Pros, Cons, and Best Practices for Call Center Outsourcing

Call center outsourcing is a strategic move many businesses take to optimize customer service and reduce operational costs. This involves delegating customer service tasks, such as answering inquiries and resolving complaints, to a third-party call center outsourcing solution provider.

Ever dialed customer support and found the person on the other end residing halfway across the globe? That's call center outsourcing in action! While it holds enticing benefits, weighing these against potential drawbacks is crucial.

This guide dives deeper into the pros, cons, and best practices for outsourced call center solutions. With a clearer understanding, you'll be able to make an informed decision on whether this strategy is a match for your business needs. Read on to uncover some surprising insights!

Why Would a Company Invest in Call Center Outsourcing?

Companies may choose to invest in call center outsourcing for numerous reasons. Fundamentally, this decision is often driven by the desire to provide exceptional customer service while reducing operational costs.

But that's not all! Here are more reasons why businesses may choose to outsource customer service.

1. Focus on Core Business Functions

Outsourcing customer service allows businesses to focus on their core functions. For instance, a tech startup can concentrate on enhancing its software features without getting sidetracked by the nuances of customer support. The outsourced call center solutions take care of that!

2. Access to Expertise and Technology

Third-party call centers often have well-trained staff and advanced technology for handling customer queries efficiently. Outsourcing prevents companies from adapting to the latest customer service technologies and training.

3. Scalability

During high-volume periods, such as holiday seasons, outsourced call centers can ramp up their services to handle an influx of calls. Similarly, during quieter times, they can scale down operations. This kind of scalability is difficult to achieve with an in-house call center.

4. Cost Savings

A crucial advantage of call center outsourcing is cost savings. Companies save on the overhead costs of establishing and maintaining an in-house call center, including staff salaries, training, infrastructure, and technology. This freed-up capital can then be reinvested into the core business.

5. Ease of Expansion

Call center outsourcing makes it easier for businesses to expand into new markets. The third-party call center solutions provider can quickly set up operations in the target country and manage customer service. This eliminates the headaches associated with setting up an in-house team.

Pros of Call Center Outsourcing

When considering call center outsourcing, it's important to consider the potential benefits and drawbacks. Let's look at the pros of call center outsourcing first.

1. Costs Less Than Hiring an Internal Call Center Team

Outsourcing call center operations often results in significant cost savings compared to maintaining an internal team. This stems from eliminating overhead costs such as employee salaries, benefits, office space, equipment, and training expenses. Instead, these costs are absorbed by the outsourcing provider, and businesses pay a predetermined contract price.

For example, a company employing a 100-person call center can spend upwards of $2 million annually on salaries alone. In contrast, outsourcing the same volume of work to a provider in a lower-cost region could reduce this expense by up to 50%, depending on the specifics of the contract and the location.

According to research by Deloitte, 60% of companies cite cost-cutting as a primary reason for outsourcing, clearly indicating the financial advantages of this option. Therefore, call center outsourcing is a strategic move to streamline operations and allocate resources more efficiently.

2. Allows National and International Expansion

Call center outsourcing significantly eases the process of national and international expansion. Instead of investing time and resources into building a customer service department from scratch in every new market, businesses can liaise with their existing outsourcing partner to provide services in the new locations. This is particularly effective if the call centers utilize Voice over Internet Protocol (VoIP) or Customer Relationship Management (CRM) systems.

These technologies allow for seamless communication and customer management across different geographical areas. With VoIP, agents can handle calls from any part of the world without internet access. Similarly, CRM systems enable managing and analyzing customer interactions effectively, ensuring that they will receive consistent, high-quality service no matter where your customers are.

For example, consider an e-commerce business venturing into the European market. Instead of setting up a new call center, they can expand their outsourced call center operations. The call center agents, equipped with VoIP and CRM systems, can provide top-notch customer service to the new market, ensuring the business's successful expansion.

3. Allows 24/7 Customer Service

Providing 24/7 customer service is a game-changer in today's hyper-connected world. It ensures that customers can receive assistance whenever needed, irrespective of their timezone or your standard operating hours. This level of availability can greatly enhance customer satisfaction and foster brand loyalty.

Consider an online retailer that operates in multiple time zones. While the company headquarters may be fast asleep at 3 AM, a customer halfway around the globe might be wide awake and needing assistance. With 24/7 outsourced call center solutions, this nocturnal customer can receive immediate help.

