Why Customer Service Outsourcing is a Game-Changer

Delivering excellent customer service is one of the most important things you can do to help your business succeed.

(In fact, some say that your company’s approach to customer service can actually define your brand — and potentially make or break your business.)

Of course, actually delivering such top-notch service isn’t easy. For many small businesses — especially those operating on a shoestring — meeting the customer’s needs in terms of service and support might not even be possible for the time being.

Which is why so many teams choose to outsource their customer service efforts altogether.

What is Customer Service Outsourcing?

Customer service outsourcing is a business practice where a company hires a third-party provider to manage its customer service functions, such as:

• Handling customer inquiries
• Providing technical support
• Managing customer complaints

Many of today’s top providers deliver various forms of proactive service on your company’s behalf — which is often where the true value of outsourcing customer service lies. More on this in a bit.

As things stand, roughly one in five small businesses outsource their customer service efforts in some way. Depending on the circumstances, a team may choose to outsource their customer service operations entirely, or they may choose to bring in a specialist to handle certain parts of the process.

(As a quick aside, customer service outsourcing is a subset of the broader topic of business process outsourcing. Since we’ve already covered this broader topic, this article will focus specifically on what you need to know when outsourcing your customer service efforts.)

Why Should You Outsource Customer Service?

As with all business decisions, you should only outsource your customer service operations if you have good reason to.

(And no, “I just don’t want to have to worry about it” isn’t a good reason at all. We’ll explain more in a bit.)

That said, let’s take a look at some of the potential benefits to small businesses that decide to work with third-party customer service teams.

1. Cost-Efficiency

By and large, the number one reason companies choose to outsource customer service is to save on operational costs.

It’s pretty simple:

If you can provide the same level of customer service (or higher) via a third party — and can save money while doing so — you need not think about it any further.

Ideally, you’ll end up making money off the deal as your outsourced partner helps you take control of your customer service operations. With their team of specialists at the ready, your customer service efforts will no longer be a “cost of doing business” — but rather a revenue-driver for your company.

Speaking of that…

2. Access to Experts and Expertise

When you outsource customer service, you're not just hiring workers; you're accessing a pool of trained professionals with a deep understanding of customer service best practices.

These third-party providers are typically well-versed in the latest industry trends, tools, and technologies, allowing them to deliver a high-quality customer experience to your audience. This is an especially important factor for small teams that barely have an “official” customer service team — if they have one at all.

(Note: Once you’re able to field a full customer service team in-house, make sure they’re fully trained. You can check out the following customer service training guide for more information).

These experts will also be able to help assess your customer service efforts as they currently stand to identify what’s working, what’s not, and where they will likely need to focus their attention. In cases where the provider is only taking over part of your operations, you may be able to solicit additional advice from them elsewhere as needed.

3. Scalability and Flexibility

Outsourced customer service teams are usually quite flexible, which enables them to serve a variety of clients with a wide spectrum of needs.

This means they’ll be able to scale with your business as it grows — and as your customers’ expectations evolve along the way. Or, if you eventually find that you’re able to take over some or all of your customer service operations, your third-party partner will be willing and able to make the necessary adjustments.

Similarly, your outsourced partner will be able to scale up or down based on seasonal need, fluctuating customer engagement, and other timely matters. This can help you save even further on operational costs, as you won’t be wasting money on superfluous salaried employees.

Finally, your outsourced customer service partner will (ideally) offer 24/7 service to your local and international customers as needed — and will be equipped to work with those from various cultural and linguistic backgrounds.

4. Technological Advantages

Your outsourced providers should bring a number of advanced customer service tools and software to the table that will supercharge their ability to serve your customers.

And, since they specialize in customer service, you can be sure that the tools they use are the best tools available for your purposes. What’s more, your outsource partners will be equipped to use these tools to their highest capacity.

(In contrast, staying in-house would require you to spend tons of time and money first finding the right tools to adopt, then training your employees in how to best use them.)

Your providers will also stay current with emerging customer service tools, potentially adopting new technologies throughout your partnership.

5. Risk Mitigation

Outsourced customer service teams are experts at managing the inherent risks of providing killer service to your customers.

For one, they understand how vital customer service is to the overall customer experience and brand relationship. To this end, they’ll work tirelessly to ensure you’re never at risk of losing customers due to poor service or support.

Secondly, they’ll be equipped to maintain legal compliance regarding data privacy and operational security. This alone can be invaluable to small healthcare practices and organizations in other protected industries.

