The strategic advantage of outsourcing customer service (and how to do it)

Companies that effectively cut costs can allocate more resources towards growth, innovation, and enhancing the overall customer experience. The relationship between cost savings and outsourcing customer service directly impacts the bottom line and long-term financial stability. Recent studies have shown us how:

1. Access to advanced technology: Companies can sidestep significant investments in costly customer service technologies and infrastructures, such as hardware, software, equipment, and other tools necessary for efficient and effective service delivery. A survey found that 59% of businesses outsource customer service tasks primarily to cut costs.

2. Flexibility: Companies can save up to 20% by outsourcing specific support tasks or entire customer service functions, as businesses can adjust team sizes based on demand.

3. Specialized expertise: Companies can save up to 30% in handling time and increase first-call resolution rates by up to 40%, resulting in cost savings and efficient issue resolution.

   Learn how Samsung Benelux achieves a +44 net promoter score (NPS) and 90% customer effort score (CES) with Teleperformance here.

4. Labor costs: The most significant cost component is often the workforce, including salaries, benefits, training, and other employee-related expenses. Shifting parts of or all of your customer service operations to countries with lower labor expenses can reduce costs by up to 60% and give you direct access to skilled professionals.

Beyond cost savings, the evolving landscape of outsourcing customer service and support in recent years has brought forth many benefits that contribute to businesses' overall success and efficiency. Some of these additional benefits include:

1. Partnership: Businesses can improve customer service offerings by forming strategic partnerships with technology providers. Such partnerships enable companies to access state-of-the-art technologies, software, and customer support tools without incurring the financial burden of continuous investment. Learn more about how to find the right tech partner here.

2. Modern solutions: Companies benefit from existing infrastructure and technology, which helps reduce upfront and ongoing maintenance costs. Outsourcing also enables businesses to quickly adjust to changes in customer service demand, as the provider's scalable technology solutions can handle increased call volumes or online inquiries.

3. Shared knowledge: Businesses benefit significantly by leveraging the knowledge and skills of service and software providers. This is especially true for technical support, language-specific requirements, and industry-specific expertise that may require more work to develop in-house. Doing so eliminates the need for extensive training programs and reduces associated costs.

4. Agility: Businesses need to be flexible in their operations to efficiently handle customer inquiries during peak periods while avoiding unnecessary expenses during slower periods. Scalability is the key to achieving this flexibility. It allows companies to allocate resources efficiently based on changes in customer demand. Instead of maintaining a large in-house team throughout the year, businesses can rely on outsourced providers to provide additional support when necessary.

5. Top talent: Companies can leverage a diverse worldwide talent pool to tap into skilled professionals from various regions and gain valuable cultural insights. This diversity is particularly advantageous for businesses that operate in multiple markets or aim to expand their global presence.

6. Prioritization: Outsourcing non-core functions enables companies to focus on strategic initiatives, allocate internal resources, and drive business growth.

7. Risk mitigation: Service providers can help businesses mitigate risks and adapt quickly to market fluctuations, regulatory changes, and unforeseen challenges.

8. 24/7 support and improved customer experience: Customers expect around-the-clock support due to the increasingly globalized business environment. As a result, many service providers can meet the demand for continuous service availability to provide instant responses regardless of time zone.

Setting objectives means having a clear vision for your organization, knowing what you stand for, and knowing what you need to be able to provide a concrete briefing to your chosen partner.

• Strategic alignment: Ensure every customer interaction contributes to broader business goals.

• Efficiency and effectiveness: Allocate resources judiciously for maximum value.

• Consistent brand experience: Reinforce brand values and strengthen loyalty—no matter the channel.

Selecting the right outsourcing or tech partner is critical to business growth and continual success. Exploring reputation, expertise, and cultural fit through extensive research is essential. Don't be afraid to ask for a proof of concept — after all, the proof is in the pudding, and anything on paper can look good.

• Thorough research: Investigate potential providers to ensure they meet your needs.

