Customer service outsourcing: Understanding the landscape

Customers are looking for a high-quality experience, and organizations want to make sure they can deliver on this expectation. In doing so, organizations must make sure that their customers can have their questions quickly and effectively resolved through efficient customer service processes and advanced technology. To do this at scale at reduced cost and with no impact on the customer experience, even during unexpected disruptions, many are turning to customer service outsourcing. The industry is expected to exceed a global market size of $130 billion by 2028. Here's what customer service outsourcing is, the benefits and challenges associated with it, and when customer service call center outsourcing can benefit the customer experience.

Outsourcing typically involves engaging a third party to provide some or all of the organization's customer service activities. Organizations often decide to outsource customer call centers so that they can focus resources on the products and services that are central to their business. Customer experience technology has rapidly evolved in recent years, so organizations that find themselves struggling to keep pace with technological innovation may also consider outsourcing their contact centers along with their customer service.

Outsourcing allows an organization to focus on its core competencies—that is, the unique skills and expertise that enable it to excel and differentiate itself from the competition—while delegating customer service duties to a provider that specializes in that discipline. For organizations that are struggling to proactively manage contact center performance at a time when expectations for a high-quality customer service are only increasing, the ability to hand off this function to an experienced partner may be especially appealing.

When done well, customer service outsourcing can help an organization improve its customer service, improve customer retention and boost customer loyalty. The decision to outsource customer call centers can also open the door to new opportunities—enabling an organization to offer customer service 24/7 or in additional languages, for example. A trusted partner that stays up to date on industry best practices can also provide strategic guidance on how to continually improve customer service, allowing the organization to become even better at serving customers than it otherwise would on its own.

Outsourcing can also give an organization the agility it needs to navigate unexpected disruptions. For example, customers haven't always been able to visit locations in person or speak to customer service agents face-to-face during the COVID-19 pandemic. With up-to-date digital customer service operations, organizations can give them the prompt, responsive service they need. An outsourced customer service provider is often better positioned to quickly address these challenges, ensuring the customer experience doesn't suffer even as circumstances rapidly change.

When considering whether to outsource customer call centers, keep a few points in mind. For starters, it's important to identify which activities to keep in-house and which ones to outsource. If a particular customer service activity gives your organization a competitive advantage that it might lose in the process of outsourcing, for example, then you might want to consider keeping it in-house. If an outsourced customer service provider can't replicate a valuable customer service task that differentiates your organization from the competition, then it may be better to look at delegating other tasks that are easier for them to fulfill on your behalf.

Particularly if you're new to customer service outsourcing and have never worked with a partner before, it may make sense to begin by outsourcing customer service activities that don't directly impact your customer experience, like data analytics, basic support for general inquiries, order processing, dispatch or outbound customer service communications. Once you've successfully outsourced those activities and established a solid relationship with your outsourcing partner, you can look at deepening the engagement by outsourcing even more customer service tasks to it.

For those tasks that you do outsource, make sure to select a partner that prioritizes customer experience. Clearly communicate your expectations and make sure that certain service targets are guaranteed in any agreement you sign. At the same time, consider the softer side of the equation—how you expect your partner's customer service agents to treat your customers. After all, your customer service is a reflection of your organization's values. When you outsource customer call centers, you're entrusting your partner with your customer relationships. If your partner's customer service agents behave or communicate in a different way from your own customer service team, your customers will quickly notice the difference.