Customer service outsourcing: Pros and cons + guide

Customer expectations are rising daily, and organisations without iron-clad support systems may struggle to meet rising demand. In fact, according to the Zendesk Customer Experience Trends Report 2024, 80 percent of customers expect support representatives to assist them with everything they need. So, if you can’t guarantee a flawless customer experience (CX), you may need help.

Customer service outsourcing can be a business’ second in command to ensure it can provide outstanding customer service even with increased customer demand. In this guide, we detail what customer service outsourcing is, the pros and cons, and how you can bring it to your organisation without sacrificing support quality.

More in this guide:

• Types of customer service outsourcing
• Pros and cons of customer service outsourcing
• 7 essential steps for outsourcing customer service
• How to know if customer service outsourcing is right for your business
• Frequently asked questions
• Enhance your customer service with Zendesk

Types of customer service outsourcing

Businesses can use several different types of outsourcing to enhance their support. The first distinction deals with how many customer service agents you need:

• Individual agents: Businesses can hire individual agents to perform customer service freelance. This is best for teams that need a few more hands to meet seasonal or short-term fluctuations in demand.
• Customer service business processing outsourcer (BPO): BPOs are large-scale teams that can perform as call centres, contact centres, and help desks and assist with omnichannel customer service. This is the most common type of outsourcing that provides an end-to-end solution for teams that want to streamline their support.

From there, organisations can decide where they want their customer service outsourcing to come from:

• Onshore: Outsourcing tasks to a third-party customer service operation within the same country. This option can be more expensive, but the support agents are very familiar with the language and customs of the country.
• Nearshore: Outsourcing to teams in a nearby country, often within the same region or time zone. Nearshore teams are cheaper than onshore organisations and have few language barriers.
• Offshore: Outsourcing to organisations in different countries that may be far away. Offshore teams can have lower pricing, but they may struggle with language barriers and cultural norms.

With so many options available, organisations can select the right option to meet their unique business needs.

Pros and cons of customer service outsourcing

Customer service outsourcing is a reliable way to increase the scope and quality of your service. That said, it’s not all positive, and businesses should be aware of the pros and cons of this strategy.

Pros of outsourcing customer service

Some of the most important benefits of outsourcing customer service include:

• Cost savings: Outsourcing operations have their own teams, systems, and equipment. This allows companies to reduce overhead costs such as salaries, benefits, and infrastructure expenses like extra office space or hardware.
• Specialised expertise: Outsourcing companies are experts in the customer experience and can bring high-quality industry-specific knowledge to your business.
• Scalability: With outsourcing companies, you can easily meet your customer’s needs even during fluctuations in demand. This helps you deliver good customer service even as you grow.
• Fewer hiring responsibilities: Expanding a support team comes with interviews, onboarding, training, and more. Customer service outsourcers eliminate those headaches by giving you access to a full team of highly-trained support reps.

Cons of outsourcing customer service

Despite the benefits, there are some drawbacks to outsourcing customer service. Here are some important things to consider:

• Control issues: By outsourcing customer service, business owners may lose some control over how their brand is represented and how customer interactions are handled daily. This can result in service inconsistencies and difficulties in upholding brand integrity. However, customer service quality assurance software can monitor and review interactions to ensure that the expected standards are consistently met.
• Potential learning curve: While outsourcing companies are familiar with good customer service, they aren’t familiar with your business. It may take some time for the outsourcer to learn the ins and outs of your brand.
• Security concerns: Regulated industries like healthcare or finance involve daily interactions with confidential customer information. A third-party company may not be reliable when protecting sensitive data.
• Lack of passion: Customer service outsourcers may have multiple clients at once, or they may experience high rates of attrition, meaning they may not have the same passion for delivering fantastic service as your in-house team.

7 essential steps for outsourcing customer service

If you’ve decided that customer service outsourcing is right for you, the next step is learning how to choose an outsourcer and ensure they are performing well for your business. Here are some crucial steps and customer service tips as you move through the selection process.

1. Define your end goals

Before you dive into the world of customer service outsourcing, define your goals. Determine what you want to achieve with outsourcing and how you will measure success with a third-party provider. You could start by reviewing your customer service objectives to see if you are on track to hit your targets or if you anticipate falling short.

For example, if you’re experiencing a high churn rate, a major goal of your outsourcing partnership could be to build customer loyalty. Determining your goals from the start can help you select a partner and ensure you are making measurable progress together.

