It costs 5x to get a new customer than to retain an existing one. Stellar customer service is an undeniable bottom line for most businesses to stay relevant amidst competition. How do you achieve this without breaking the bank, though?
Some businesses believe they can’t afford to outsource customer service. Well, the opposite just may be true. When you add up the expenses of in-house customer service, they rack up pretty fast. In this article, we’ll be discussing the financial side of outsourcing customer service, whether it makes sense for your small business, as well as the right way to outsource. Read on!
Customer Service: In House Versus Outsourced Cost
In-house customer service might be a costly method to nurture customer relationships and sustain sales.
In the United States, the average salary for a Customer Service Representative is $30,688 plus $4,633 in benefits. Multiply it by four or more, depending on how many you need on your team. In addition, the Customer Service Manager earns $39,694 a year plus $6,032 in benefits.
Other expenses not mentioned above include training, phone systems, office supplies, fees, and commissions. Furthermore, there are trainers, analysts, and quality assurance coaches on the team to account for. These “extras” may amount to an extra $200K per year or more.
Off-shore outsourcing or hiring outside the United States, on the other hand, can bring down the hourly cost per representative. South America and Southeast Asia have rates ranging from $8 to $18.
A team of four customer service representatives may cost $14,000 per month or $168,000 per year, including the services of a Customer Success Manager, Corporate Trainer, and Business Analyst. Technology, hiring, training, and administration are all part of the package.
As a result, you will save time and money by outsourcing your customer service. You won’t have to worry about payroll taxes, HR paperwork, sick and vacation days, or other issues that have an impact on your company’s productivity and bottom line.
When Should You Outsource Customer Service?
Choosing to outsource should never be a snap decision. Small businesses need to consider their long-term needs and goals before outsourcing. Here are some valid reasons why you should start thinking about this route:
When You Need Support Quickly
Support volume might fluctuate dramatically throughout the year in businesses with seasonal cycles, such as eCommerce. Outsourced customer service teams allow you to scale your team’s sizes as needed without hiring too many agents or firing people when the customer queues run dry.
Even if you plan to recruit internally, the process of identifying candidates, interviewing them, and onboarding can take months.
If You’re Just Starting Out
Small businesses often cannot afford to hire a professional customer service agent. If none of your staff have any customer service expertise, you may wind up providing customers with substandard service. On the other hand, outsourcing can provide you with an immediate supply team of professionals that have access to cutting-edge technology and resources.
Develop a Competitive Advantage
If you notice your significant competitors providing subpar customer service, you can take this as an opportunity to stand out as the superior option by extending your customer service availability. For example, you might use outsourcing to provide customer assistance after hours, holidays, or weekends.
Communicate with Customers in Their Language
Language can be a significant roadblock on the way to global expansion. Outsourced customer service may provide multilingual help to avoid misunderstandings and difficulties. This may even be required if you run an online business or bring business to foreign countries. Make sure consumers know that multilingual help is available – this is another way your business can distinguish itself.
When It Isn’t a Good Idea to Outsource Customer Service
Before you decide on outsourcing, it’s critical to examine when going in-house may be more viable. Here are a few reasons why you should reconsider going down the outsourcing path:
Don’t Outsource Just to Bring Down Costs
It’s true, the per-hour (or per-customer encounter) costs are typically lower in outsourced services. Hiring a limited number of well-trained outsourced agents, on the other hand, is not the most cost-effective choice. The very low-cost BPO providers are aimed at considerably larger organizations with far higher numbers of repetitive support requests.
You’re Not Sure How Long You’ll Need Their Services
Some service providers may ask you to sign a contract to secure their services for a set period (typically a year) and a set number of hours each month. If you don’t know where your firm will be in a few months, you may find yourself stuck with a contract you’d rather discontinue.
Don’t Outsource so You Can Offload Customer Service
Outsourcing is by no means a way to offload customer service to someone else entirely. A good outsourcing agreement is a collaboration that calls for consistent effort on both sides. Collaborate with your outsourcing company by communicating regularly and providing regular training and quality assessments to maximize your investment.
Outsourcing Customer Service the Right Way
If you’ve decided on outsourcing customer service, it’s essential to keep these general guidelines in mind:
Set Your Brand Guidelines
Your consumers are used to the method you connect with them, whether it’s by SMS, phone, or branding.
As a result, if you hire an outsourced support team, they should maintain an “on-brand” tone to provide a seamless customer experience.
Here’s how you do it:
- Make a set of brand rules outlining what your staff can and cannot say.
- Run through potential scenarios they may experience in the future and assess their reaction to the circumstance.
Research Multiple Providers
Some outsourcing providers specialize in handling repetitive or high-volume tasks, while other companies deal with complex customer care situations.
It’s important for your small business to look into various feasible customer service solutions so you can discover the appropriate service for your needs. Consider the time differences, language requirements, and the minimum support volume, among other things.
Focus on Quality and Training
No one else will ever know or care as much about your consumers as you do. Commit to working with your supplier to ensure that their personnel is up to date and meets the quality standards you establish for your team.
Keep Communication Open
To form a relationship, try to develop two-way communication with your outsourced staff. Doing so helps you learn about the current situation, identify areas that need further training, and gain some data insights that may benefit your internal team.
Audit Your Internal Systems
It is typical for businesses to have in-house technologies that may compromise their security or confuse outsiders. Examine the tools that your internal team employs before granting external access.
Customer service outsourcing is an excellent way to support business growth, bring down costs, and increase the overall customer experience quality. When snooping around for outsourced talents, assess their experience, skills, location, and the availability of other services your business might require. Always remember that outsourcing isn’t a one-time thing, you’ll still need to maintain regular training and monitoring so you can keep your brand image spot-on.
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