What is Outsourcing and Should You be Doing it?

Outsourcing, quite simply, is contracting work out to another company who can be either domestic or abroad.

Specific to customer service, it is usually contracting work to a contact center partner or partners who can fill a gap in a company’s operations. Business.com defines customer service outsourcing as, “when management of customer-facing communication channels is transferred to a third-party service provider. 

Typically, customer service is outsourced through a call center service, which maintains agents who are trained to handle a business's incoming calls.”

Why do companies outsource?

There are many reasons why companies choose to outsource at least some, if not most, of their customer service.

Companies outsource to:

1. 1. Reduce overall support costs
   2. Remove operational risks
   3. Fill gaps in their operations

1. To reduce overall support costs:

When you’re not hiring internal employees, you’re also not paying a salary or paying for benefits. Instead, you’re paying an agent an hourly fee for a set number of hours per week. This can result in tremendous cost-savings for the company.

Pro Tip: Companies can save even more money by utilizing a pay per ticket model instead of per hour. Learn more >

2. To remove risk from a business's operations:

Consider that it is flu season and 50% of your internal support staff is home sick. You’re now at 50% capacity and struggling to maintain your usual output with just half of your agents. You, as a support leader, are stuck scrambling to help your customers quickly while providing good customer service, but queue times are up significantly and customers are not happy. 

By outsourcing support, you limit the risk of operational fire drills while reducing the pressure on you, your team, and your company. While certainly an illness or other unforeseen event could take a similar toll on your outsourcing partner, it is their responsibility to replace the staff to get your business the help you’re paying for.

Pro Tip: A way to further reduce the risk of an unforeseeable event impacting your business is to take a portfolio approach to outsourcing. This involves contracting with multiple BPO partners in a redundant and overlapping manner so that if one of your contact centers is experiencing an issue, you’re able to move volume to another partner and experience little to no operational interruptions on your end.

Learn more about the importance of a portfolio approach and how ArenaCX can help you create and manage your portfolio of partners to reduce the risk.

3. To fill in operational gaps:

Perhaps your company is expanding and opening another branch overseas. Currently, you only have English and Spanish-speaking agents but you now will need to support Mandarin-speaking customers. 

By outsourcing to a contact center partner who supports Mandarin, you can ensure your customers are getting the support they need without the cost and risk of committing to a fixed number of agents via internal hires. 

But language is just one example of the operational gaps that occasionally needs filling. Other include: Weekend and after-hour coverage, timezone flexibility, or adding a new service channel, like social media or SMS.

Why Don't Companies Outsource?

While each company is unique in its needs, there are a few reasons companies are hesitant to try (or retry) outsourcing.

Companies often avoid outsourcing their customer service because:

1. 1. They're worried their support cases are too technical for an outsourced team
   2. They've had poor experiences with outsourcing or partners in the past
   3. They're worried that an outsourced time won't serve their customers as well as their internal team and their customer satisfaction will suffer
      
      

1. They feel that their tickets are too technical to outsource:

When you have a technical product that may be hard to understand or troubleshoot, it may feel like finding a contact center partner who will be able to support your complex business is impossible. It may seem easier to continue with the status quo of hiring internally than invest the time in developing robust training materials to aid the onboarding of external agents. 

However, there are many reasons why your tickets aren’t too technical to outsource and where you could greatly benefit from the initial investment of a strong training.

Pro Tip: Creating strong agent training material will not only assist your outsourcing partners, if you choose to contract, but it will also make internal training easier too. ArenaCX can help facilitate partner training and keep your outsourced contact center agents up to date on the latest materials.

2. Poor experience with a partner in the past:

We’ve all heard the common saying, “fool me once shame on you, fool me twice shame on me.” It seems that many support leaders who have had a poor experience with outsourcing in the past are hesitant to try it again. If it didn’t work the first time, why should I think it will work now? 

While there is never a guarantee that you will find the right partner and that it will be a match made in Heaven, there are some simple steps you can take when vetting potential partners that can help lead to a fruitful partnership. In our blog 3 Tips for Selecting the Right Contact Center Partner, we discuss some tactics and check boxes to mark as you’re looking at what a potential call center partner can offer you and your team.

Pro Tip: ArenaCX is the perfect partner to help you vet and select the right partners. We help you test and trial the partners who will best fit your needs with no long-term commitments, so you’re never stuck in a bad relationship with the wrong partner.

3. Fear that customer satisfaction will suffer:

This is one of the most common fears we hear from customer service leaders, and arguably one that can be the hardest to combat. If you outsource your support, how can you be sure they’re receiving the quality that is standard for your internal agents? 

Of course there are measures of customer satisfaction you can track, like NPS and CSAT but if those start to fall, how can you course correct? The sad truth is, in a lot of cases, there is little action a company can take when a contact center partner is performing poorly. 

That is, until ArenaCX  gamified the outsourcing industry. With our model, each contact center in the network competes to better serve a company’s customers. If a certain contact center in the network doesn’t perform well, they receive less and less of a company’s tickets, while the contact center(s) providing the best support will receive more and more business. 

Adding this level of friendly competition makes it easy to ensure customers are getting the best support possible, giving contact centers a reason to continuously improve their quality of customer support.

Should your company explore outsourcing?

We believe that there is a lot of value in finding the right partner and working with them to create a great experience for your customers. 

We also understand the importance of selecting the right partner who you can trust and consider a true partner. We’d love to better understand your outsourcing needs and provide an assessment of if outsourcing might be the right choice for your company. 

Tell us your outsourcing needs so our outsourcing consultants can help you assess your company’s best options.

To learn more about how ArenaCX works, read our blog Outsource Safely with AreanCX.