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Customer Service Outsourcing: A Detailed Guide for 2024
Your business is flourishing and you're acquiring new customers. However, maintaining consistent, high-quality customer experiences becomes increasingly challenging as your customer base expands. Sound familiar?
Managing every detail of the customer journey is a monumental task, especially when done internally. Mistakes can occur, impacting your service quality and customer satisfaction. This is why delegating these responsibilities to trained professionals is crucial.
More and more enterprises are turning to customer service outsourcing as a strategic move. By outsourcing, companies can focus on their core products or services while ensuring customers receive the support they need.
This guide will explore types of customer service outsourcing, their benefits, implementation strategies and top alternatives. Let's begin.
What is customer service outsourcing
Customer service outsourcing involves hiring a third-party provider to manage your customer service operations. This can encompass a range of tasks, including answering customer inquiries, resolving issues and providing assistance through various customer service channels such as phone, email, live chat support or social media.
Customer service outsourcing allows you to concentrate on your core activities while ensuring customers receive high-quality support and assistance.
Types of customer service outsourcing
Customer service constitutes 22% of the total outsourcing industry, making it one of the top five outsourced business activities. Customer service outsourcing can take various forms, depending on your needs and preferences. Let's go through the primary types:
- Onshore outsourcing: Onshore outsourcing involves hiring a service provider within the same country. This option benefits you by ensuring ease of communication, cultural alignment and regulatory compliance.
- Offshore outsourcing: Offshore outsourcing entails partnering with a provider in a different country. While this option can offer significant cost savings, you need to consider factors such as language proficiency, cultural differences, technological infrastructure and time zone disparities.
- Shared service model: In the shared service model, contact center agents handle inquiries for multiple companies simultaneously. This model prioritizes efficiency and cost-effectiveness but may compromise personalization and brand-specific knowledge.
- Dedicated service model: Dedicated customer service involves agents solely dedicated to one company. This approach is ideal for businesses requiring tailored service delivery and in-depth product knowledge to meet specific customer needs.
Outsourced vs. in-house customer service
It’s understandable if you struggle to determine whether to outsource customer service or manage it internally. Both approaches offer distinct advantages and drawbacks. To gain a clearer understanding, let's explore the differences:
Aspect | Outsourced customer service | In-house customer service |
Cost | Often more cost-effective due to economies of scale and lower labor costs in offshore locations. | Typically, higher due to recruitment, training, salaries and infrastructure costs. |
Scalability | High flexibility to scale operations up or down quickly based on demand. | Limited scalability; scaling requires significant time and resource investment. |
Expertise | Access to specialized skills and advanced contact center technologies. Providers often have extensive industry experience. | Dependent on internal training and development programs. May lack advanced expertise. |
Control | Less direct control over operations and quality management. Requires robust service level agreements (SLAs). | Greater control over processes, quality and customer interactions. |
Fous | Allows businesses to focus on core activities and strategic initiatives. | Requires significant customer focus, management attention and resources, potentially diverting focus from core activities. |
Cultural alignment | Potential challenges with cultural differences and communication barriers, especially with offshore providers. | Better cultural alignment and communication due to shared values and geographical proximity. |
Customer experience | Can provide high-quality service but may lack brand-specific personalization. | Typically offers more personalized service aligned with the company’s brand and values. |
Regulatory compliance | Providers must adhere to local and international regulations, which can be complex to manage. | Easier to manage compliance with local regulations and company policies. |
Benefits of customer service outsourcing
Outsourcing customer service to a competent third-party provider can significantly alleviate the burden on your in-house team and offer numerous advantages, depending on your specific requirements. Let's examine some key benefits:
- Cost-effectiveness
Outsourcing customer care can be highly cost-effective. Third-party vendors already have:
- The necessary infrastructure to efficiently handle a wide range of customer needs.
- Trained personnel, available to provide comprehensive coverage.
- Streamlined processes to maximize efficiency without the need for trial and error.
In contrast, establishing an in-house solution would require substantial investments in time, money and resources.
- Enhanced scalability
Outsourcing customer service provides the flexibility to scale operations quickly to meet both current and anticipated business demands. For instance, consider a scenario where you anticipate a 50% increase in call volume during the holiday season. With an in-house solution, you would face the following challenges:
- Maintaining the existing customer service team size could lead to potential customer dissatisfaction and disengagement.