Qualities to Look for in a Third-Party Customer Service Provider

Once you’ve determined that outsourcing your customer service efforts is the right move, you need to find the provider that will best meet your needs.

Here’s what to look for.

1. Pricing and Cost

First things first, you need to know for certain that the cost of outsourcing your customer service efforts will be lower than the cost of providing the exact same service in-house.

Yes, it’s important to compare pricing schemes and such; this much is obvious.

But you also want to consider more hidden costs, such as the cost of onboarding, scaling, and managing the relationship over time.

We’ll come back to this in a bit, but for now just keep in mind that there’s more to the cost of outsourcing customer service than the price of the offer.

2. Relevant Knowledge and Skills

If you’re going to outsource your customer service efforts, you should be looking for a provider that knows your company, industry and audience like the back of their hand.

(In other words, you don’t want a jack-of-all-trades type provider that can only provide surface-level customer service to your patrons.)

At the very least, your outsourced provider should fully understand:

• What your product is used for — and how to use it
• Who your customers are — and what they expect from your customer service experience
• Who your team is — and how they can integrate their services with your internal operations

3. Cultural Fit

It’s of critical importance that your third-party customer service team aligns with the culture of your team and your audience.

In a literal sense, this means they must be fluent in your team’s and audience’s native languages. As we’ll discuss, these linguistic barriers can derail your partnership before it even gets off the ground.

They must be able to figuratively speak your community’s language, as well. Having a deeper understanding of the culture of your organization — and that of your audience — will enable your providers to deliver more effectively, efficiently, and completely at every turn.

4. Dedicated Providers

Outsourced customer service teams usually operate in one of two ways:

• Offering dedicated agents to specifically work with your team and customers
• Offering shared agents that serve multiple teams and audiences as needed

All other factors being equal, you’ll want to look for the provider that fits the first option before going elsewhere. While it’s certainly possible for a team of shared agents to fulfill your customer service needs, a dedicated customer service team will be much less restricted — and will have more time and other resources to invest into your audience.

5. Use of Emerging Technology

As we said, your outsourced customer service team should be coming to the table with a ton of specialized tools and technology in hand.

When deciding on a provider, you need to know:

• What customer service tools they use
• How they use them to better serve your customers
• How they stay ahead of the curve when it comes to emerging technologies

You also want to be wary of teams that claim to use cutting-edge customer service technology — but are really just doing what everyone else is doing. Especially with the recent deluge of AI-powered tools, you’re bound to come across teams whose proficiency with modern tech fails to live up to their promises.

6. Reputation, History, and Future Potential

Tying in everything we’ve discussed thus far, you want to be sure that your outsourced customer service team has a reputation for success — and that they show no signs of slowing down in the future.

To this end, you can dig into the provider’s:

• Customer reviews, testimonials, and other social proof
• Earned publicity from current and past years
• Press releases and other announcements regarding future plans

Also, consider how the provider has responded to customer reviews, publicity, and the like. The best teams will be those who learn from both positive and negative feedback — and that make ongoing improvements to their operations based on what they learn.

Potential Challenges of Outsourcing Customer Service\

As we said earlier, you shouldn’t expect to just hand off your customer service operations to a third party and never think about any of it ever again.

(To be sure, this approach will almost certainly lead to disaster — for your customers and for your business.)

As you begin the process of bringing in your third-party provider, be prepared to face at least a few challenges along the way.

Such as…

1. Misaligned Goals and Expectations

If your outsourced partner doesn’t fully understand the goals and motivations behind your customer service initiatives, they won’t be able to execute on them.

Here, we’re talking less about the “basic” goals of customer service, and more about the unique ways in which you hope to differentiate your customer service experiences from your competition. Misalignment here will lead to a flat experience for your customers — which will ultimately end up damaging your brand’s reputation.

2. Barriers and Silos

As we’ve touched on, there are a number of potential barriers that can hinder your partner’s productivity and damage your relationship.

For example:

• Language and cultural barriers can lead to mixed messages and misunderstandings
• Data silos can lead agents to act on outdated information or perform redundant tasks
• Technical barriers can cause bottlenecks in workflows, and can otherwise impede performance

In truth, these barriers often appear even when operating completely in-house. With an external party in play, it takes extreme vigilance to break down these silos before they become insurmountable.

3. Data Security

No matter what guarantees your customer service provider offers, you’ll always be putting your data at risk by handing it over to a third party.

