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

How does outsourcing work?

With outsourcing, you outsource all or part of a business process. With customer service outsourcing, you outsource (possibly partially) the handling of customer contacts to an external specialised company. That external company then takes care of customer service. This requires good coordination, of course. Many of the customer contacts involve processes that run elsewhere in the company. Think of invoicing, administration, deliveries, breakdowns, etc. In this, customer service is a spider in the web because customers get in touch about all these things. An external partner often has a lot of experience in customer contact and does nothing else. They are therefore often effective, efficient and professional in handling customer contacts. A more extensive blog on 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 entails 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 it is best to outsource.
• Complexity: Outsourcing simple customer contacts works differently from more complex support.
• Languages: Multiple languages is different from just one
• Opening hours: during office hours or also in the evenings and weekends?
• Channels: it makes a difference whether you outsource just 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. In doing so, 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. With dedicated support, the work is thus not blended/mixed with other clients. This form of support is therefore 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 may 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. For instance, handling e-mails when it is quiet on the phone. 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 form of support, the customer service representative from the external agency works for different clients interchangeably. We always ensure that we do not blend more than 3-5 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. This could be per interaction or per minute, for example. 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 offered at less busy times a blended form. This can, for instance, 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.

So the form chosen largely determines customer service outsourcing costs.

So what exactly or approximately are customer service outsourcing costs?

Of course, this varies from one situation and company to another. 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 charged by all contact centres. Broadly speaking, you should consider the following costs:

• Start-up costs: one-off Euro 0 - 10,000
  Strongly dependent on the complexity of the start-up. 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 time in particular. Provided there are no very special and time-consuming wishes and requirements regarding the support.
• Subscription, management fee: monthly: Euro 175 -?
  This varies greatly from one organisation to another. It is often a fee for managing the project. It covers things like intake, rostering, quality monitoring, etc. We often keep these costs as low as possible because part of these costs are included in the regular user fee.
• Training costs: per agent per hour: Euro 32 - 75
  Staff need to be trained. For simple support, this can be done in a few hours. More complex support may mean training for a few days or even weeks before customer service staff can do their job independently.
• Dedicated support: per agent per hour: Euro 32 - 75
  These costs strongly depend 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 for dedicated support apply as determining the exact rate
• Blended/ non-dedicated support: per interaction Euro 1.75 - Euro 7.00
  Besides the same factors as for 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 reasonable amount of extra costs incurred by external 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 idea of these costs in advance, you may be disappointed. We do not charge extra costs that have not been clearly agreed in advance.

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Is customer service outsourcing cheaper?

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 in-house 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 indirect costs spread across the organisation are also partly needed for customer service. Think of workplaces, buildings, recruitment, ICT, depreciation, etc. etc. People tend not to include those costs in a comparison with outsourcing.