Outsourcing, the practice of hiring another company to carry out a business operation, has gained popularity over the years due to its cost-effective nature and convenience.
And customer support is one of the most commonly outsourced business functions.
Many companies that have opted for call center outsourcing have experienced an improvement in customer satisfaction levels and business growth.
This Article Includes:
(Click on a link to go to a particular section)
- What is Call Center Outsourcing?
- 6 Advantages of Call Center Outsourcing
- 3 Disadvantages of Call Center Outsourcing
- How to Find a Good Outsourcing Partner
Let’s get started.
What is Call Center Outsourcing?
Call center outsourcing is the business strategy of hiring a third-party company to handle your company’s customer support. Technical support, IT help desk support, sales support, and order management support are some of the most common call center outsourcing services.
Want to know more about outsourcing?
Check out our comprehensive outsourcing guide.
The call center outsourcing industry is predicted to grow by $13.54 billion during 2021-2025.
IT and telecom, BFSI (Banking, Financial Services, and Insurance), healthcare, and retail industry are major outsourcers of call center solutions.
Companies from these industries outsource inbound and outbound support to third-party companies, which can be from any country.
Based on the country where the third-party company is located, outsourcing can be divided into:
- Nearshore outsourcing: When the hired company is located in a neighboring country.
- Offshore outsourcing: When the hired company is located in a faraway country.
- Domestic outsourcing: When the hired company is located in the same country.
Most companies prefer offshore outsourcing due to the lower cost associated with it.
6 Advantages of Call Center Outsourcing
This part of BPO (Business Process Outsourcing) is booming because of its several advantages. Let’s look at a few of them:
1. Lower Costs
Customer service outsourcing is usually a cost-saving approach depending on the country you outsource to.
The resources essential for call center functioning are cheaper in some countries when compared to others.
For example, you may have to pay a high amount to outsource customer support to the USA. But on the other hand, it may cost less if you outsource to India.
This is because of the lower cost of living in India. According to Syrow, the cost of outsourced call center services in India is $6-10, while it’s $20-30 in the USA.
So you can save a lot of money by outsourcing smartly to a suitable country.
2. Easier to Meet KPI targets
In-house call centers usually have fewer agents than third-party service providers to compensate for the higher labor cost. As they have fewer agents, they may not attend as many customer service calls as outsourced call centers.
Additionally, call center tasks will be divided among fewer agents in an in-house call center — increasing each agent’s workload and making it difficult to achieve target metrics.
For example, a call center with 40 agents can easily achieve an ASA (Average Speed of Answer or the minimum time to attend an incoming call) of 15 seconds than a call center with 20 agents.
Outsourced call centers may be able to achieve higher targets due to their ability to hire on scale. As a result, you can aim higher than your standard targets by outsourcing customer service.
3. Better Service Quality
A call center outsourcing company can have clients from different industries. As a result, their agents may have more experience handling various customers and adverse situations.
On the other hand, your in-house team can consist of agents whose talent is restricted to local experiences due to their limited number of clients.
Additionally, some outsourced service providers have agents who are trained or educated in particular fields. Such agents can provide better customer service when they work in their respective fields.
For example, a qualified IT (Information Technology) agent will provide better IT technical support than an agent without specialization.
But staffing such agents may be difficult in your country due to high labor costs. This means that outsourcing customer service could give you access to more skilled call center agents.
4. Save Time
When you outsource your customer support, you don’t have to worry about running it.
You don’t have to create payrolls, track attendance, check quality assurance, or measure performance if you outsource. But, on the other hand, you’ll be accountable for the functioning and maintenance of an in-house team.
By outsourcing, you can use the time you would spend managing an in-house call center to complete other necessary tasks.
For example, you could reach out to a few more potential clients with the time you save by outsourcing. Or you can invest more time in creating a business strategy.
This means that outsourcing can help you grow more when compared to in-housing by giving you more time to invest productively.
5. Better Workforce Management
Call volumes can vary in a day.
That’s why, if you schedule the same number of agents throughout the day, you may miss calls during peak hours and have low agent engagement when the call volume is less.
To overcome this inefficiency, you should practically schedule agents such that they’re distributed to attend maximum calls.
For example, you should assign more agents to work in the afternoon if the call volume is high during that time of the day.
To schedule agents flexibly, you need to have the experience and tools to manage your workforce. You should also be able to schedule agents flexibly.
An outsourced call center is usually not bound by constraints like regular working hours — allowing them to schedule their staff in unconventional ways to maximize productivity.
They can do so by:
- Including split shifts (splitting a day’s working hours into different shifts).
- Combining full- and part-time agents.
- Temporarily recruiting agents from other departments and much more.
This freedom to manage their staff can help them provide customer service efficiently and utilize their workforce to their maximum capacity.
6. Flexible Scaling
Scaling is a hectic and challenging process, especially if you have to manage your customer care team.
Running an in-house call center can drastically drain your energy, reducing the effort you may invest in expanding.
Call center outsourcing can simplify the process and increase your business’s scalability. As a result, you can easily expand and scale down your business without the thoughts of hiring, training, or maintaining your customer care.
For example, you may have to manage the training of new agents when you scale so that their operational efficiency doesn’t decrease. But you may have to attend meetings with potential clients at the same time.
Such a hectic schedule can make it hard for you to manage both, reducing the effectiveness of your business scaling.
Additionally, you can also scale down easily when needed. All you have to do is let your call center partner know.
3 Disadvantages of Call Center Outsourcing
Let’s look at a few disadvantages of call center outsourcing:
1. Can Have Slower Issue Resolution
The distance and time zone differences between you and your outsourcing provider can delay the resolution of your customer issues. Due to this, your call center partner may find it challenging to communicate with your in-house team effectively.