- Hiring additional staff and expanding infrastructure would incur substantial expenses.
An outsourced solution, however, alleviates the burden of scaling customer service operations, allowing for seamless adjustments to fluctuating demands.
- Increased revenue
According to CX statistics, customers with exceptional past experiences exhibited a remarkable 140% increase in spending compared to those with less favorable experiences. Customers often prioritize how a company treats them over the product quality or cost. Therefore, investing in superior customer service through outsourcing can lead to increased revenue.
- Higher focus on core competencies
Outsourcing customer service enables companies to focus on their core strengths by delegating customer service tasks to specialists. This strategic decision frees up valuable time and resources that can be redirected toward improving products and services. With customer inquiries managed externally, companies can dedicate more attention to innovation, market research and development.
How to outsource customer service in 2024?
Outsourcing customer service can streamline your operations, but how exactly do you adopt and implement such a model? Here are five essential best practices for customer service outsourcing in 2024:
Step 1: Select the right partner
First, select the right partner. Assess the company's track record, industry expertise and references. Then, perform comprehensive evaluations of the vendor's adherence to legal requirements, financial stability and the effectiveness of their training programs. If feasible, visit its operation centers for deeper insight into its culture and operations.
Establish clear criteria when choosing a customer service outsourcing company. Consider factors such as reputation, technology, language capabilities and pricing. Look for partners who can deliver services across multiple contact center channels, aligning with your service philosophy to ensure a seamless customer experience.
💡 Pro tip: Look for a vendor who incorporates AI in customer service specializing in your industry or niche. For instance, if your organization operates within the healthcare sector, choose a vendor capable of automating compliance procedures according to regulatory standards like HIPAA and enhancing efficiency by automatically applying diagnostic codes and treatment steps within your workflows.
Step 2: Set performance metrics and SLAs
Next, you need to establish service level agreements (SLAs) with your vendor and define the customer service metrics. These SLAs outline measurable standards such as data access and privacy, response times, availability and resolution rates, providing benchmarks for secure and efficient service delivery.
Monitoring key contact center metrics such as your agent's first call resolution rate and average handle time enables real-time insights into service quality. To consistently offer high-quality service, regularly review and adapt metrics to ensure they are aligned with evolving customer needs and market trends.
Pro Tip 💡: Engage with key stakeholders to set realistic and measurable targets. For example, you might aim for a 90% resolution rate within 24 hours, evaluated by closing tickets with high customer satisfaction ratings. For a SaaS company, this goal could be even more aggressive (e.g., within 4 hours) to meet industry standards and customer expectations.
Modern CCaaS platforms like Sprinklr Service utilize advanced AI models tailored to specific industries to manage various use cases, channels and functions.
Step 3: Leverage technology
Integrating your contact center CRM system with the external service provider's systems is crucial to maintaining seamless operations and secure data. Ideally, utilize secure APIs for integration rather than sharing login credentials, which enhances security and ensures data integrity. Here's what other aspects you must take care of:
- Helpdesk and ticketing system integration: Integrating the helpdesk and ticketing system allows seamless data flow between your in-house team and the outsourcing partner. This ensures that all customer interactions are logged and managed on a unified platform, offering you complete visibility 24/7. Also, ensure the outsourcing provider's access is controlled and monitored to maintain data privacy and compliance.
- AI-powered chatbots: Deploy AI-powered chatbots to handle routine inquiries and provide instant responses. This makes customer service scalable and allows human agents to focus on more complex issues. Train the outsourcing provider on your existing chatbot's capabilities and customer service workflows to ensure seamless integration and optimal performance.
- Training and knowledge transfer: Conduct comprehensive training sessions for the outsourcing provider to familiarize them with your workflows, products and customer service objectives. Provide detailed documentation and regular updates to ensure they are equipped to handle various customer service scenarios effectively.
💡 Pro Tip: When choosing an outsourcing service provider, ensure they have a strong track record of secure integrations and robust data protection practices. Conduct a thorough knowledge transfer (KT) process, including on-site training sessions and continuous support, to ensure the provider fully understands your processes and service expectations.
