Do you want to outsource customer service to save cost? If YES, here is a complete guide on how to outsource customer service from USA and how much it cost.
Outsourcing customer service from the United States to another country can be defined as obtaining an external service provider located outside of the United States to operate and manage some or all customer service operations. This external service provider manages the hiring and training of customer service agents, maintaining customer service software and infrastructure and taking care of the day to day customer service operations.
Businesses in the United States can outsource a segment of their customer service operations or outsource the entire segment.
Table of Content
Why Outsource your Customer Service?
Once the decision has been made to outsource the customer service operations and the contracts are signed, many companies take a hands-off approach to overseeing operations and trust that their service provider will take the reins. A combination of several factors can help decide if outsourcing your company’s customer service will be a smart move. These considerations include:
Outsourcing your company’s customer service may seem like the best option as it saves you money, but you can’t guarantee that it will keep being the best option for the success of your business in the long run. If your company regularly takes customer calls on technical or complicated issues, you may be better off keeping customer service in-house to make sure your customers are getting correct, helpful answers to their questions.
It all depends on the amount of customer service your business handles, it may or may not be profitable to hire an outside company to do it for you. Its very advisable that you calculate the cost of creating your own customer service department and compare it with the cost of outsourcing. You need to consider all factors such as employee compensation and training, equipment and supply purchases, construction or rent costs, and maintenance.
- Customer Needs
You need to consider your customers and the service you provide to them when planning to outsource customer service. For instance, if your customers want service you can’t provide with current resources, it’s a sign that outsourcing customer service may be right for you. Do your customers need assistance at times when your staff is not available?
Do customers need service at a volume your current staff cannot provide? With outsourcing, you can get the amount of service that fits your company best at the times you need it. A lot of agencies offer 24/7 support, which may be too costly for some businesses to provide in-house. Your customers are the bedrock of your business, and when it comes to customer service you should definitely consider them.
One more factor to consider is how customer service outsourcing will affect your day-to-day operations. Unless customers are calling with detailed questions that require expert answers, your time or that of your employees may be better spent on other projects that lie within their talents.
Sales or research and development of new products, for example, can be better investments of your employees’ time in the long run. So while you should attentively examine the costs of outsourcing, don’t forget to include the benefits in your decision.
How to Outsource Customer Service from USA and How Much It Cost
If outsourcing your customer service operations to an overseas provider seems enticing, but not worth the risk, you can consider a simpler, more cost effective solution. Hiring a team of global customer service agents who work remotely can be a “best of both worlds solution”.
It can allow you to leverage some of the advantages that make outsourcing customer service agents so luring and also mitigate the disadvantages associated with outsourcing. But if you still feel after much research and analysis that outsourcing is the best option for your business, then here is how to Outsource customer service from the United States.
1. Analyse the scope of your customer service needs
Most times, customer service does not need an agent sitting face-to-face with customers. If this is the case with your business, it may be more cost-effective to outsource your customer service to a dedicated “call centre.” Note that these call centres focus on dealing with telephone and online interactions with customers and, with proper oversight, can drastically cut the operational costs or improve the quality of your customer service department.
But if your business needs occasional or frequent face-to-face customer service interactions, outsourcing your customer service functions may not be an option.
2. Make sure outsourcing is cost-effective
Outsourcing customer services to developing nations, such as India or China, may not help your business reduce overall operating costs. This is why before you enter into any contractual agreement, make sure U.S.-based companies do not offer similar services for similar costs. You also have to make sure your outsourced call centre can keep up with the same quality that you currently have in your customer service department.
3. Assess your customer base
When considering outsourcing your customer services to a third-party outside of the United States, you must consider your customers. A lot of businesses in the United States choose not to offshore their customer service functions for fear that their customer base may see them as anti-American or unpatriotic.
So, before you enter into an arrangement with any third-party contractor outside the U.S., make sure your company will not suffer from a backlash as a result of this business arrangement. Also note that your customers might see your business as “unresponsive” if they always have to deal with representatives from a distant country.
You have to make sure outsourcing will help you reach your goals. Outsourcing your customer service functions for cost can only be beneficial if the fee paid for outsourcing those services is less than maintaining a customer service department in-house. In the same way, outsourcing your customer service to improve customer satisfaction is only effective if the third-party service can provide better service than you can in-house.
4. Research and Verify the Call centre
You need to understand how important it is to make sure that the third party customer service vendor can protect your company’s assets and avoid the loss or theft of company data. Its advisable that you research and contact businesses in the U.S. that have used the offshore, third-party business.
