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Pros and Cons of Outsourcing Customer Service

How will outsourcing benefit you if you own a business with operations that involves considerable customer engagement?

Image by Lorenzo Cafaro from Pixabay

What are the advantages of outsourcing customer services? How will outsourcing benefit you if you own a business with operations that involves considerable customer engagement?

Customer service is one of the top 5 most outsourced business operations according to a 2017 survey by Statista. Around 84% of businesses who outsourced operations to vendors are based in the US in that same year.

This is significant considering that estimates place the revenue of the outsourcing industry at $66.5 billion in 2019. Experts predict that the outsourcing industry will hit the $99 billion mark in four years with customer service operations being a huge part of it.

Advantages of Outsourcing Customer Service

One of the primary reasons why businesses outsource to offshore vendors is to cut costs. Setting up a customer service department, acquiring additional office space, training personnel, setting up the network infrastructure, and maintaining equipment requires a significant investment. Outsourcing your customer operations will not only spare you from these worries, but you can also save time as most of the equipment, infrastructure, and personnel already in place.

Outsourcing this labor-intensive segment of your business will allow you to refocus your resources and core workforce on more critical aspects of your business processes. This can lead to better product quality and innovation.

Disadvantages of Outsourcing Customer Service

Traditional offshoring practices mostly involve acquiring the services from vendors who are located in countries where labor costs and taxes are low. While this is a plus in terms of cost-effectiveness, it also gives rise to several issues. The cultural differences and language barriers sometimes pose problems and may even have a negative impact on your business.

Since you outsourced to a vendor who is located, perhaps in a different hemisphere, the cost of visiting the facility for face-to-face meetings will be high. Language and cultural differences, coupled with the impracticality of regular on-site team supervision may result in poor output quality.

Outsourcing Onshore to Your Clients

One clever way to deal with the drawbacks of traditional outsourcing of customer service is to outsource onshore. The availability of ultra-fast internet connections and VOIP technology will even allow you to hire your customers as freelance reps.

In most cases, your customers will be happy to have the opportunity to earn extra from the product or service that they are already enjoying. Here are other advantages of onshore outsourcing and using your customers as freelance customer service representatives.

  • Your customers are already familiar with your product or services.

  • You are more likely to have a high-quality output.

  • There will be no language barriers or anything getting lost in translation.

  • There’s not much networking infrastructure to set up.

  • You have minimal to no G&A expenses.


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