Pros and Cons of Outsourcing Customer Service to an Offshore Call Center

• Using third-party offshore call centers can be more affordable than setting up in-house customer service operations.
• The cost advantages of offshore call centers can come with challenges in communication, data security and how your customer service team operates.
• When choosing whether to outsource your customer service to an offshore call center, consider language and cultural barriers, technology differences, customer experience, and the call center’s client portfolio.
• This article is for small business owners considering outsourcing their customer service operations to an offshore call center.

Many businesses outsource their customer service to a call center to save time and free up staff to focus on tasks other than managing the phone lines. Call center services offer trained agents who handle your incoming calls based on a script or guidelines you create for them. Call centers often engage in other services as well, such as order management, complaint resolution, technical support and outbound marketing campaigns.

To cut costs, some businesses look abroad for a call center service provider. While offshore call centers are typically less expensive than their domestic counterparts, there are some major considerations a business owner should keep in mind when choosing whether to partner with an international contact center.

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Editor’s note: If you’re looking for the call center that’s right for you, use the questionnaire below to receive information from a variety of vendors for free.

What is an offshore call center?

A call center is an external party that responds to inbound customer queries on a company’s behalf. Some services also conduct outbound calls as well depending on your needs. These call centers operate in place of an internal customer service department. An offshore call center is simply a call center that is based outside of the company’s home country, usually overseas.

It’s no secret that many companies outsource their customer service management to overseas call centers. India and the Philippines are the most prominent countries where offshore call centers are located. These international call centers typically offer companies lower rates because the labor costs in these countries are much lower than in the U.S. However, it’s critical that business owners don’t lose sight of what’s important when considering moving their call center operations overseas.

Bryce Maddock, CEO of TaskUs, a California-based outsourced customer support provider with offices in the Philippines, warned that costs aren’t the only factor to weigh. Businesses also need to make sure the provider they choose won’t compromise their brand and, most crucially, the customer experience.

“The most common mistake companies make when choosing a call center is focusing exclusively on price,” Maddock said. “Service, reliability and cultural fit should never be discounted. Choose the call center that fits your brand and company culture, not just your price point.”

For a long time, this has been the major point of contention between domestic and offshore call centers. Domestic contact centers assert that employing native English speakers as agents eliminates the cultural barrier associated with offshore call centers. Domestic contact centers also tend to maintain a technologically superior infrastructure compared to overseas call centers. However, a more recent phenomenon has given rise to yet another kind of contact center: the nearshore call center. 

Nearshore call centers

Nearshore call centers are designed to blend the quality of service found in domestic call centers with the cost-effectiveness of offshore call centers. These contact centers are typically located in Central America or the Caribbean and have a significant number of bilingual agents as well as native English speakers. Nearshore call centers also tend to minimize cultural barriers because there is more travel back and forth between nearshore countries compared to truly overseas call centers.

Pros and cons of offshore call centers

To determine if an offshore call center fits your needs, you’ll want to carefully evaluate the benefits and disadvantages of this kind of customer service arrangement. Consider the following pros and cons so you can make the decision that’s right for your business.

Pros of using an offshore call center

• Lower wage costs: The primary reason companies outsource their customer service to offshore call centers is that workers in many foreign countries are paid less than their U.S. counterparts. As such, using an offshore call center can be significantly cheaper for businesses than maintaining an in-house customer service team.
• Lower technology costs: Carrying out in-house customer service can require implementing technology like high-quality customer relationship management (CRM) software. Outsourcing customer service to an offshore call center eliminates these technology needs.
• More customer service availability: In an ideal world, your customer service line would be reachable 24/7. In reality, your employees probably work the standard 9 to 5 on weekdays, which is often all that small businesses can afford. However, with offshore call centers’ low rates, providing affordable 24/7 customer service enters the realm of possibility.

Cons of using an offshore call center

• Lack of control: The geographical distance inherent to international outsourcing can make controlling your customer service operations tougher. Presumably, you can’t easily visit an offshore call center to see the agents in action and discuss performance in person.
• Fewer regulations: Offshore call centers are not obligated to adhere to the rigid security protocols outlined in U.S. law. As such, using offshore call centers can increase the chances of a data breach.
• Language and cultural barriers: Customers may feel dissatisfied if they reach an international representative with whom communication is difficult. We discuss this consideration in more detail below.