Even though tools like Slack have made long-distance communication between teams easy, it can be delayed due to time zone or internet issues.
You can solve this issue by setting a clear set of rules addressing what to do when discussing a customer issue. By doing so, your outsourcer will know how and when to get in touch with your in-house team and can contact them immediately.
2. Language Barriers
Sometimes, they may speak the same language but have different accents that make it hard to communicate. For example, if your call center service provider is based in Australia, your US customers may find the usage of some words confusing — complicating their communication.
To avoid this problem, you should check whether the outsourcing solution employs agents who can interact with your customer smoothly.
You can also ask your partner to train their agents to improve their communication skills. Outsourcing companies that show no improvement after training can be considered ineligible to provide customer service of preferred quality.
Confused whether to offshore or nearshore operations?
Go through our nearshoring VS offshoring guide.
3. Inability to Monitor Quality
One of the biggest problems of outsourcing customer support is the lack of control in quality monitoring.
You can’t monitor whether their agents are working productively and following company policies. This puts you at the risk of paying for the work they haven’t done.
You can tackle this issue with Time Doctor: a powerful productivity and performance management software used by small companies like Thrive Market and huge businesses like Ericsson.
It lets you track how long your outsourcing partner’s agents work and their complete tasks. This feature will help you, especially if you’ve hired a virtual call center partner.
You can also monitor whether the agents are on social media or other non-work-related websites using Time Doctor.
Check out how Time Doctor can help you monitor your agent’s social media activity.
The software can also ensure that the tracked billable hours are correct, preventing you from overpaying your outsourced call center.
With Time Doctor, you can also:
- Track the time agents work using a silent and interactive time tracking feature.
- Generate detailed productivity reports.
- Track agent inactivity using idle time tracker.
- Manage agent distraction using an idle pop-up feature.
- Take screenshots of agents’ monitors.
- Integrate with tools like Asana, Basecamp, and Trello using its powerful Chrome extension.
This way, Time Doctor can help monitor outsourced service providers, making call center outsourcing easy, transparent, and productive.
How to Find a Good Outsourcing Partner
Outsourcing call center services can benefit your business in many ways — when it’s done right.
But sometimes, outsourcing can lead to poor customer experience and business loss, even if it involves top call center outsourcing companies.
Companies sometimes consult an outsourcer to find a suitable partner. However, that can be unfruitful due to misunderstandings related to service requirements between the parties.
No matter how you search for your outsourcing partner, you should consider the following before hiring:
1. Compatible With Your Business Needs
Your customer service objective depends on the nature of your business.
For example, an inbound call center (call centers that receive inbound calls) services include payment processing, order collection, simple answering service, and upgrade or renewal requests.
And an outbound call center (call centers that make outbound calls) will handle appointment setting, lead generation, telemarketing, conduct client follow-ups, and telesales.
If you’re looking to solve more customer issues, you should outsource to an inbound call center. Or you can hire a contact center (the central for customer interaction across various channels like social media, email, live chats, etc.) for omnichannel customer service.
This way, you’re more in line with your business vision and can attain your goals much faster.
2. Competent in Your Field
All call center service providers may not be equally adept in providing customer service for you. Some of them could be inexperienced or have fewer qualified agents when compared to others.
That’s why you need to carefully weigh the skills of each outsourced service provider before you hire one.
Ensure that they have years of experience in your field. This can be a huge advantage as they may already know how to satisfy your customer and build a strong customer relationship with minimal training.
Additionally, call center service providers with multiple clients from your industry are more likely to keep themselves updated about your business and industry trends.
You should also be wary of service providers who don’t utilize tools for CRM (Customer Relationship Management), managing phone numbers, tech support, or other call center services. Such partners may not be able to provide high-quality services, even if their agents are talented.
3. Prioritize Quality Customer Service
Companies outsource call center services after considering several factors like pricing, ease of collaboration, customer expectation, etc.
However, among all these factors, you should give the most importance to the quality of customer service.
According to a study conducted by Microsoft, 90% of customers consider customer service before they choose a brand or become loyal to it.
This makes customer satisfaction a key determinant to growing your business. As a result, you should ensure that the call center you’re outsourcing to can keep your customers satisfied.
Cross-check the outsourcing partner’s references and previous work to learn about their track record in this regard. If they’re genuinely customer-focused, every internal process will cater to it, and it’ll show in their agent’s attitude towards existing customers as well.
4. Complimentary Corporate Culture
You and your outsourced partner need to understand and respect each other’s work culture. This is especially important if you’re looking for a long-term outsourcing relationship.
The difference in corporate cultures may create misunderstandings, misinterpretations, and conflicts. This can, over time, cause issues between you and your call center service provider.
For example, let’s say your call center partner has more holidays than you. This means your customers won’t be able to access their services during those days. The situation will be more complicated if your holidays are different.
Consequently, you must ensure that you and your call center service provider have a similar corporate culture. This way, you can have a smoother outsourcing experience.
Setting up a customer care center can be expensive due to the costs of buying and maintaining equipment and hiring and training employees.
On the other hand, outsourcing customer services can be much more affordable — making it a better option for large and small businesses.
However, you may face a few problems while you outsource customer service. To tackle these issues, you can consult the factors mentioned in this article. You can also use the solutions we mentioned to resolve issues and reap the benefits of outsourcing.
Lauren Soucy is the VP of Marketing for Time Doctor, the world’s leading time tracking and productivity software. She has 15+ years of experience in marketing at fast-paced companies. Her first passion is SEO, she can’t start her day without coffee, and she enjoys spending time at the beach with her two boys and her husband.