Step 4: Prioritize data security and compliance
Ensuring data security in customer service outsourcing is non-negotiable. In fact, your contact center CRM system should be embedded with robust security features. Here’s how to ensure stringent data security and compliance:
- Encrypted communication channels: Utilize secure, encrypted communication channels for all data exchanges between your company and the outsourcing provider. This prevents unauthorized access and ensures data integrity.
- Secure storage solutions: Implement secure solutions that protect customer data at rest and in transit. Ensure your outsourcing partner uses advanced cybersecurity tools to safeguard this data.
- Regular staff training: Regularly train staff on data privacy practices and security protocols. This includes recognizing potential contact center fraud and understanding contact center compliance.
- Global regulatory compliance: Ensure your outsourcing partner understands and complies with global regulatory requirements, such as GDPR and CCPA. This includes implementing robust data protection protocols and conducting regular risk assessments and incident response planning.
💡 Do you know?
Just in case you are not aware of all the ways Sprinklr ensures customer data security and combats cyber threats, take a moment to review your current customer service security protocol.
Detection & response
Sprinklr’s dedicated Detection & Response team specializes in threat detection engineering, vulnerability management, incident response and crisis communication management. This comprehensive approach ensures robust support for customers during security incidents and beyond, covering product operations, business systems and all corporate assets.
Infrastructure security
Sprinklr operates a fully virtual production environment within an Infrastructure-as-a-Service (IaaS) third-party cloud. Leveraging security controls from top IaaS providers, we partner with AWS, Microsoft and Google data centers in the US and Europe to ensure secure data hosting.
Network security
Sprinklr employs both reactive and proactive network security measures. The team monitors network activity 24/7 for anomalies, responding to security events within minutes. Proactive measures such as firewalls, cloud security posture management and network penetration tests provide a high level of protection. All sensitive data is encrypted during transit.
Step 5: Streamline communication
Once you've secured your digital estate, focus on streamlining your customer communication channels by leveraging your CRM framework. Effective communication with both customers and vendors is paramount in customer service outsourcing. Establish dedicated channels for customer inquiries and issue resolutions. Maintaining regular contact with your vendors is also crucial for seamless internal collaborations and effective problem-solving. To improve the process:
- Collaborate closely: Work with outsourcing partners through joint teams and regular feedback sessions to ensure alignment and continuous improvement.
- Crisis management training: Ensure the outsourced team is trained to handle crises efficiently and has predefined protocols in place to manage emergencies effectively.
- Customer feedback mechanisms: Implement robust feedback mechanisms, such as customer surveys, feedback forms, customer interaction analytics and social listening, to gather insights for process improvements and better service delivery.
Step 6: Establish comprehensive training modules
Training your outsourced team is crucial for maintaining high service standards. This involves thorough product knowledge transfer and a deep understanding of your features and customer needs. To provide personalized service, agents must embody your company's values and communication styles. Involve product managers, delivery managers and customer success teams in comprehensive training sessions. Additionally, brand marketers and communication experts who understand your brand positioning and voice can help the provider, as how you greet, listen to and reply to customers greatly influences customer engagement and customer empathy.
Wait, what about your knowledge base?
A knowledge base is a centralized repository containing information, documentation, articles, guides and other relevant content. It should be a comprehensive resource that is easily accessible to your agents. Ensure your agents are trained to retrieve information swiftly during live calls and chats without keeping customers on hold for long periods.
Information retrieval doesn’t have to be hard!
Sprinklr AI+ is pivotal in enhancing agent efficiency. Based on the conversation context, it automatically recommends similar resolved cases, relevant knowledge base articles and guided workflows to agents, helping them resolve customer issues 50% faster. Learn how Sprinklr knowledge base software works.
Top 5 alternatives to customer service outsourcing
Worried about quality control, loss of personal touch and data security with outsourcing? Worry not!
Here are the top five customer service software that offer excellent alternatives to outsourcing. These solutions not only address the main concerns but also provide zero capital investment, no need for coding and extensive customizability and flexibility that you might not get with outsourcing. Let’s dive in:
Sprinklr Service is an AI-native cloud-based customer service platform that delivers unified customer service across over 30 digital, social and voice channels. It offers real-time insights and scalability, providing an all-in-one solution that eliminates the need for multiple tools, making it a compelling alternative to traditional customer service outsourcing.