2. Select the right partner

After determining that your business would benefit from customer service outsourcing, the next step is to select the right partner. But it’s not as simple as Googling a few businesses and selecting the company that looks the flashiest—you should ask yourself customer service outsourcing questions to determine the best option, like:

• What business model is right for you? Decide if you only need a handful of agents or a full-scale BPO. Also, determine if you want an onshore, nearshore, or offshore model.
• What communication channels do you use? Ensure your outsourcer can communicate with your customers on your preferred support channels and integrations like chat or messaging.
• How valuable are knowledgeable agents to you? Select a highly-rated outsourcing provider with a track record of excellent customer service.
• Are communication skills and cultural fit important for you? Nearshore and offshore outsourcers can be excellent options, but ensure the company has successfully supported your country.

Above all, evaluate outsourcers through the scope of your goals to select the right option for your needs.

3. Provide comprehensive training

When outsourcing customer service, the external team must know your products, services, and values. Have them work closely with your team and provide comprehensive training to help them deliver a seamless CX. You can do this by reviewing company values, highlighting your customer personas, providing them with a knowledge base, and other similar actions to help them learn your business.

You can also use artificial intelligence (AI) to help with this process. Tools like Agent Copilot can aid outsourced agents with AI-driven support. It can evaluate customer interactions and suggest relevant responses and actions based on the situation, which agents can then approve, modify, or execute. It can also change the tone of a reply, surface knowledge base articles, and even independently resolve routine tickets like order cancellations. This can help customer service outsourcers provide quality service for your business from day one.

4. Use QA tools to measure service quality

Quality assurance (QA) is a systematic approach businesses use to ensure services meet or exceed expectations. You can embrace QA principles to maintain quality control and ensure external support teams are providing a consistent experience to your customers. This can help to maintain a positive customer experience and build customer loyalty.

For example, with tools like Zendesk QA, you can use AI to evaluate 100 percent of your customer conversations across your internal support teams and business process outsourcers. AI can pinpoint problematic interactions so you can measure your service quality and perform changes or organise training sessions if needed.

5. Have regular performance reviews

Conduct performance reviews with your outsourcing partner to ensure the service meets your expectations. Evaluate customer service key performance indicators (KPIs) like customer satisfaction (CSAT) and other metrics to address issues and set new goals. These meetings can help you and the third-party provider stay aligned throughout the relationship.

6. Pivot when needed

If those performance reviews don’t go as planned, don’t be afraid to pivot. Not every provider is right for every business, and it may take some time to find an outsourcer that gels well with your team and customers. That said, you may want to consider a different approach entirely. For example, solutions like Zendesk can help you do more with your current team rather than outsourcing help.

7. Focus on data security

Finally, ensure your outsourcing partner has an excellent track record of data security. Per our CX Trends Report, just over half of CX leaders have experienced a data breach or cyber attack in the past year, so you need to be smart about who you give data access to. Doing so can help keep your information safe while also building trust with your customers.

How to know if customer service outsourcing is right for your business

You could enlist the help of a customer service outsourcer at the perfect time, but it’s also possible you miss the signs that you need help—and lose a chunk of your customers in the process. Here are a few things to look for that might signal you need help:

• Long first reply times (FRT): FRT is the average time for a support agent to respond to customer enquiries. If your FRT is ballooning, it may be time to call in some backup.
• Low CSAT: Lower levels of customer satisfaction aren’t always tied to support agent headcount—for example, it may be related to how they speak to customers or how you process customer issues. That said, if your CSAT is dropping, you may need extra help.
• High employee turnover: Support agents don’t like to work in hectic environments where they are overwhelmed day after day. High turnover can indicate you have more work than your staff can handle.
• Difficulty scaling: As you grow, your customer service team’s responsibilities also grow. It may be time for a change if you cannot increase your customer base without sacrificing service quality.

These aren’t the only factors, and any KPI trending in the wrong direction could indicate that you need additional support.

Frequently asked questions

Enhance customer service outsourcing with Zendesk QA

Customer service outsourcing can act as your copilot to help you deliver an excellent CX quickly and effectively. That said, businesses shouldn’t blindly hand off responsibilities to a third-party service provider without monitoring progress. With Zendesk QA, you can put AI in charge of service quality to help you analyse 100 percent of customer interactions. This can give you valuable insights from which you can spotlight troubling interactions, view performance trends, uncover coaching opportunities, and more so you can ensure your customer service outsourcer is performing as effectively as possible.

Learn more about how Zendesk QA can help you monitor BPOs and beyond.