Cofounder and CEO of PissedConsumer, a review platform that helps consumers be heard and brands improve their customer service processes.
Your customer service team mans the frontline upon which you directly interact with your customers; dealing with their inquiries, concerns and issues and, most importantly, building and maintaining a positive relationship. As your business expands, ensuring your customer service team can continue to provide the same standard of service becomes increasingly challenging, and you will come to a crossroads. At this point, it needs to be asked: Which way do you go to scale up most effectively? In-house or outsourced customer service?
Here I want to take a brief look at the factors that distinguish in-house vs outsourcing, and also provide some recommendations on which approach is best suited to which style of business.
In-House Customer Service
The Benefits
In-house-based customer service means having your own dedicated team from within your organization that is trained to process customer inquiries and offer customer service support. This approach certainly has communication advantages, as your employees are already familiar with the existing structures and protocols of your business, and thus be able to smoothly cooperate with management and other departments.
In-house customer service has the best product knowledge and the most direct communication lines to operations and product teams. Such clear connection facilitates continuous feedback and hence promotes continuous improvement and refinement of processes to the appreciation of the customer.
Brand Identity
Going in-house also gives more control over the customer experience. It is easier to propagate the firm’s culture onto in-house customer service and set service standards at a higher level. If your CS team is well-versed in the values and culture of your business, this can deliver consistency of message and expected service quality to your customers. Both aspects bolster your brand image and customer relationship.
It can be useful to take a look at real-world examples of successful implementations of in-house customer service. While few big names operate a solely in-house customer service team, many, such as Trader Joe’s, Amazon and Netflix, do utilize a hybrid approach and outsource their call centers, an overlap that brings together the benefits of both solutions.
The Shortcomings
Indeed, there are limitations to taking an in-house approach. Sourcing, training, managing and establishing the requisite infrastructure for a customer service operation under your own roof demands a significant investment. For smaller businesses, this cost can be prohibitive. Furthermore, the whole process takes time to get up to speed, and even longer to iron out all the creases and get things running smoothly.
Outsourced Customer Service
The Benefits
Major U.S. companies such as Target and Bank of America have already outsourced their customer service call centers to countries such as India and the Philippines to save on labor overheads. Both countries have high English proficiency and lower salaries. Yet this does come with its own communication drawbacks.
A third-party team will not be as familiar with your company’s culture and processes as an in-house team would be, yet you would be getting access to a team with experience in the field of customer service and familiarity with the pitfalls and mistakes that an in-house team may have to learn about through trial and error, allowing you to hit the ground running, as it were. An outsourced provider will also have, over time, refined and streamlined its infrastructure and processes, reducing man-hours and customer waiting times.
Cost Savings
For those without the resources to build up their own customer service team from scratch, the other solution is customer service outsourcing. Contracting a third-party provider saves the burden of start-up costs, a boon for fledgling or small to medium-sized businesses that need to be agile, and outsourced customer service at a scale will bring significant savings. This solution also allows instant implementation, bypassing the teething period inevitable with a homegrown alternative.
The Shortcomings
An important point I always mention is maintaining consistency of message, and also a motivation and manner that represents the identity of your company. Ensuring alignment and consistency with your company’s core values and culture can be complicated to maintain with outsourcing. Another aspect of this potential misalignment to consider is that customers do appreciate a personalized approach, considering it a hallmark of excellent customer service, and consistency is central to this.
What becomes absolutely necessary then, is for an existing manager to oversee this outsourced solution, to supervise and ensure that quality standards are being met. This may or not be feasible, based on the available resources or the fluidity of communication between your managers and the outsourced team.
In-House Or Outsourced Customer Service: Main Considerations
According to statistics, 89% of consumers say that they will be more inclined to make a further purchase from a business after a great customer service experience, so investing time and money in this area to make sure you get it absolutely right will certainly pay off.
Consider what matters most to your company, your main strengths and what your customers see as your greatest positives. An optimized solution would balance customer service improvement and a certain amount of control over operations with access to expertise and manageable costs.
Advantages Of In-House Customer Service:
- Better oversight and enactment of company culture and values
- Shorter communication chain
- Easier to maintain consistency
- Better knowledge of your product/service
Disadvantages Of In-House Customer Service:
- Significant financial outlay for infrastructure, hiring and training
- No access to specialized expertise and advantages of experience in the area
- Scaling difficulties as the company grows
Advantages Of Outsourced Customer Service:
- Immediate access to a tried and tested customer service process
- Reduced initialization costs
- Flexibility to scale up or down
Disadvantages Of Outsourced Customer Service:
- Diminished control over the customer experience
- Misalignment with company culture and processes
- Longer lines of communication and the need for supervisory staff
The decision between in-house and outsourced customer service solutions can determine the trajectory of your company, so consider the circumstances of your business, the pros and cons of each approach, and select the way forward that best meets the aim of delivering an exceptional customer experience.
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