Note that speaking with these U.S.-based companies can give you a clearer understanding of how the offshore, third-party business responds to customer service needs. Its also crucial that you understand the labour laws and regulations of the country in which the third-party business operates. Have it mind that you have to verify if the said third-party vendor abides by the same regulations and laws.
5. Create functional communication with the call centre
It is very important to the operation of your business that the management of your company is aware of the scope and nature of customer-business interactions. You need to make sure that effective lines of communication are established with the call centre so that you are aware of why customers are calling, what they need help with, and whether or not their needs/concerns are being addressed by the call centre representatives.
6. Follow up and Monitor results
Immediately you must have had a contract agreement with a third-party customer service company, make sure a person or entity within your business actively oversees the progress and results of outsourced customer service operations.
You need to create good governance. Governance is an agreed upon set of roles, rights and accountability, principles, procedures, and escalation processes that guide decision making, issue resolution, and changes in the outsourcing arrangement
Its advisable that you ensure that all of these factors are clearly defined within contractual agreements. It is also important to make sure that both the business and the third-party contractor have set-up mechanisms that can ensure the contractual obligations and agreements are being met throughout the business relationship.
7. Arrange to handle customer services “in-house”
Even though having a suitable exit plan is very important to managing any outsourced business relationship, it is also very important to prepare for ending a contract with a customer service call centre. You need to ensure that you have in-house employees at your business who can handle the volume of customer service calls if and when you decide to end your outsourced relationship.
This will ensure that your business does not suffer from a lapse in customer services if you need to end the outsourced relationship. Indeed there may come a time when the cost of working with a third-party contractor outweighs the benefits of doing business with that contractor.
Poor performance, lacking volume, and bad customer reviews are all reasons to reconsider the existing business relationship. Make sure that the initial contract you make with a third-party contractor allows you to terminate said contract with minimal expense and liability if and when it is deemed necessary by you.
How Much Will It Cost to Outsource Customer Service from the United States
It’s very important to state that call centre pricing might be the single most crucial factor in the whole outsourcing process. There are many variables involved in outsourcing costs including: skill levels, type of work, location, and duration of the application. Here are some general guidelines to call centre prices in the United States:
Inbound call centre services are usually priced in three main ways:
- Shared inbound – this is seen as services in which a pool of agents answer calls for 1-3 dozen clients. The client then pays only for the time used on a per minute basis. These rates range from $.35-$.45/minute at low cost international agencies to $.75-$.90/minute in the US/Canada. Shared Services are ideal for applications with wild volume swings or low overall activity.
- Dedicated – This type of service is made up of dedicated groups of agents that take care of calls exclusively for one client. This service is most times priced on per hour basis. These rates range from $8-$15 internationally to $22-$28 in the US/Canada for “normal” agents. Dedicated Services are ideal for complicated applications or when volume is significant and predictable.
- Monthly – This type of call centre pricing is basically a subset of “dedicated inbound services”…simply compiled into a monthly rate instead of an hourly rate. A lot of low cost international call centres offer this type of pricing. However, it is rare to find it in North America or Europe.
Outbound call centre services are typically priced as follows:
- Hourly – This is the “normal” call centre price structure for outbound sales, lead generation and appointment setting. Generally, rates differ based on the location of the agency. Smaller agencies in India or The Philippines normally charge from $6-$10 per hour.
Furthermore, call centres in Eastern Europe or Latin America normally feature rates from $9-$14/hour. Finally, call centres in mature western countries (like the US, UK, Germany & Canada) typically charge $22-$32. Very specialized, high level agencies in these countries can occasionally be hired for $35-$50 per hour.
- Commission – while on certain sales or lead generation applications, a full commission structure favours both parties involved. The amount of commission is completely dependent on the situation. But the amount earned per hour by the call centre should provide at least a 10% to 20% premium over their normal hourly rates to account for the additional risk to the call centre.
- Hourly + Commission – Just like you pay an internal salesperson in this manner, a combination structure provides that both parties have “skin in the game” and often works quite well to maximize performance.
The single largest outsourcing cost variable is location; therefore choosing a call centre located in the US or Europe versus India or Latin America will have a huge impact on costs. Here is a general guideline to outsourcing costs by geographic location:
- United States/Canada: $22 – $35 per hour
- Western Europe: $40+ per hour
- Eastern Europe $12 – $25 per hour
- Australia: $35 – $55 per hour
- Africa/Middle East: $15 – $20 per hour
- Latin America: $8 – $18 per hour
- Asia/Philippines: $8 – $14 per hour
- India: $5 – $9 per hour
- Pakistan: $6-$10 per hour
4 Methods of Customer Service Outsourcing
If after much research and consideration that you think outsourcing is right for you, you have to explore your options. Here’s a quick rundown of the major ways companies do it.
