Outsourcing globally the norm! 62% outsources!

So who outsource their customer service?

With an outsourcing rate of 62% worldwide, it won't surprise you that very large international companies choose this model. Companies like Amazon, Apple, Microsoft and Zalando have all chosen to outsource their customer service. They hire external companies to set up their customer service and handle customer queries. This of course involves thousands of employees and many millions of contact moments for such companies. Yet outsourcing customer service is not only interesting for multinationals. The majority of companies use it. Therefore, whether customer service outsourcing is interesting does not depend on size but on factors such as internal expertise, (labour) market conditions and costs. In the US, 37% of SMEs outsourced customer service in 2019. This was revealed in research by Clutch. It also noted that satisfaction with customer service performance is significantly higher among companies that do outsource.

Customer service strategies

The most common strategies regarding customer service outsourcing are 3:

1. Fully in-house. This strategy has no outsourcing. Companies choose to set up their own customer service department to handle customer queries centrally. This strategy is often chosen based on the idea that external parties would not be able to meet the same quality standards. For many organisations that handle their own customer service, the idea is that there is a certain degree of downside risk in (partially) outsourcing customer service.

2. Hybrid in-house and outsourced. A strategy that is common (probably most common) where part of customer service is outsourced. This can take many forms such as:

• • Outsourcing at certain times where an external company is used outside opening hours, for example. For example, wider opening hours can be offered for customer service than for the rest of the company. Offices might close at 17:00 while customer service is available until 21:00.
  • Outsourcing certain tasks or channels. This involves outsourcing parts of customer service to an external agency. For example, only telephony while e-mails are handled internally. Another form is first-line outsourcing where most customer queries are handled by an external party and the more complex issues are dealt with internally.
  • That is, customer service is handled primarily but an external agency is ready for when it is too busy. This makes the external partner a kind of safety net where customers are dealt with when the in-house contact centre is too busy.
  • International companies do not always have the ability to provide customer service in other languages as well. In doing so, they choose to keep their own language in-house and outsource other languages, for example. 

3. Full outsourcing. This strategy involves choosing to outsource all customer service. Often chosen by companies that do not have the expertise, time, inclination or facilities to organise customer service as they would like to internally. Companies that fully outsource thereby choose a partner who can fulfil their ambitions with regard to customer service.

Challenges

The US study further shows that SMEs' biggest customer service challenges can be divided into 3 categories:

1. Answering customer queries quickly. This is also a common irritation of customers: waiting times at customer services.
2. Sufficiently qualified staff. Applies to almost all sectors but seems to be a big problem in customer service
3. Providing very good customer service without having to pay attention to costs is something anyone can do. Unfortunately, that is not the practice anywhere.

Closing

Outsourcing (partially) customer service is the norm worldwide and results in higher satisfaction with that customer service. In doing so, it offers a solution to a number of problems SMEs face. Outsourcing has a number of benefits but also pitfalls.