What does outsourcing cost? All customer service outsourcing costs insightful!

How does outsourcing work?

With outsourcing, you put all or part of a business process outside the door. So when outsourcing customer service, you bring the handling of customer contacts to an external company. That external company then takes care of customer service. This, of course, requires proper coordination. Many of the customer contacts involve processes that run elsewhere in the company. Think of invoicing, administration, deliveries, breakdowns, etc. Customer service is a spider in the web in this respect because customers contact the company about all these things. An external partner often has a lot of experience with customer contact and does nothing else. They are therefore often effective, efficient and professional in handling customer contacts. A more extensive blog about how to outsource works read here.

What determines customer service outsourcing costs?

Outsourcing customer service can be done in different ways. Depending on the situation, there are different forms of outsourcing, each of which also involves a different cost structure. The most appropriate form and therefore its costs depend on, for example:

• Numbers: How many customer contacts are handled partly determines in what form that is best outsourced.
• Complexity: Outsourcing simple customer contacts works differently than more complex support.
• Languages: Multiple languages is different from only 1 language
• Opening hours: during office hours or also evenings and weekends?
• Channels: it makes a difference whether you outsource only telephony or email or a combination of different channels such as telephony, email, chat, whatsapp, socials, review platforms etc.
• Peaks and seasons: Busy periods followed by quiet periods creates different outsourcing.

Customer service outsourcing costs then depend largely on the form of support chosen. Thereby we know roughly 3 forms:

1. Dedicated support: A form of support where customer service is outsourced and the external partner's employee works only for 1 client for a pre-agreed time. Thus, with dedicated support, the work is not blended/mixed with other clients. Therefore, this type of support is often charged by the hour. Dedicated support is often used when there is a certain volume that ensures that customer service employees always have enough work. So a certain volume is needed to make this form interesting. This can be because there are simply more than enough customer contacts coming in to keep a permanent group of employees working constantly. It can also be done by combining activities. Think, for example, of dealing with e-mails when it is quiet on the telephone. Back office work when there are fewer customer contacts. Or even translation work when multilingual customer service support is involved.
2. Blended/ Non-dedicated support: In this type of support, the customer service representative from the outside agency works for different clients interchangeably. We always make sure not to blend more than 3 to 5 different clients. Then it is impossible for the customer service representative to provide good customer service. Customer service outsourcing costs for this type of support are therefore not per hour but per unit. For example, this could be per interaction or per minute. This form of support lends itself well to lower volumes.
3. Hybrid support: A combination between dedicated and blended support. Here, for example, at busier times dedicated support is provided at less busy times a blended form. For example, it can be dedicated during the day and blended in the evening and weekends. It can also be dedicated in high season and blended in low season.

Thus, the form chosen largely determines customer service outsourcing costs/

So what exactly are customer service outsourcing costs?

Of course, this varies from situation to situation and company to company. One company charges all kinds of additional fees and at another you get an all-in rate. Of course, we have no insight into the costs that all contact centers charge. Broadly speaking, you should consider the following costs:

Start-up costs: one-time Euro 0 - 10,000

Strongly dependent on the complexity of the startup. Do many systems need to be linked? Does it require other investments to set up support? We usually charge no start-up costs. Starting a project requires an investment of especially time. Provided that there are no very special and time-consuming wishes and requirements regarding the support.

Subscription, management fees: monthly: Euro 175 -?

This varies greatly by organization. It is often a fee for managing the project. Things like intake, rostering, quality monitoring, etc. are reimbursed with this. We often keep these costs as low as possible because part of these costs are included in the normal usage fee.

Training cost: per agent per hour: Euro 28 - 40

Staff must be trained. For simple support, this can be done in a few hours. More complex support may require a few days or even weeks of training before customer service agents can do their jobs independently.

Dedicated support: per agent per hour: Euro 30 - 75

These costs depend heavily on things like level of education, complexity, multilingualism and opening hours. 24/7 multilingual support is simply more expensive than 1 language during office hours.

Blended/ non-dedicated support: per minute Euro 0.75 - Euro 2.00

Here the same factors as dedicated support apply as determining the exact rate

Blended/ non-dedicated support: per interaction Euro 1.75 - Euro 7.00

In addition to the same factors as dedicated support, the average handling time is the determining factor here. The longer the customer contacts the higher the rate.

Other costs: ?

There can be a fair amount of extra costs incurred by outside companies. You may have to pay extra for a phone number, call forwarding, extra work or other things. If you are not careful and do not have a good view on these costs in advance, it can sometimes be disappointing. We do not charge extra costs that have not been clearly agreed in advance.

Are Customer Service Outsourcing costs lower than taking care of customer service yourself?

In general, we can say that outsourcing is cheaper. That is, if you look at the total and if you have found the right partner. The difference is that with outsourcing, the total cost is transparent. With internal customer service, this is not the case. There, there is often no clear view of the direct and indirect costs of customer service. Direct costs as in personnel. But also indirect costs spread throughout the organization are partly necessary for customer service. Think of workplaces, buildings, recruitment, ICT, depreciation, etc. etc. People tend not to include those costs in a comparison with outsourcing.

The economies of scale of an external customer service department and thus the additional capabilities and greater degree of flexibility make outsourcing significantly cheaper on balance.