Created with love and coffee by Carlos Posadas

The Double-Edged Sword of Customer Support Outsourcing: Advantages and Pitfalls

Carlos Posadas

Business Development Executive at Atento

Published Jun 6, 2023

Customer support holds an irreplaceable position in any business. Why? Because your customers are the backbone of your enterprise. It's through customer service, tech assistance, or help desk support that you can ensure their happiness and loyalty. However, managing a smooth-running customer support operation often calls for expert talent, cutting-edge tech, and continuous resource updates. When these demands become too daunting, many businesses turn to outsourcing. But is it always a smooth ride? Let's dig into the pros and cons of customer support outsourcing services.

What is Business Process Outsourcing (BPO)? It’s about sharing some of your business tasks with a third-party provider, effectively transferring the responsibility for both front-end and back-end operations. Customer support, due to its direct impact on business success, is often a favorite to outsource.

Before jumping into outsourcing, let’s examine its potential upsides and downsides.

11 Benefits of Outsourcing Customer Support Services

Economical Operation: A 2020 survey by Deloitte revealed that about 70% of companies saw significant cost reduction by partnering with BPO service providers. Outsourcing customer support allows access to expert staff and resources, making it a cost-effective move.
24/7 Service: BPO service providers typically operate non-stop, ensuring there's always someone available to cater to your customers, enhancing customer experience and satisfaction.
Omnichannel Solutions: More than half of retail businesses have invested in omnichannel services, opening up multiple avenues for customer interaction.
Multilingual Services: BPO companies bring the world together through multi-lingual services, offering global customer support in various languages.
Prompt Response: Outsourced customer support often yields quicker responses, significantly improving customer satisfaction.
Expert Team: Outsourcing opens the door to a global talent pool. These professionals are usually rigorously screened, trained, and certified to ensure they possess the necessary skills and knowledge.
Simplified Management: BPO providers ease the task of managing a large customer support team, reducing the burden on your in-house team.
Access to Advanced Resources: BPO providers equip businesses with access to the latest technology, equipment, and other resources that can improve customer support functions.
Boosted Business Performance: With outsourced customer support, businesses can significantly enhance efficiency, quality, and customer experience, leading to increased customer satisfaction and profitability.
Focus on Core Functions: By outsourcing customer support, businesses can free up time and resources to concentrate on their core operations.
Business Expansion: Outsourcing has been instrumental for many small businesses and startups in their journey towards growth and success.

6 Downsides of Outsourcing Customer Support Services

Business Goal Misalignment: Outsourcing can lead to a divergence in objectives between your business and the BPO provider.
Brand Misunderstanding: If your BPO provider doesn’t thoroughly understand your brand, it can negatively impact the quality of customer assistance they provide.
Lack of Customer Centricity: Some BPO firms might not prioritize your customer support operation, leading to a decline in service quality.
Cultural Differences: Offshoring can sometimes lead to misunderstandings or miscommunications due to cultural differences.
Communication Hurdles: Effective communication with your BPO provider is crucial, and any barriers can lead to complications in achieving business goals.
Potential Security Risks: When you outsource, you entrust your business data to a third party. If they don't have stringent security measures, it can expose your business to cyber threats.

The Benefits and Drawbacks of Delegating Customer Support Services

Clients are the primary pillars of any business, thereby making customer support indispensable for ensuring their contentment. Whether delivering customer service, technical aid, or help desk services, it's essential to address the requirements of the customer effectively.

Regrettably, the management of customer support operations can be intricate. These operations necessitate a proficient workforce, cutting-edge technology, and continually updated resources. Faced with such a challenge, many businesses look to outsourcing as a solution. However, before making this move, it's vital to consider its merits and shortcomings.

This discussion seeks to delve into the benefits and drawbacks of outsourcing customer support services. Continue reading to help inform your decision on outsourcing.

5 Benefits of Delegating Customer Support Services

To begin our discussion on outsourcing customer support, we need to first clarify the concept of business process outsourcing (BPO). BPO involves entrusting a segment of your business operations to an external service provider, allowing this third-party to manage your front and back-office functions.

Companies, regardless of size, commonly outsource customer support as it significantly influences business success, positively or negatively. Customer support is a customer-oriented task that plays a crucial role in determining the prosperity of a business.

The merits of delegating customer support services include:

1 Reduction in Operational Costs: Deloitte's 2020 global outsourcing survey identified cost-cutting as the primary motivation for outsourcing. Approximately 70% of companies partnered with BPO service providers to lower operational costs. Outsourcing has emerged as a viable method of cost reduction without compromising business processes.

Collaborating with a BPO company tends to be more cost-effective than hiring employees and investing in technology. Delegating your customer support grants you immediate access to a competent workforce and resources, thus providing long-term savings.

2 Round-the-Clock Availability: The nature of customer support demands 24/7 service availability. Customer service specialists must always be prepared to assist, thereby enhancing the customer experience and increasing customer satisfaction.

The majority of BPO service providers operate 24/7, with customer support specialists working in shifts to cover non-business hours. Therefore, outsourcing serves as an effective solution for ensuring round-the-clock customer support.

3 Multiple Support Channels: Did you know that over half of retail businesses invest in omnichannel solutions?

Retailers not selling across various channels risk losing up to 30% of their sales, while those with more than three channels increase their order rates by 494%.

Omnichannel solutions are excellent for customer support, especially in the retail and e-commerce sectors. When looking for a BPO service provider, consider those offering more than just a call center. Opt for outsourcing email support, live chat, and self-service options. By doing so, you can offer your customers multiple channels for a seamless experience.

