At Ameridial, we’re regularly approached by companies considering outsourcing their customer care needs. We’re happy to share some insight into those we’ve produced over the last 30 years. In this ongoing piece we’ll explore the benefits of call center outsourcing most frequently realized (and in no particular order). Check back often for updates and additions!
Benefit #1 – Saving Money
There are many benefits of call center outsourcing but the first on our list is saving money. Typically, in a true dollar for dollar comparison, a BPO can offer savings versus in-sourcing costs. Furthermore, these savings can be realized while still having service provided in the USA.
A skeptic might say: “This can’t be true, doesn’t a 3rd party need to build in a profit margin to stay in business?” The answer is yes, of course. However, even with a small profit margin built into pricing, savings are often realized by outsourcing. That’s why outsourcing customer care support continues to be the right decision for so many organizations.
When conducting a cost comparison of outsourcing vs. in-sourcing, you must first recognize that your true costs are NOT just the hourly wage of the customer support representatives you employ. This is a common misperception and a significant one at that.
To begin with, the hourly wage of your representatives is taxed, most companies provide benefits such as insurance, you have to account for worker’s compensation plus paid vacation time and holidays all add to your labor costs.
Beyond these additional fees, there are many more just related to personnel. One must consider HR expenses to hire, train and develop this staff. Next you must consider turnover and the cost of replacing these same individuals (vs. outsourcing where attrition costs are not typically passed through to the client). There are additional costs associated with personnel who manage your staff as well, such as trainers, supervisors, IT staff and quality control personnel. Additionally, since most contact centers setup operations in cities offering quality personnel at advantageous rates, the wages for most personnel are typically lower to begin with.
Beyond your labor costs, there is still so much more to consider. Your representatives need workstations, phones, computers, licenses, and more. Technology costs are also significant. And, of course, there are operating costs associated with the building you provide such services within.
At Ameridial we have a firm grasp on what the true operating costs are of running a high quality support team. We’ve developed a tool that will allow you to fairly compare your internal costs to those of outsourcing, taking all major variables into consideration. We’ll be happy to share this with you upon request. Please feel free to Contact Us to learn more.
Benefit #2 – Elasticity
Managing the customer service function for most every business proves challenging at times but never more-so than during those periods when additional staff is needed.
Scaling your workforce up, and down, is time consuming, typically stressful and often quite expensive. When staff elasticity is sourced internally it’s even worse. And the effects are far reaching; personnel in departments such as human resources, training, quality assurance, IT, operations and even the executive team will all be affected by the need to add representatives to their team. Considering this also typically occurs during the most important time of the year (e.g. the holiday season for e/retail brands) having added stress when knowing the next two months will make or break the P&L statement for the entire year isn’t welcomed. Contact centers prove to be vital partners during these times.
Contact centers can typically off-set the extreme peaks and valleys of their collective clients, a luxury not afforded to an internal operation without other clients. Call centers deliberately seek business from companies with alternate peak cycles for this very reason.
Thanks to servicing a diverse customer base, representatives at contact centers can be trained on different accounts as workflow dictates throughout the year. So not only do you have an easier time sourcing the additional staff you need with a call center partner, you’re tapping into a tenured team as well.
Many companies with internal customer service operations simply hire temps to get them through their peaks and then release them when volume drops. This approach results in an inferior experience for your customers. When you compare the tenured staff a call center can offer with temporary personnel, the tenured staff prevails without exception. Additionally, utilizing temporary resources often disrupts the culture of the resident internal staff too.
Depending on the size of your cyclical needs (we service some brands that experience 3x-5x their average monthly volume during peaks) insourcing additional staff isn’t even sufficient to accommodate the surge. Most internal customer service departments are found within one building and access only one labor pool. This is just another one of the benefits of call center outsourcing with a partner that has multiple sites; they simply have more labor pools to draw from.
Benefit #3 – Extended Live Service Support Hours
Many companies partner with a BPO, initially, due to their customers complaining that support hours are insufficient for their needs. Most companies that offer 24/7 services enlist the assistance of a 3rd party to supplement their internal team to do so.
Providing support 24/7 with an internal staff, exclusively, presents numerous challenges. In the simplest terms, however, it’s a financial consideration more so than any other. Having personnel available to handle calls, chats and email around the clock is expensive. At first look, you might think the only incremental fee is the labor costs of the agents who wouldn’t be there otherwise. In reality, there’s much more to consider than just that.
Your company will incur additional expenses beyond payroll to remain open 24/7. There are incremental costs such as utilities, supplies, software licenses, computers, telecommunications costs and much more.
One must also consider the added support costs to ensure your staff working during “off hours” is doing their job correctly. This is typically found within additional QA costs. Most companies, unless they’re large and/or already have management personnel present during such hours, allow the few agents working during the “graveyard” shift to do so without direction supervision present. As a result, their work is typically audited more frequently, and more extensively, to ensure no liberties are being taken that shouldn’t be.
Beyond the financial considerations of being open 24/7, most companies that analyze their after-hours volume conclude that having someone on payroll is hard to justify based on how inefficient they would be most, if not all, hours. However, they recognize there’s an opportunity cost associated with being closed since customers wish to shop, or seek support, when it’s convenient for them, not you.
Many BPOs are open 24/7, as Ameridial is. We have the benefit of being able to share personnel across programs during such times and only bill our clients for the time we’re representing them (and never for down time). As a result, our partners don’t pay for inefficiencies yet can offer 24/7 support to their customers. It’s a winning formula for everyone involved and one your customers will certainly appreciate!
At Ameridial we work closely with our partners to design custom support solutions including providing service up to 24/7/365. We’d be happy to discuss how we can help contribute to an ideal customer experience by extending your live service hours and complimenting your internal team. Please contact us and let us know if we can provide further details on our partnership offering.