In other words, customers are no longer content with just a "9 to 5" customer service. They want help on their terms, whenever needed, and through whichever channel they prefer.

4. More Flexibility in Scheduling

In-house customer service centers may struggle to cope with sudden surges in call volumes, requiring businesses to hire temporary employees or impose overtime on existing staff. Both these options can increase operational costs and compromise service quality.

On the other hand, call center outsourcing providers have the resources to adjust to fluctuating call volumes swiftly. Their large pool of trained customer service agents can be quickly deployed to manage the excess workload. This ensures uninterrupted, high-quality customer service, even during peak seasons, without incurring extra costs or overworking your employees.

5. Can Act as a Call Overflow Solution to Augment Your Existing Team

In addition to functioning as a standalone customer service solution, call center outsourcing can complement an existing internal call center. This is often referred to as call overflow management.

When a surge in call volumes overloads an internal call center, causing long wait times and frustrated customers, the overflow calls can be directed to the outsourced call center. This ensures that every call gets answered promptly, maintaining high customer satisfaction.

For instance, consider a retail company during the holiday shopping season. Their internal call center may typically handle 500 calls per day. However, during the festive period, they might receive up to 1000 calls daily. Rather than doubling their workforce for a short-term surge, they could use an outsourced call center to handle the extra 500 calls.

Cons of Call Center Outsourcing

With the pros aside, let's look at some of the drawbacks of call center outsourcing.

1. Could Be Communication Barriers

Potential communication barriers, such as language proficiency or cultural misunderstandings, may arise when dealing with outsourced call center solutions.

For instance, if a call center is outsourced to a country where English is not the first language, agents might struggle with colloquialisms, slang, or accents, leading to customer miscommunications. These misunderstandings can result in customer frustration and a poor customer experience.

2. Outsourced Employees May Not Be as Knowledgeable

While call center outsourcing provides many benefits, one potential drawback lies in the lack of product knowledge and understanding of the company ethos among outsourced employees. In-house customer service representatives usually receive extensive training about the company's products or services and are versed in the company's culture and values. This insider knowledge allows them to solve customer issues more efficiently and provide personalized services that resonate with the brand's voice.

However, outsourced call center agents often work with multiple companies and may not have the same depth of knowledge about your specific business. This can result in longer call handling times and a less personalized experience for your customers.

According to research, customer service is a significant driver of customer loyalty and can impact future revenue. Thus, while outsourcing can bring cost benefits and greater flexibility, companies must also weigh these advantages against the potential drawbacks regarding service quality and customer satisfaction.

3. Less Collaboration

Another potential disadvantage of call center outsourcing is less collaboration between in-house teams and outsourced personnel. Typically, when customer service is managed in-house, there's an ongoing dialogue and exchange of ideas between different departments. This interaction fosters a rich, collaborative environment, ensuring everyone is aligned towards a common goal - delivering exceptional customer service.

In contrast, with outsourced call center solutions, this level of collaboration may be missing. The physical distance and lack of personal interaction can hamper communication and alignment, leading to disjointed customer service. Furthermore, outsourced agents may not comprehensively understand the company culture or internal processes, which can affect the quality of customer interactions.

4. No Control Over Individual Hiring Practices

When outsourcing customer service operations, businesses must also give up control over individual hiring practices. When selecting candidates for an in-house team, companies can conduct rigorous background checks and interviews to ensure that only the best personnel are hired.

However, when it comes to call center outsourcing providers, a company doesn't have direct access or control over individual hiring practices. Thus, they must rely on the provider to hire staff that meets their requirements and standards.

5. Less Emphasis on Customer Satisfaction

Considering the potentially detrimental effects of outsourcing on customer satisfaction, businesses must tread carefully. According to a report by Forbes, 58% of consumers say they've spent more money to do business with a company that delivers great service.

Since the main focus of outsourced call centers is cutting costs, customer satisfaction may take a backseat. This can have negative ramifications for customer loyalty and long-term revenues. Companies must work closely with their providers to balance cost savings with exceptional service quality.

6. Removes Local Jobs

The call center outsourcing market is growing at a substantial rate. According to a report from Grand View Research, the global process outsourcing market size was valued at USD 261.9 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 9.4% from 2023 to 2030. This surging growth, driven by the need for businesses to reduce operational costs and focus on their core competencies, has implications for local employment.