What to consider before outsourcing customer service to an offshore call center

Whether you’re leaning toward a domestic, nearshore or offshore customer service management partner, it’s important to consider a wide range of factors. While cost is a major factor, there is much more that goes into the decision to outsource your customer service and how to do so. After all, you’re trusting a third party with your brand image and your customers’ satisfaction – two of your most valuable assets.

We recommend looking into these factors before deciding on an offshore call center.

Language barriers

Naturally, with an overseas call center, your customers are likely to encounter a language barrier at least some of the time. Not only is this frustrating for customers (many of whom are already upset as they call about some sort of problem), but it can also reflect negatively on your brand.

Consumers often assume that outsourcing call center operations to an offshore service provider indicates an unwillingness to spend money on domestic customer service representatives. If you’re going to partner with an offshore call center, test the service first to see how clearly the agents communicate.

Cultural barriers

Even when language barriers aren’t a problem, cultural differences can get in the way of customer engagement.

Before outsourcing your customer service operations to an offshore call center, think about where there might be disconnects between agents and your customers. In some cases, social conventions might clash; where an agent believes they are being polite, a customer might perceive them as rude. When a customer asks a question about a product or service the agent has little direct experience with, the support representative might not have a suitable answer.

Prior to signing a call center agreement, find out how customizable the scripting options and guidelines for agents are and how sophisticated their knowledge of your company will be.

Technology

The technology supporting call service operations is a key consideration when deciding which call center to use, especially if the company is located abroad. Call centers should have redundant systems in case of a natural disaster or trouble with the local infrastructure. Otherwise, your customer service representatives could go offline, leaving calls unanswered. Customers expect brands to be responsive and helpful, and they aren’t typically sympathetic to gaps in service, especially when those gaps originate at an offshore call center.

Moreover, it’s vital to understand the level of security being applied to the communications data moving through the call center you choose. This is especially true for businesses in sensitive industries that might deal with privileged data, such as healthcare companies and law firms. Both software security and physical security at the facility itself are important considerations you should fully understand before making your decision.

Customer experience

Of course, the most important aspect of outsourcing your customer service – the true bottom line – is how well the call center supports your customers’ experiences. If a call center service offers you the lowest rate but agitates customers and harms your brand, the return on investment is not going to be worthwhile.

The best thing to do when determining whether to outsource your customer service to an offshore call center is to consider your customers’ needs and wants. Put yourself in a customer’s shoes and compare their perspective to what you know about each call center service you’ve investigated. If you’re not convinced that the call center will leave your customers satisfied, it’s too big of a gamble.

Client portfolio

Before finalizing your decision, look at the roster of companies the call center currently works with. This will help you identify if the provider is a good fit for your business. For example, if the call center works with mostly large-scale corporate companies and you’re a newly funded startup, that particular vendor is likely not a good fit.

Examining the call center’s clients can help you understand its offerings and the types of businesses it best suits. Ask providers who their top clients are, if they work with any of your competitors, and if you’ll be one of their largest or smallest clients.

Customers should be your highest priority, not budget

The main point of a customer service department is to ensure your customers are taken care of and satisfied; in fact, you should aim to provide customer service like a luxury brand. Done right, a satisfied customer is a return buyer and will recommend your business to friends and family. However, an unsatisfied customer will likely never return, oftentimes without a complaint or explanation.

While it’s tempting to save every last dime, cutting costs at the expense of customer experience is never wise. Instead, balance costs by outsourcing your customer service to a call center that will represent your brand the way your own staff would. Offshoring can be an incredibly effective way to achieve a balance between keeping costs down and providing adequate customer service. 

But to ensure that those two requirements are both reasonably met, make sure you do your due diligence and find the right partner. Otherwise, you’re better off using a more expensive domestic call center service or just keeping your customer service department in-house. For the latter, check out our picks for the best contact center software.

Jessica Pooree and Max Freedman contributed to this article. Source interview was conducted for a previous version of this article.