🚀Most popular features
- Unified agent desktop: Sprinklr Service's unified agent console enhances conversations and resolutions with AI-powered processes across voice and digital channels. Agents can access customer activity, case history, CRM data and survey results, all in one place.
- Quality management: Evaluate conversations on 30+ quality and compliance parameters using Sprinklr AI+. With AI-generated customer service scorecards, identify agent strengths and areas for improvement. Your customer-facing teams can also easily leverage Generative AI capabilities with just a few clicks, eliminating the need to learn new workflows or constantly switch between multiple screens.
- Analytics and reporting: Monitor end-to-end customer journeys and analyze real-time interaction data. Create multi-level dashboards to track business KPIs, team performance and daily targets.
2. Zendesk
Zendesk is a cloud-based platform designed to streamline customer service operations. It empowers businesses to provide support across various channels like voice, email, chat, ticketing systems, self-service portals and social media. With built-in analytics, Zendesk helps track and improve customer service performance by identifying areas for enhancement, such as response time and unresolved tickets.
🚀Most popular features
- Ticket routing
- Live chat software
- Knowledge base
- Native integrations
- Self-service portal
Must Check: Sprinklr vs Zendesk Comparison
3. Intercom
Intercom stands out for its live chat software that blends automation and human support. It emphasizes operational efficiency by utilizing AI bots to alleviate support teams from repetitive tasks.
🚀Most popular features
- Ticket and case management
- Automated responses
- Team inbox
- Messenger
- Bots
4. Genesys
Genesys Cloud CX provides a customer experience platform for smooth customer interactions across multiple channels. The solution focuses on improving customer engagement and support operations, utilizing features like AI-driven automation and analytics to optimize service workflows. It offers tools for monitoring online interactions and customer journeys.
🚀Most popular features
- Voice
- Web chat
- Auto dialer
- Agent scheduling and assignment
- Session routing
- IVR
5. Freshdesk
Freshdesk provides a customer support solution that effectively handles requests from diverse communication channels like email, web, phone, chat, messaging and social media. It converts these requests into unified tickets, streamlining the resolution process across channels. The platform also includes automation and AI features for ticket assignment, prioritization, agent assistance and canned responses.
🚀Most popular features
- Ticket management
- SLA support
- Workflow management
- Dashboards
- Omnichannel support
- Canned responses
- Email ticketing
Sprinklr – your alternative to customer service outsourcing
Customer service outsourcing can be cost-effective and enhance scalability, but it often compromises control and personalization. In today's competitive landscape, customer-centric companies cannot afford to take such risks when delivering tailored customer care.
This is where AI-powered solution suites like Sprinklr Service come into play. Sprinklr offers unmatched efficiency in compartmentalizing and executing service operations, ensuring high-quality, personalized customer interactions at scale. How about a customized product walkthrough of Sprinklr Service to explore what you can achieve with it?
Frequently Asked Questions
Outsourcing customer service reduces costs by eliminating the need for significant investments in infrastructure, technology and staffing. Service providers already have established systems and trained personnel, allowing businesses to leverage these resources without the associated overhead. Additionally, outsourcing can lead to operational efficiencies and lower labor costs, especially when utilizing providers in regions with favorable wage structures.
To ensure quality in outsourced customer service, establish clear service level agreements (SLAs) and key performance indicators (KPIs). Regularly monitor and review these metrics to maintain high standards. Conduct thorough training programs and provide continuous support to outsourced agents. Maintain open communication channels for feedback and hold regular performance evaluations. Leveraging advanced CRM systems and AI tools can also help streamline operations and maintain service quality.
When choosing customer service outsourcing, consider the provider’s track record, industry expertise and compliance with legal and regulatory standards. Evaluate their technological capabilities, language proficiency and cultural alignment. Review their security measures to protect customer data. Assess cost structures and ensure they offer scalable solutions. Finally, look for providers who can seamlessly integrate with your existing systems and align with your company's values and service philosophy.