- Freelance sites
If your business really needs outsourcing but doesn’t need very much manpower, working with freelance customer service representatives may work for you. Websites such as Elance and Upwork (formerly oDesk) match businesses with contractors. You will need to post a description of the work you need done and review applicants’ resumes as they come in, or browse a search-able database of potential freelancers.
Note that these three sites also offer you the means of tracking and managing workers’ time, offering money-back guarantees in the event an employee doesn’t complete work according to quality standards and dispute resolution to assist with these situations. Best of all, all three of the sites are free for employers to use.
- Call centres
This is also a very good option, especially if you have a high volume of customer interaction. If you use this method, it’s very crucial that you choose the call centre carefully. Have it in mind that representatives might take care of hundreds of inbound or outbound calls a day from a variety of different companies, and employee turnover rates can also be an issue.
- Social media
A lot of businesses in the United States are handling customer service issues and concerns on Twitter or Facebook. Most times, a customer’s question can be resolved with just a quick response, making Twitter’s 140-character messages a perfect way to communicate.
Note that this gives customers the opportunity to leave a message and get a response quickly without having to wait on hold. A lot of businesses even take a proactive approach, searching for their company name to find complaints they can clear up. Since there are a number of social media-specific outsourcing professionals, this can almost always be handled by a third party.
In this age, email support is generally a safe outsourcing bet. A lot of customers won’t expect an instant turnaround, and 24 hours is the current industry standard. But note that this window gives representatives a lot of time to research any needed issues and respond to customers’ questions.
Also note that this form of customer service also completely removes one of the most common consumer complaints about outsourced customer service – difficulty understanding the representative or being understood.
What to Look for in a Third-party Customer service representative
When considering to outsource your company’s customer service to a particular vendor, it is advisable that you research some of the vendor’s clients and do a test call as a customer asking a question. This exercise will give you a real-world look at how your customer’s calls will be handled, and can give you an insight on whether or not you want to engage the company to handle your customer service.
Also doing an online search for blogs or forum posts that mention the centre’s clients may bring up consumer reviews that can give you further insight into a typical customer service experience.
You also need to consider things like language barriers, because it will be very bad for both your customers and the representative when language barriers prevent clear, effective communication. This is the more reason you have to outsource customer service to a representative who understands your customers needs and your business visions.
Another means of maximizing your company’s level of customer service when outsourcing is to find vendors that provide incentives to customer service representatives. Note that a lot of call centres provide tiered bonuses that gives representatives the opportunity to earn more money per hour, or a bonus, when they exceed goal expectations.
Any fun, competitive contest can help revitalize a customer service floor and encourage them to meet metrics. It’s important to state that most companies set up a system that records some or all calls. The calls can then be reviewed on a regular basis. Monitoring calls allows you to give representatives feedback on their service. If the system records all calls, they can also be accessed to help with taking care of growing customer service issues or for legal reasons.
If you’ve decided to outsource your business customer service functions to vendors, you have to pay maximum attention to the contract. Don’t be afraid to suggest changes or additions you need. Aside from detailing how the business agreement will work and what is expected, the contract should include conditions that allow you to discontinue the relationship.
This may consist of a set of concrete quality standards, or may just be a time period after which the contract is up for renewal. Its advisable that you take your time to read service level agreements, and consider whether they apply to your business needs.
A lot of call centres tend to focus on handle time – that is, the average amount of time the representative spends with each caller. They work to reduce handle time to a few minutes per customer, providing the most efficient service possible.
Agreeably, this is profitable because it allows representatives to field more callers during their shifts, but it also negatively impact the level of service each caller receives. A representative who feels rushed to meet a handle time metric may not explain something extensively or offer other services. This is why it may better for you to emphasize other metrics in your service level agreements.
You also need to have an attorney review any paperwork you don’t completely understand, since they can predict what you may need in the future. It is also very necessary that you create and maintain a connection between your current business and the new branch.
One effective way to do this is to have an internal staff member whose role is to facilitate communication. This staff member can keep both parties informed about what’s happening or assist with passing messages along. Having one person designated to maintain the link between companies will help prevent misunderstandings about expectations, training, performance and procedures as well.
Although the purpose of outsourcing a business function is to let you focus on other priorities, it’s still very important that you make sure they’re doing a good job. Keep tabs on the level of service your customers are receiving. Make periodic test calls to experience customer service first-hand.
Always review any available data or metrics to look for problem areas such as dropped calls, multiple calls to resolve the same issue, or other hitches in service. Have it at the back of your mind that your customers depend on you to provide them with excellent customer service, and outsourcing can be a way to do that as long as you put real research into the decision.
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