you outsourcing your customer service function? Think about what you want to achieve by outsourcing, and what you expect from your outsourcing partner.

Is your main goal to cut costs? If so, have a cost saving target in mind before you enter negotiations. Are you aiming to free up your local staff so they can spend more time on complex, high-value tasks? Then make sure the outsourced team can perform the roles your local team was doing before. Are you seeking an increased level of customer service carried out by trained professionals? Focus on finding the best possible team.

Once you have clear goals for your organization, define what you want from your outsourced team. Establish what you want their main goals to be - to provide technical support to existing clients, for example, or to increase customer retention.

What to ask prospective outsourcing providers

Consider their experience, geographic location and the skills their staff can offer. Are their staff proficient in your language of choice? Do they work remotely or from an office? Ask how they manage things like staff productivity and performance, which public holiday schedule they adhere to, and whether they will be available to you 24/7.

Outsourced staff will only be engaged and enthusiastic about work if the provider treats them fairly, so be sure to ask about employee satisfaction and staff retention. Find out about their recruitment processes, such as how they choose the best candidate for the role, what testing is performed on applicants, and what happens if a team member turns out to be unsuitable.

Think about your customer

Consider how your customers operate - do they prefer to interact through a call center, with live chat on your website, or through Facebook Messenger, Instagram or Twitter? Knowing your customers will help you decide which services to outsource and who to partner with.

Recruiting, training and working with your offshore customer service team

To ensure you have a selection of high quality talent to choose from, your outsourcing partner should be running a rigorous recruitment process, including conducting skills and language testing. You will then have an opportunity to interview each short-listed candidate to review their skills and ensure they will be a good fit for your company culture. Providing feedback to your provider on why each candidate passed or failed will help your recruitment team filter future candidates.

A reputable outsourcing company will provide highly-trained customer support agents with experience handling different situations. However, you still need to ensure that your new staff understand your business culture, your customer demographics, and how they like to interact with your brand. Online communication tools such as Zoom and Skype allow you to train an offshore team in much the same way as you would train your local team.

Here are some tips and tricks to ensure you are setting your outsourced customer service team up for success:

Communicate your values

Your outsourced team should live and breathe the same values your internal staff do. Your customers must feel like they are communicating with you when they interact with your support team, whether over the phone or via text or online chat. Work with your team to make them sound and act like you do. Establishing brand guidelines will help ensure your customers are treated in the way they’re accustomed to. Consider conducting role plays so your new team can practice potential scenarios that they may face, and guide and correct their reactions.

Provide them with resources

Create a set of guidelines that specify what words or phrases your team can use and which ones they should avoid. Provide resources for your outsourced customer support agents to use or reference, including things like a product manual, training videos, customer interaction guidelines and answers to FAQs.

Communication is key

Effective communication between you and your outsourced team is one of the keys to success. ensure there is open dialogue about what is working and what isn’t, areas in which improvement or additional training is required, and feedback from customers.

You should treat your outsourced customer service team as an extension of your local team. Keep them in the loop with information that is relevant to their work and what is happening in our organization - such as changes to your policies, products or services. If you have a weekly meeting with your local team, do the same with your outsourced team so they feel like part of our company.

Measure success

It’s important to continually evaluate your customer support team’s performance to make sure they are on the right track. Having clear KPIs in place will also motivate your staff to meet or even exceed your expectations.

Some metrics you could use to measure performance in a contact center include:

• Average speed of answering – how much time it takes to answer an incoming call
• Customer satisfaction (CSAT) score – measures whether your clients are happy with the support service
• Customer effort score – tracks customer experience during the interaction with the call center
• First-call resolution – evaluates your employees’ ability to solve clients’ issues
• Average handle time – how much time your customer spends on the line.

These stats will give you valuable insights on how to increase customer service productivity and improve clients’ satisfaction.

What’s next?

If you’d like to learn more about outsourcing your customer service to an offshore provider, download our free eBook, Offshoring Customer Service.