4 Multilingual Services: The BPO industry has essentially made the world a global village. Companies can now interact and collaborate with other businesses across vast geographical distances, thanks to digital tools and technologies.

One advantage of outsourcing is the provision of multilingual services. BPO assists retail and e-commerce businesses in catering to global customers. If you aim to reach a global audience, consider hiring customer support specialists who are fluent in various languages besides English. For example, you could hire a Latin American BPO company to cater to your Spanish-speaking market.

5 Quick Response Time: Fast response time is a crucial aspect of customer support. Customers shouldn't have to wait days or weeks for their concerns to be addressed. One recommendation for outsourcing customer service is to promptly resolve customer issues. In the case of help desks, cases should be handled, and tickets closed as soon as possible.

The Customer Service Benchmark report

The Customer Service Benchmark report reveals that the average response time to handle a customer service request is 12 hours and 10 minutes, Really? 12 hours? In a world where businesses thrive on customer satisfaction, and clients demand a fast quick response customer support plays a significant role. Whether it's customer service, technical aid, or desk help, meeting the consumer's requirements is non-negotiable. Nevertheless, managing customer support operations is a demanding task, necessitating an expert team, top-tier technology, and continually updated resources. The solution? Outsourcing. Yet, it's crucial to evaluate its potential benefits and pitfalls.

This article will delve into the pluses and minuses of employing outsourced customer support services. The insights will help determine if outsourcing is the right choice for your business.

A Look at the Benefits of Outsourced Customer Support Services

First, let's clarify what business process outsourcing (BPO) entails. It involves allocating part of your business functions to an external service provider, enabling them to manage both front and back-office tasks.

Companies of diverse sizes often outsource customer support due to its direct impact on customer experience. This customer-facing role can be a significant determinant of your business's success. Below are the advantages associated with outsourcing customer support:

Substantial Reduction in Operating Costs: According to Deloitte's 2020 global outsourcing survey, 70% of companies sought BPO services to minimize operating costs. Outsourcing has proven to be an economical approach, offering immediate access to personnel and resources, and saving costs in the long run.
24/7 Service Availability: Customers expect round-the-clock service, and most BPO providers offer this. They operate all day, every day, with representatives on rotational shifts and non-business hours coverage, ensuring continuous customer support.
Omnichannel Presence: Over 50% of retail businesses invest in omnichannel solutions. Lack of presence across multiple channels could result in a 30% loss in sales, while having more than three channels could boost order rates by 494%. Outsourcing is an excellent way to offer omnichannel customer support.
Provision of Multilingual Services: The BPO industry has made business interactions across geographical boundaries possible. One advantage of outsourcing is providing multilingual support. BPO enables retail and e-commerce businesses to cater to international consumers. If global reach is your goal, multilingual support is crucial.
Swift Response Time: Promptness in resolving customer issues is critical. Outsourcing to established BPO firms can help improve your response time, given their emphasis on efficiency and quick resolutions.
Access to a Skilled Workforce: Around 73% of business leaders noted a direct correlation between customer service and business performance. Outsourcing allows access to a global pool of well-trained, knowledgeable, and competent representatives – a critical component for customer support.
Simplified Management: Managing a large customer support team can be arduous. Outsourcing this service to a reputable BPO company with a robust team simplifies the process.
Access to Latest Technology and Resources: BPO firms provide access to cutting-edge technology, equipment, and resources. This includes the latest digital enablers such as cloud computing, automation, and AI, helping scale your customer support operation.
Improved Business Performance: With 67% of customers having high standards and 86% willing to pay more for better customer service, outsourcing could significantly enhance your business performance. It contributes to increased efficiency, improved quality of service, and better customer experience.
Ability to Concentrate on Core Business Activities: 65% of companies outsource to focus on their core functions. Entrusting customer support to an external provider allows you to concentrate on your primary operations, leading to business growth.
Business Expansion: Outsourcing is a strategic move for growth and success. Companies, big and small, aiming to expand their operations benefit significantly from outsourcing customer support.

The Downside of Outsourcing Customer Support Services

As with every business decision, outsourcing comes with its downsides:

Misalignment of Business Goals: Outsourcing might result in a disparity in business objectives between your company and the BPO provider.
Misunderstanding of Brand Identity: If the BPO provider does not thoroughly understand your brand's identity, it can affect the quality of customer support.
Lack of Customer Focus: Some BPO companies might not prioritize customer support, leading to a decline in the quality of service.
Cultural and Communication Differences: Offshoring can sometimes lead to misunderstandings or miscommunications due to cultural differences.
Security Risks: Outsourcing involves entrusting your business data to a third party. This move can pose a security risk if the BPO provider does not have adequate data protection measures.
Limited Control and Flexibility: Outsourcing customer support might result in limited control over your customer service team. The operational flexibility that comes with an in-house team may not be achievable with a BPO provider.

conclusion

In conclusion, outsourcing customer support services has its pros and cons. Evaluating these can help you decide if it's the best solution for your business needs. Understanding the capabilities and limitations of your potential BPO providers is crucial to making a sound decision.

Should you find yourself uncertain about outsourcing even after perusing this article, or if you have any queries about the specifics of how to delegate parts of your business, don't hesitate to connect with us. To discuss how Atento can assist in reducing your operational costs with our custom-fit solutions, simply arrange a call through this link. I'd be more than happy to extend an invitation and elucidate further on how we can be of service to your business.