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Table of Contents
Introduction
As businesses grow, in-house customer service becomes more and more challenging to manage. Between time, staffing, expertise, equipment, and infrastructure, running an in-house customer service operation is a major investment that can easily divert resources and attention from core business functions, which is precisely why many businesses often choose to outsource customer service. But what is the cost of customer service outsourcing? Let’s break down some of the key factors that influence pricing in customer service outsourcing.
Key takeaways
- More than just cost savings: Outsourcing enhances the customer experience, providing customers with 24/7 support, service in their native language, and easier access to trained professionals.
- Factors affecting outsourcing cost: Various things affect the cost of customer service outsourcing, including region (onshore, nearshore, or offshore), the complexity of service, support volume, and the pricing model being used (per-minute, per-call, flat rate, or hybrid).
- Maximize ROI and avoid hidden costs: It’s important for businesses to be aware of possible hidden costs, such as onboarding fees and integrating new tech. Businesses can also maximize their return by setting clear expectations with SLAs and using customer feedback to ensure that their outsourcing partner is aligned with their values and goals.
Why outsource customer service? Key benefits beyond cost savings
When it comes to outsourcing customer service, it’s more than just a cost-cutting initiative.
Ideally, it’s done as a strategic investment to enhance the customer experience (CX) and customer satisfaction.
A major upside of customer service outsourcing is the access it provides to trained experts who are specialized in crafting high-quality customer interactions and providing empathetic, prompt, and accurate service.
This expert help increases the likelihood that your customers walk away feeling heard and satisfied, and higher the likelihood of loyalty to your brand.
Outsourced support also has the advantage of providing 24/7 availability to your customers, which is a huge advantage for modern businesses in today’s digital landscape.
By taking away the constraints of standard brick-and-mortar business hours, companies are able to serve a global customer base.
That’s even before considering the agility that customer support outsourcing provides, making it easier to increase operational flexibility without superfluous spending on staffing and overhead.
Factors that influence the cost of customer service outsourcing
There are multiple variables influencing the overall cost of outsourcing customer service.
One of the biggest ones is a particular model of outsourcing you’re working with.
For instance;
Onshore (working with a partner in your own country), nearshore (in a nearby country), and offshore (through an overseas partner) all differ in cost.
An Onshore option tends to have the highest labor costs, while offshore models tend to be the most affordable, with nearshore falling somewhere in between.
READ MORE: Onshore, Offshore, Nearshore: Which is Best?
The complexity of your services also play into the overall cost, with more basic customer inquiries being more affordable than advanced technical support options which may require more expertise and experience.
The volume of customer interactions you expect is also a major consideration, as scaling up the amount of customers you can support at once tends to reduce the per-interaction cost of doing business.
Finally, omnichannel support, while preferable, can sometimes drive up the overall cost of outsourcing customer service, since it requires agents who are comfortable and skilled at managing multiple communication platforms at once.
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Cost benefits of outsourcing customer service
Outsourcing customer service is known to significantly reduce the overhead and operational expenses.
Shifting those expenses to an external partner allows you to focus on internal processes, eliminating the need for costs and distractions from your core, like:
- facilities
- utilities
- infrastructure
- equipment
- ongoing training and staffing costs
A great customer service outsourcing partner will also give you access to experienced and fluent multilingual agents for much less than the cost of doing so in-house.
Outsourced customer service also makes it that much easier to satisfy and retain customers by providing 24/7 service at affordable rates.
READ MORE: Call Center Outsourcing Costs Explained
Average costs for customer service outsourcing by region
Hiring outsourced customer service can vary significantly based on many different factors, one of them being the region you outsource to.
While the precise package of contact center services you hire will affect the overall price you pay, the average cost of customer service outsourcing varies significantly from region to region.
Though times change and these numbers aren’t a quote or guarantee, here are some general ballpark estimates for what you can expect to pay for customer service outsourcing depending on the region.
Types of customer service outsourcing pricing models
Outsourced customer service partners differ in the pricing models they use to charge clients.
A few of the most common pricing models include:
1. Per-minute or per-hour pricing
In this model, clients are charged based on the amount of time agents spend interacting with customers, either on the phone, in messages, or on other channels.
This model is preferable for businesses without consistent volumes of customer calls and other interactions, since it allows for flexible staffing without the need for long-term commitments.
2. Per-call or per-inquiry pricing
Instead of billing based on the amount of time spent communicating, this model focuses on the individual contacts.
This arrangement works best when interaction times are more predictable and makes budgeting a lot simpler.
3. Monthly flat rate for dedicated teams
This model is most suited to businesses that require full-time customer support and consistent staffing and quality.
When outsourcing through this model, your business receives a dedicated team of agents who work exclusively on your account, as an extension of your brand.
4. Hybrid models and customizable solutions
Some businesses have niche business models and unique needs, prompting some of them to opt for a custom mix of the above pricing structures to suit their business.
READ MORE: Call Center Rates and Pricing
Potential hidden costs in customer service outsourcing
Though it’s true that outsourcing customer service offers cost savings, careful businesses should also be aware of potential hidden costs.
For one, some outsourcing partners include initial training and onboarding fees, requiring clients to help offset the costs of starting new customer service operations.
Another big factor is technological integration.
The process of aligning your tech and infrastructure with an outsourcing partner may require you to spend money on software or licensing fees.
Finally, since data privacy and security often require an additional investment, staying compliant with important industry regulations like GDPR and HIPAA can add to your total expenses.
Making the most of your investment in outsourced customer service
In order to maximize the value of the investment you make in customer service outsourcing, it’s important from the get-go to set clear expectations with your partner and Service Level Agreements (SLAs) that thoroughly outline all the important aspects of the partnership.
These include matters like regular performance reviews based on your most important KPIs, allowing you to check in with the quality of your outsourcing partner’s work, and ensure future success.
It’s also crucial to utilize the real feedback of your customers to drive your improvement, whether it’s through surveys, comments, or the content of the calls and interactions themselves.
By ensuring that your outsourced customer service is fully aligned with the values and goals of your business, your outsourcing partner can become a seamless extension of your brand.