While outsourcing may lead to cost savings for companies, it also removes domestic jobs, which can harm the local economy. When call center functions are outsourced to countries with lower labor costs, fewer jobs are available locally, leading to higher unemployment rates.

For instance, as per the U.S. Bureau of Labor Statistics, the number of customer service jobs in the United States is anticipated to decrease by 4% from 2021 to 2031, and one of the causes is outsourcing. This trend could exacerbate economic inequality and has significant social implications that must be considered.

Best Practices for Implementing Call Center Outsourcing Solutions

While there are some drawbacks to call center outsourcing, these can be mitigated if businesses choose the right provider and use best practices. Here are a few tips that companies should consider when implementing outsourced call center solutions.

Provide Clear Documentation on Processes and Workflows

Clear documentation of your company's processes, procedures, and workflows is essential when implementing call center outsourcing solutions. This documentation should outline the following:

• Specific tasks,
• Responsibilities, and
• Performance expectations required from the outsourced call center team.

It helps ensure that both parties understand how operations should be conducted, reducing the chances of misunderstandings and errors.

Choose Call Centers with Experience in Your Industry

Selecting a call center with prior experience in your industry or a similar field is crucial. Such call centers will be familiar with the type of products or services you offer, the common issues customers face, and the specific language and tone appropriate for your target audience. This industry expertise leads to a smoother onboarding process and quicker proficiency for the outsourced agents.

An experienced call center can bring valuable insights and best practices, contributing to better customer interactions and higher service quality.

Assign the Outsourced Call Center a Specific Role

Clearly define the outsourced call center's role in your overall customer support strategy. Whether they handle inbound calls, outbound sales, technical support, or a combination of tasks, having a specific role ensures that the call center focuses on its strengths and aligns with your business objectives.

This specialization improves agent training and allows the outsourced call center to develop a deep understanding of the assigned tasks, leading to increased efficiency and customer satisfaction.

Look for a Call Center with a Similar Organizational Culture

While finding a call center with an identical organizational culture may not be possible, seeking one with a similar set of values and work ethic can contribute to a more harmonious outsourcing partnership. Shared values can lead to

• Better communication,
• Smoother collaboration, and
• Teamwork between your internal team and the outsourced call center.

Additionally, compatibility in organizational culture often translates to greater alignment in providing a consistent customer experience, reinforcing your brand image across all touchpoints.

Keep Critical Functions In-House

While outsourcing can bring numerous benefits, it's crucial to identify the core functions that should remain in-house. For example, your internal team should handle the following:

• Highly sensitive customer data,
• Strategic decision-making processes, and
• Activities closely tied to your brand identity.

By retaining control over essential operations, you can maintain high quality, security, and strategic direction while outsourcing other non-core functions for improved cost-effectiveness and flexibility.

3 Best Call Center Outsourcing Companies

You've understood the basics of call center outsourcing solutions and best practices for implementation. Now, let's look at three leading providers in this space.

Simply Contact

Source

Simply Contact is a renowned call center outsourcing company with a strong presence in the industry. They offer various services to businesses seeking to enhance customer support and communication capabilities. They focus on providing personalized solutions to meet each client's unique needs.

Services offered by Simply Contact include the following:

Maxicus

Source

Maxicus is a leading call center outsourcing company that delivers exceptional customer experiences. Their team of skilled agents undergo rigorous training to provide top-notch customer support services. Maxicus strongly emphasizes leveraging technology to optimize its operations and improve client satisfaction.

Some of the services Maxicus offers include the following:

Helpware

Source

Helpware is a customer-centric call center outsourcing company that focuses on delivering exceptional customer experiences through a dedicated and skilled workforce. They cater to various industries and tailor their services to meet clients' requirements. Some of the services this call center outsourcing solutions offers are listed below.

Conclusion

Call center outsourcing is a double-edged sword. While it offers significant cost savings and operational efficiencies, it has potential downsides like decreased customer satisfaction and the loss of local jobs. However, implementing best practices can help mitigate these challenges.

Clear documentation, choosing the right partner, and retaining control over critical functions is key. A significant part of these best practices is employing the right technology.

That's where Ringy CRM comes into play. Ringy CRM is a powerful platform that aids in managing customer interactions efficiently. With features like calling, real-time analytics, and comprehensive customer profiles, it's a valuable tool for in-house customer service teams and outsourced call centers.

Remember, the right technology partner can significantly enhance the effectiveness of your call center outsourcing strategy. Explore Ringy CRM today and take your customer service to the next level.