In-House vs Outsourced Customer Service: What’s Right for Your Business?
Considering outsourced customer service for the first time? It’s likely you already outsource many other areas of your business, but we get it: outsourcing those critical frontline interactions with your customers feels like a whole new ballgame. Which choice is better for your business? Below we discuss the pros and cons of in-house versus outsourced customer service.
The Impact of Outsourcing on Your Bottom Line
Let’s start with your bottom line first. If your contact center is based in a market like San Francisco, New York, Toronto, or Vancouver, the perks of outsourcing are immediately obvious. These metropolitan cities are the four most expensive places to live and work in North America. Rent for a 1-bedroom city apartment ranges between $2000-$3400 — almost double that for a family.
How does cost of living hit your bottom line? If your company is like most, your customer service agents are making entry-level wages — and it’s highly unlikely they can afford to live in the city on those paychecks. That means your target market for labor likely resides in the suburbs, faced with a long commute into a contact center located in your company’s urban HQ. Cue the high turnover …
Those sky-high rent dollars? They extend to the corporate world as well. That means the office space and infrastructure you need for an in-house contact center hit your bottom line like a lead balloon.
Finally, the cost of benefits and perks to retain talent once they’re on board has to be considered in the equation as well. In the US today, with near zero unemployment, attraction and retention of talent is more challenging, and dare we say, more expensive than ever.
Ultimately, then, when you take every dollar into consideration, outsourcing is often more affordable. Look for a partner whose contact center is located in a small market city, where cost of living is more reasonable and corporate real estate is lower than major metropolitan centers.
Bonus Hint: At Blue Ocean, our location in Halifax, Nova Scotia contributes to a positive economic model that benefits our clients. (Why? Just read our 10 Reasons to Locate Your Contact Center in the Friendly North).
The Pressure on Your HR and Recruiting Teams
The contact center is a people center. Success — and the satisfaction of your customers — comes from having the right people in the right place at the right time doing the right things. Depending on the size of your company, staffing, alone, for the customer care center can be a significant task requiring a huge investment of time and resources from your talent acquisition team.
Attracting candidates, especially for high volume programs or seasonal ramp-ups is hard work (and, yes, expensive.) It takes thoughtful strategy and innovative tactics, especially in markets where top talent, even at the entry-level, is harder to find. It requires time and money spent on digital marketing, job board subscriptions, applicant tracking systems, and more. And that’s just the beginning.
Screening, interviewing, reference checking, onboarding (hello, Payroll and IT, we have some set-up tickets for you!) … The list goes on. In short, staffing a customer care program is heavy lifting — and burden that falls on your HR and recruiting teams. And, of course, that’s on top of managing the employment of every other staff member across your organization. No pressure, folks.
In an outsourced environment, the outsourcer’s recruiting team’s primary focus is on hiring agents — they have refined the process and the profile development process over years of experience. The same is true for training — where the training team is focused on the delivery of effective training for applied knowledge in the contact center as their sole priority. Is your in-house training team dedicated specifically to customer care training? Or do they have other functional areas to support as well?
Outsourcing your customer care program also means that any risks related to employment law, privacy and security, and HR compliance is officially off your shoulders. Your HR people can breathe a sigh of relief.
Related Article: Why Your HR Team Will Love You for Outsourcing Your Customer Service
The Challenge of Seasonal Scalability
The challenges produced by the need to scale for peak season (and the corresponding need to scale back for quieter months) are many and varied: from sourcing and managing more space to adding infrastructure to the hiring and laying off seasonal staff.
Supporting significant seasonal peaks in customer contacts will impact (strain?) pretty much every functional area of your business: IT (outfitting work stations and deploying agent tech,) Facilities, HR, Finance, Legal, Training, Quality Assurance, and more. Scaling all of these areas to meet your seasonal ramp up and ramp down takes commitment, effort, and careful management from dozens of people.
In an outsourced model, none of this is your burden to bear. You can select a partner who has a track record of success supporting clients with similar requirements, a partner who is expert in managing the challenges of scaling up and down. And depending on your pricing model, an outsourced solution can drive cost out of your business — you only pay for what you use. You don’t have to carry staff through quiet months or through down-swings in your volume. The right partner will be an expert in optimizing their workforce in alignment with forecasts, even when your program experiences significant swings in volume. In our experience, if you have major seasonality to your business, you’re going to experience very real cost benefits and quality improvements through outsourcing.
The Leap to the Next Level
In an outsourced contact center, you should have access senior leadership whose primary focus is the evolution of your program. For instance, at Blue Ocean, in our quarterly business reviews, our clients expect us to tell them something about their business that they don’t know (check out this interview to find out more on our thoughts about strategic partnership).
How can that even be possible? Well, they are experts in their core competencies, but we are experts in their customer care and all that entails. All of our resources, from operations to reporting to data analysis are focused on one area of their business. It is our job to be thought-leaders in contact center management, to be on the leading edge of trends in the industry, to guide and advise our clients on evolving their customer support model. That singular focus is a benefit of outsourcing. We don’t have any other deliverables for your C Suite — just the execution of excellence in customer support.
The right partner will be passionately invested in helping to make your company the best it can be. They’re not in the market of simply checking boxes — they’re proactive and dedicated, with all their resources fixed on your (and your customers’) end goal.
In-House Vs Outsourced Customer Care
We’ve come across our share of naysayers who argue that in-house customer care trumps all alternatives. But in our experience, organizations can experience very real benefits in terms of driving cost out of their business while concurrently enhancing the customer experience by outsourcing to a strategic partner in the customer care space. From facilities management to your IT team to your C-suite, the benefits of outsourcing your customer care can enable you to focus on business growth and gain a competitive edge in your market.
At the end of the day, there’s never been a better time to outsource to an onshore partner. You can leverage the advantages of an onshore outsourcing model for less than you can do it yourself, especially if you’re in a major market.