- 78% of customers say customer service is a factor in determining whether or not to shop with a given company
- 68% of customers will pay more for a product or service if the brand is known to offer great customer service
- Companies who prioritize exceptional customer service experiences tend to see revenues 4-8% higher than the market.
Advantages of In-House Customer ServiceWithout a doubt, managing customer service in-house offers plenty of advantages. The big three are: Greater control and oversight. As with any part of your business, when you manage it yourself, you have complete oversight and control over any questions, decisions, operations and management. This can also allow you to make faster decisions, since there may be less people involved to work with. Enhanced knowledge of your products and services. When you keep your team in-house, they’re fully integrated with all of your other employees—sitting in on the same meetings, receiving the same quarterly updates, and going through the same new-employee onboarding. They’re also more likely to mix and collaborate with members of other teams, thereby creating deeper knowledge of your company, brand, operations, policies and products. The depth of internal knowledge is difficult to outsource. Deeper integration with other areas of your business. Similarly, internal teams are easier to integrate with other business functions. Want your customer service team to collaborate with your marketing? Want your sales team to gather customer feedback from your customer service team? In-house operations are the easiest way to make that happen.
Scenarios Favoring In-House Customer ServiceIn-house customer service—and the advantages it offers—can be a great benefit for some businesses. Some of the most common examples of in-house customer service that really works include: Startups and Small Businesses. If you don’t need many agents—or perhaps don’t need even full-time customer support right now—in-house customer service can be more cost-effective. Perhaps your marketing and sales team can manage customer service part-time, alongside other responsibilities, or perhaps you just need one or two agents who can manage phone lines for your small startup. In some cases, outsourcing to a call center that uses a per-usage or shared model is just as cost-effective, and relieves internal resources. Highly specialized or technical industries. In a few cases, training an outsourced team can be highly-demanding and require significant time and resources. This is most often the case with highly specialized or technical industries, where in-house experts would be able to provide more specialized support through deep knowledge of the product or industry. In these cases, an in-house customer service team makes sense, though it can be helpful to outsource some of the less technical aspects of customer service, such as telemarketing, lead generation or order taking, in order to free up time for internal teams. Businesses with specific privacy or security concerns. Outsourcing can provide great privacy and security for both internal and customer data, and in some cases even improve upon in-house models. However, if your business has specific reasons for needing exceptional privacy or security, it may make sense to maintain all of your data and customer service in-house. Either way, more trust is required when outsourcing and you need to ensure you find the right partner who can prioritize safety and security for your data and operations.
Challenges of In-House Customer ServiceOn the flip side, in-house customer service brings some significant challenges as well, especially as your business starts to grow and customer demand increases. Some of the challenges we see frequently with in-house teams are: Resource allocation and operational costs. When you crunch the numbers, it’s pretty clear that managing your customer service in-house is much more expensive, especially on the front end. There’s more overhead and startup costs, and you have to manage the full cost of everything internally—software, licensing fees, physical office space, equipment—whereas with outsourcing, these overhead costs are baked into their monthly costs and spread amongst all their clients. Staff recruitment, training and retention. This is a huge aspect of in-house customer service that requires significant time and additional resources. Team management can make or break your customer service, but that means you have to have HR staff, recruitment strategies, a focus on employee development and training, management and so on. Not only does this take time away from other priorities, it can be difficult to get right, which can make adequate staffing and training for your call center difficult. Ultimately, this leads to understaffing, burnout, and reduced customer service quality. Scaling operations. As your business grows, customer demand and communications typically grow proportionally. However, finding ways to scale your operations when you’re managing things in-house can be costly and time-consuming. For example, adding on a new hire means committing to another full-time salary, as well as recruitment, benefit, training and retention costs. Scaling too soon can lead to more non-productive time, reducing cost-effectiveness, but scaling too late reduces customer service quality and increases risk of burnout and agent turnover.
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Advantages of Call Center Outsourcing
As a result of many of these challenges, many companies turn to call center outsourcing to reduce costs, scale operations, bring in specialized expertise, improve service levels and so on. Some of the main benefits companies see when they outsource their call centers include:
Cost efficiency and scalability. In contrast to the difficulty of scaling in-house operations, outsourced call centers are much more cost-effective and scalable. Since increasing or decreasing the size of your team is much more straightforward, you can easily scale up for busy seasons—and then scale back when demand decreases, allowing you to only pay for what you really need. In addition, there’s very little in the way of overhead costs, team maintenance, and software you have to pay for, allowing you to access best-in-class resources without blowing your budget.
Access to specialized skills and technology. Speaking of best-in-class resources, outsourcing can allow you to add specialized resources to your team—whether that’s technology or people. Hiring experts with specialized skills in-house can be costly, and you may not need them long-term or full-time. With an outsourced team, you can run short-term projects with experts without the need to hire them or pay them long-term. You can also get specialized skills in your agents—such as bilingualism or omnichannel experience—from areas of the world where those skills are more common, and therefore, less expensive, or hire only a few agents with those specialities rather than a whole team.
Round-the-clock customer support. Outsourcing allows you to establish a call center anywhere, which means you can benefit from disparate time zones and remote workers. Doing so allows you to more easily (and cost-effectively) offer after-hours or 24/7 customer support, without hiring overnight workers or paying a premium for them.
Scenarios Where Call Center Outsourcing Makes More Sense
Clients come to us from all kinds of industries with a variety of backgrounds and challenges they’re hoping to alleviate through outsourcing. But there’s a few common threads through many of the requests for outsourcing we see:
Rapidly growing or large-scale businesses. As businesses grow, they need to expand their teams—quickly—while still maintaining flexibility and scalability. In addition, as teams grow, the need for cost-effective support often becomes more important. As a result, we often hear from rapidly growing teams who are looking for the cost-effective scalability outsourcing offers, or from large-scale businesses who need to access large teams and cost-effective labor.
Companies looking for multilingual support. When you’re ready to expand your customer service into offering multilingual support, it’s much cheaper to outsource rather than hiring bilingual agents in-house. Not only is bilingual support easier to find in other geographic areas—especially when nearshoring, a common outsourcing option—it’s also easier to scale and offer a variety of languages when outsourcing. When outsourcing, your agents can offer round-the-clock support as well, ensuring all of your support, regardless of language, has the same benefits.
Organizations needing to improve customer service metrics. Sometimes counterintuitive, but it’s actually easier to improve your service level quality with an outsourced team. A quality outsourced team is 100% focused on your customer service, compared to an in-house team that may be stretched in other directions as well. In addition, outsourced call centers typically have access to experience and expertise that is difficult to find in-house. With more experience and fewer moving pieces, they can focus on what really matters—quality and improvement—and implement full-scale strategy and execution to your benefit.
Which is better for your team?
As you can see, there’s pros and cons to both options. Our recommendations? If you:
- don’t have enough customer service demand to warrant full-time agents
- are just getting started or growing a customer base
- have specialized security or technical requirements
it might be easier to opt for an in-house solution for the time being. However, if you:
- are trying to scale or grow your customer service to meet demand
- need increased flexibility and cost-effective solutions to customer service
- are looking for specialized skills or expanded coverage
- want to improve customer service metrics or customer satisfaction
then you should consider outsourcing. Outsourcing to a reliable and trusted call center, like Global Response, can not only free up internal teams to focus on core projects, but can also reduce expenses, give you access to additional expertise and best-in-class technology, improve service levels and grow your business and revenue.
Curious how an outsourced call center can grow your business? Connect with an expert from Global Response today.