Outsourced vs. In-House Customer Service

Benefits and Challenges of Outsourced Customer Service

When facing a choice of whether to outsource Customer Service or build an in-house department, many companies rush to compare the cost. But there are more aspects that you should consider. In this post, we brought two experts' opinions to give you a better perspective on both sides of the coin. 


The benefits of the outsourced customer service

“There are a number of benefits to outsourcing to a third-party contact center, and in most cases, the stigma around companies slashing jobs and cutting costs couldn’t be further from the truth” says, Jeremy Watkin, Director of Customer Experience at FCR in Eugene, Oregon. He adds, “Is your company located in a major metropolitan area like Los Angeles, San Francisco, or New York? Chances are you can save some money with an outsourcer and you don’t necessarily have to move that work offshore.”

The difference in overhead between New York and Oregon is only one advantage of outsourcing. It also adds redundancy for your customers. Watkin asks, “Is your contact center all in one location? What happens if you lose your internet connection and customers can’t reach you?” Supplementing your in-house service with an outsourced partner means customers have extra support.

It also helps a new company ramp up faster. Outsourcing “may be a better fit if you want to focus on keeping the core team lean” says Katherine Wong Too Yen, Senior Manager, Contact Center, Digital Banking at Equitable Bank “Outsourcing customer service allows internal resources to focus on core products.” She adds, “Outsourcers may be able to hire and train customer service Agents faster”, since that is their specialty. It also avoids the challenges of creating an in-house contact center. Those challenges include, "Potential costs if your office is not already set up for 24/7 access" including temperature control and overnight/weekend security access for employees. You also need the bandwidth to recruit, hire and train Agents.

The benefits of the in-house customer service

On the other hand, there are benefits to having your contact center in-house. Wong Too Yen mentions, "More control over coaching, training, mentoring and career pathing for agents." The contact center feels like part of your company, since they ARE part of your company. It enables career pathing so, your best Agents stay within your company, compared to an outsourced center where they may be transferred to other third-party accounts.

Other benefits she noted are the, "Ability to promote from within or transfer good hires to other departments." Contact center roles are often new employees’ entry point. It gives them a great overview of the company. It also instills a customer focus they can take with them as they move within your company. That means whether they move on to sales, marketing, engineering or accounting, they understand the customer’s viewpoint. That helps your entire organization be more customer experience focused.

She also mentions, "Improved team cohesion (with direct access to supporting departments) as a benefit. That is especially important if you have fast moving product launches because Agents can get quick answers from sales and marketing. It also allows the executive team to come down to the contact center, listen to calls during critical rollouts and gain first hand feedback from customers.

Ultimately, whether you choose to outsource or keep customer service in-house depends upon your needs. Consider the benefits and challenges before deciding what will work best for you.

Find more articles about CX and digital transformation HERE

To get more insights from the industry experts, watch the recording of our recent webinar with Mike Aoki, Jeremy Watkin, Vafa Akhavan and Martin Tracey "The New Trends Affecting the Future of the Enterprise Contact Centers" 

Watch the Webinar Recording

Author bio:

Mike Aoki is the President of Reflective Keynotes Inc., a training company that helps contact centers improve their sales and customer retention results. A contact center expert, Mike serves on the advisory council of the Greater Toronto Area Contact Center Association and was Master of Ceremonies for five of their Annual Conferences. He was also chosen by ICMI.com as one of the “Top 50 Customer Service Thought Leaders on Twitter” for the past four years.

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