Unfortunately, you’ll still be the one to suffer damages should your partner fail to protect your company’s or your customer’s sensitive information. Whether it’s losing trust in the eyes of your customers or facing hefty fines and penalties — or both — your partner’s carelessness is your responsibility.

4. Change Management

Bringing in a third-party customer service team in any capacity will be an adjustment for your internal staff members.

This in itself can be a challenge for all involved parties, and can lead to a number of poor outcomes if your change management processes aren't managed strategically. Internally, your employees may become confused as to why the change was made, what their current responsibilities are, and what the future holds for them within the organization. This confusion will eventually spread to your customers, who may end up asking similar questions about your team’s dedication to their success.

Outsourcing Customer Service: Best Practices

Finally, let’s dig into the key things you can do to ensure everything goes according to plan when outsourcing customer service.

1. Optimize Your Knowledge Management Processes

Having complete control of your knowledge management processes is prerequisite to outsourcing your customer service efforts.

(In fact, a poor approach to knowledge management will likely exacerbate many of the issues we just discussed.)

The goal of knowledge management is to capture, document, and store your team’s collective knowledge — and to make it accessible to all stakeholders as necessary. For our current purposes, doing so allows you to quickly deliver any information your outsourced provider may need to better serve your customers.

At the center of your knowledge management efforts:

A comprehensive, organized, and accessible knowledge base tool.

Find the right knowledge base software for your team with our helpful guide!

2. Set Clear Goals and Expectations

Your goals and expectations for your outsourced partnership should be clear from the onset of the relationship.

Internally, you should already have determined that outsourcing is the right option for your team. If you haven’t already, now’s the time to dig deeper into the specific metrics you hope to improve — and the business case for making these improvements.

From there, you need to communicate these goals to your partner as clearly and comprehensively as possible. While they’ll ideally help you improve your customer service efforts across the board, this will help them focus on the areas that matter most to your brand and your customers.

The best course of action here is to create a service level agreement with your customer service provider. This not only ensures both parties are in alignment from the start, but also provides you with legal recourse should your partner fall short of their duties.

3. Create Open Lines of Communication

Once you’ve created this alignment, you need to maintain it via open and ongoing communication with your customer service partner.

To start with, make sure your partners have access to the tools and channels you use to communicate internally and with your customers. You might even consider creating dedicated channels (e.g., on Slack) for relevant communication to take place.

While it’s important to enable both structured and unstructured communication between parties, you should have clear protocol in place for all such engagements.

This means defining:

• The frequency of meetings and other planned communication
• The preferred modes of communication for various purposes
• The defined point of contact for certain situations

On top of streamlining communication in a practical sense, make sure your provider knows they are always welcome to reach out for any reason — especially when it could lead to more opportunities for your company.

4. Strategic Relationship Management

Strategic relationship management is crucial to ensuring that your outsourced partnership continues to live up to your expectations.

Just as you do with your in-house employees, you can invest in your outsourced relationship by:

• Reviewing their performance regularly and collaboratively
• Providing feedback collected from your team and your customers
• Soliciting feedback as to how you can better enable them to provide value to your business

Supplier relationship management also involves assessing the relationship from a business standpoint — and knowing when it’s time to move on to a better option. So, you might consider building relationships with multiple providers that could potentially serve you better in the future.

5. Document Lessons Learned

For better or worse, every day spent working with your outsourced customer service team will provide multiple opportunities to learn and grow.

And it’s imperative that you don’t let these opportunities slip through the cracks.

Using your strategic knowledge management processes, develop a routine to document what’s working, what’s not, and what you could be doing better in terms of managing your outsourced relationship.

Also, be sure to document all that you learn from your partner that can be of use should you decide to take back control of your customer service efforts. Similarly, should you decide to move onto a better-fitting provider, you’ll be able to take what you’ve learned from the previous team along with you.

Using Helpjuice to Empower Your Outsourced Partners

As we’ve mentioned more than a few times, a solid internal knowledge base is vital to the success of your outsourced customer service team — and to your outsourcing initiatives, overall.

But you need to have the right software behind your knowledge management efforts to make it all worthwhile.

Which is where Helpjuice comes in.

With Helpjuice, you can easily:

Provide (and restrict) access to your knowledge documentation as needed
Collaborate in real-time to create new knowledge assets with your outsourced partner
Make iterative improvements to your customer service processes over time

Want to learn more?

Take Helpjuice for a free 14-day test drive by signing up today!