It’s always been difficult to seek out new customers and convince them to become loyal to your brand, which is why companies do their best to keep their current customers. And they have good reason: Studies show that 93% of customers are more likely to make multiple purchases with companies who provide excellent customer service. Increasingly, organizations are reaching out to high-quality professionals to provide this type of service to their customers, and outsourcing your customer service is something you should consider, too.
There are benefits to outsourcing customer service that are not related to cost, which this article will cover, but the main outsourcing trend right now is directly related to reducing costs. According to a Deloitte global outsourcing survey, there is a “sharp increase in the number of organizations giving priority to cost reduction,” and the current thinking is that this trend will not subside anytime soon. And how are they achieving these cost reductions? They’re outsourcing.
Roughly 70% of companies say they’re outsourcing to save money. How much money? Around 62% of companies say they are seeing overhead savings between 10% and 25%, but around 38% say they’re reducing costs by up to 40%.
Crunching the Numbers on Salaries
There is a commonly held belief that taking the in-house approach to nearly everything offers more control, including cost control. But when you consider the costs related to finding the right candidates, and then training and equipping them with the latest telecommunications technology necessary to run a high-functioning contact center, you’re looking at incredibly high overhead.
Crunching some numbers on salaries alone for a snapshot of the situation can be enlightening:
- Average customer service salary in the U.S.: $36,000 to $50,000
- Average customer service manager salary in the U.S.: $95,000
The number of customer service professionals and corresponding managers can vary widely from one company to the next, but when you multiply those salaries by the number of agents and managers your company needs to adequately provide service to your customers, you quickly see how the expenses can add up.
The cost explains why around 22% of companies in the outsourcing industry are involved in customer service, putting this industry in the top five of outsourced industries.
There is plenty of evidence supporting outsourcing, as wages in developed Western countries far exceed those at nearshore contact centers. While going to offshore providers seems attractive, as the livable wages in these developing countries can be 70% to 90% lower than in Western countries, the service may not meet your standards. For more consistent quality, nearshore contact centers are the best option because you can still see a cost reduction of up to 60%.
What Happens When You Outsource?
You don’t lose control of quality when you outsource your customer service to a nearshore provider – you only enhance it. Your outsourced provider handles all the hiring, training, infrastructure and management of the fluctuating needs according to call volume and specialized services, such as product launches, rebranding, etc.
Outsourced customer service companies take the time to get to know your company culture and will even invite you to be part of the training. These skilled professionals will ensure they have the information they need to handle your customers with the best care possible.
You offload all your responsibilities in regard to staffing, training and providing the real estate necessary for an in-house customer service department. This saves you money and gives you the time to focus on what you do best, which is run your company – not a customer service department.
So, not only do you gain greater scalability and access to 24/7 customer support, but you also stand a chance to reduce overhead costs by 30% to 60%.
Which Industries Outsource?
Customer care outsourcing is not limited to one industry. Consumers today, regardless of which industry they’re doing business with, are not willing to support brands that treat them poorly, so there is an opportunity for all businesses, small and large, to benefit from outsourcing.
- Tech Companies
From hardware to software to cloud services, the tech industry is highly reliant on the services they get from outsourced customer care teams that can provide prompt service on highly technical issues. - Healthcare
From scheduling appointments to managing claims to providing patients with answers in a discreet and secure fashion, healthcare providers seek out specialized care through outsourced professionals. - E-Commerce
In an industry that thrives in a 24/7 economy, customer care must be available on demand. No matter the time of day, consumers throughout the world need assistance and outsourced customer service provides it. - Retail
From brick-and-mortar to e-commerce retail, getting an informed individual on the line about a potential purchase is critical in moving consumers through the buy cycle. Highly educated contact center reps provide that. - Financial Services
Investment firms, banks and credit unions have customers/investors who make frequent inquiries related to their investments, balances and transactions. This information needs to be accessible at all times.
While cost savings are a top attraction to outsourcing, there are many more perks. Following the lead of the consumer is always a good practice, and today the majority of consumers have higher expectations for customer service than they did a few years ago. That means companies that are simply following the status quo are falling behind, and it’s also why an estimated 80% of companies plan on putting higher investments toward improving the customer experience. There is also a competitive edge to be gained here, too, because not only are organizations fighting to provide better products/services, but they’re also fighting to offer enhanced customer experiences.
The Consequences of Bad Service
Did you know that 73% of consumers will switch to a competitor after bad customer experiences? Some survey results go further, including this Oracle study that says 89% of new customers said they began doing business with a new company because of a bad experience with a former company. They might have been more forgiving in the past, but they’re not willing to let a bad experience go unpunished anymore.
Consumers are done with being treated like a number, but you can be sure that not living up to their expectations can be impactful, because around 75% of consumers say that having a company treat them poorly can spoil their entire day. While some will mark it up to a minor annoyance, about 50% of consumers say dealing with a bad customer service rep leaves them feeling “stressed and exhausted.”
And here’s a stat that should strike fear in every company leader’s heart: 50% of consumers say that after a single bad customer service experience, they are willing to completely drop that brand and seek out better service elsewhere. And they probably won’t even give you a chance to make it up to them, because it’s estimated that 91% of unhappy customers split without complaining.
Consumers seek out value in everything they do, and they find value in a positive customer experience. According to Salesforce, 67% of consumers say they’ll pay more for a great customer experience. And on that note, TA Digital says that customers who had a great customer experience are three times more likely to make a repeat purchase and five times more likely to recommend the company to their friends and relatives.
Benefits of Outsourcing to Nearshore Centers
The U.S. is experiencing labor shortages that hamper the customer service industry. That’s not the case with nearshore contact centers where the workforce well runs deep. In countries like Belize, where the official language is English and the vast majority of the populace is bilingual, the employees are eager to work and perform well in the customer service industry. Furthermore, Belizeans are highly in tune with American culture, so there is no bridge to gap in terms of culture. This means they can easily relate to consumers and provide meaningful experiences.
There are time zone similarities to consider with nearshore contact centers, too. For example, Belize is on central standard time. This shared time zone can streamline workflow compared to offshore facilities where the difference can be 12 hours. There is also the benefit of being able to communicate with nearshore contact center teams so that issues can be addressed during the same work shift.
Partner with Protel BPO
At Protel BPO, we know how important it is for companies to reduce costs, and that’s something we can offer. But our value proposition has always been about the we treat our clients’ customers. Our knowledgeable staff isn’t just highly educated, they’re also handpicked for their abilities to communicate, which means they provide the information required, but in a friendly, warm manner that customers appreciate.
Whether you’re looking to cut back on costs, improve the customer experience or both – contact us and let’s discuss your customers’ unique needs and how we can cater to them.