• Considerations: Evaluate expertise, reputation, and cultural fit to find the best match.

• Proof of concept: As a buyer, you must be clear about what you want. The partner is then responsible for proving the feasibility of a concept, which is why it is crucial to define your objective and goals beforehand.

— Wendy Mikkelsen, Senior Product Marketing Director, Khoros

Effective communication serves as the backbone of fruitful partnerships. Clear channels streamline processes and nurture transparency and trust between parties. It's important to share your organization's DNA with your chosen partners and stay involved in the execution of the operation down to the most minor details. It's also crucial to establish clear agreements with your partners in advance, including how to handle any conflict situations that may arise.

• Align on processes: Implement clear communication channels and utilize tools like email, chat, and video meetings to facilitate seamless team interaction.

• Transparency: Take the space to listen to your employees. For example, focus groups can foster an environment that encourages openly sharing relevant information.

• Foster a collaborative culture: Embrace the concept of failing fast, allowing you to quickly learn areas that need improvement. Creating an innovative, enjoyable atmosphere is essential - have fun with it!

Success hinges on more than delivering services — it requires a clear understanding of performance metrics and objectives. Defined KPIs serve as a compass, guiding both parties toward a shared goal and guaranteeing accountability.

• Identify relevant KPIs: These KPIs vary from one business to another, and each enterprise may prioritize different metrics. For example, are you focusing on response times across every channel or striving for higher customer satisfaction (CSAT) scores? Do you aim for improved first-call resolution (FCR) or reduce overall call volume through self-service options?

• Establish performance benchmarks: Setting the bar high is essential for pushing boundaries and achieving excellence. Performance benchmarks enable both parties to gauge progress, identify areas for improvement, and celebrate milestones.

• Monitor and evaluate continuously: Regularly assess performance against KPIs to gain insights into the efficacy of current strategies and inform data-driven decisions for continuous adaptation to changing customer needs.

Adopting technology to keep pace with the ever-changing customer experience landscape is essential. Innovation in service delivery can help simplify processes and improve the overall customer experience. However, it's important to ensure that technological solutions are compatible and integrate well with existing systems to drive efficiency and effectiveness.

• Leverage advanced technologies: Technology is the catalyst for transformation. Leveraging advanced customer service and support solutions such as AI-powered chatbots or agent assist tools enables automation, personalization, and scalability that you wouldn't be able to achieve otherwise.

  
  

  These technologies empower agents with insights and resources to deliver exceptional service that resolves issues more efficiently.

• Integration compatibility: To fully utilize the advantages of technology, it is important to have seamless integration. This means the new technology should be compatible with existing systems and processes to avoid service disruptions.

Outsourcing some or all of your customer service operations can benefit businesses across industries that want to improve their customer service experiences.

It’s important to partner with the right providers; establishing clear objectives and embracing innovation can help you achieve better efficiency, effectiveness, and customer satisfaction.

In today's complex marketplace, outsourcing can be a strategic ally, allowing you to focus on your core competencies while delivering excellent service that delights customers and drives sustainable growth.

The key to success is always being available for your customers wherever and whenever they need you. Khoros Service is a solution that helps enterprise businesses scale their customer service operations quickly, seamlessly blending synchronous and asynchronous modes. ​​We are firm believers in the idea that every component, whether it is AI-powered bots or business applications, should work together to enhance the efficiency and effectiveness of customer engagement strategies.

Our customer service software allows brands to serve customers on their digital channel of choice with unmatched operational insight to boost satisfaction and reduce costs. When you unify multiple channels in a single workflow, you empower your agents with the ability to engage across all touchpoints, including but not limited to:

• Messaging apps like WhatsApp, Apple Messages for Business, and Google Business Messages, Line

• Social networks like Facebook, X, LinkedIn and WeChat

• Review sites, like Google Play Store, iOS App Store, Yelp, and Trustpilot

• Brand-owned channels, like web chat, in-app, email, SMS, and voice

• Owned communities, forums, and knowledge bases