How Much Does It Cost to Outsource Customer Service
When competing globally, it’s critical to ensure that your prospects and clients have access to any customer service that they require, at all hours of the day and night. Offering this in-house is a significant challenge, particularly for smaller organizations, which is why many companies consider outsourcing their customer service to a third-party supplier. But if you want to outsource customer service, how much would it cost you? Which factors need consideration? How do you select the best provider for your clientele and target audience? Continue reading to find out!
Customer Service Types That Can Be Outsourced
The most common customer support mechanism that businesses consider outsourcing is their call center. However, providers also offer outsourcing services for:
- Email support: responding to client emails and inquiries after hours.
- Technical support: specialist support that necessitates some technical expertise.
- Live chat support: ensuring that customers can reach you via chat at any time and from any location.
- Peak time support: aids in dealing with any overflow from your own contact center during peak hours.
- Ecommerce support: may include email, chat, phone, and social media support so that potential buyers can get their questions answered fast.
Furthermore, call centers can be inbound, which means they answer consumer inquiries, or outbound, which means they initiate contact with the prospect.
Types of Call Centers
The types of services you require will determine which type of call center is appropriate for you. This will also assist you in calculating your outsourcing prices and other specifics.
Depending on the sort of service, each call center will require different types of tools as well as varying levels of experience.
Inbound and outbound call centers are the two basic types of call centers. These can be based in an in-house call center, an outsourced call center, or even a virtual call center in which agents work from home or different locations and answer calls via the cloud.
Outsourced call centers are typically less expensive than in-house competitors. These hubs manage inbound and outbound phone calls from current and potential consumers.
Inbound: Customers initiate calls to inbound call centers. Inbound call centers are commonly used by businesses to provide technical assistance, handle product or service inquiries, manage client accounts, address complaints, and even execute orders.
These inbound agents are better equipped to provide assistance and handle problems to the best of their abilities.
Outbound: Outbound call centers are typically used to call prospects and sell them products or services. They are also used to update/verify database information, telemarket, generate leads, perform surveys, follow-up on clients, and offer crucial additional information, in addition to sales.
Call centers frequently handle both inbound and outbound calls. The incoming vs outgoing call volume ratio determines the type of call center.
In-House vs Outsourced Customer Service Costs
Let us now get down to some hard numbers. Before you can decide whether outsourced customer service is for you, you need to know how much it would cost to provide the same service in-house.
Obviously, these values vary substantially depending on the country and whether your sales representatives require specialized knowledge or training.
In the UK, the typical basic income for a customer care professional is around £20,000 per year.
If you need a customer service manager to supervise your team, the starting salary is £29,000 per year.
Assuming you need 5 customer service representatives and 1 customer support manager to run your in-house contact center. This will result in a total annual cost of £129,000.
Remember that this figure excludes other costs like social security contributions, office space rental, phone/computer equipment, software licenses, and so on.
Now consider the average prices for outsourced customer service in various regions:
| Geography | Costs |
| North America | £15 – £30 per hour |
| Western Europe | £15 – £35 per hour |
| Eastern Europe | £10 – £20 per hour |
| Africa/Middle East | £10 – £15 per hour |
| South America | £5 – £15 per hour |
| South-East Asia | £5 – £12 per hour |
| India | £3 – £7 per hour |
The first thing you’ll notice is that most outsourced customer service providers charge by the hour. Depending on the organization, you’ll most likely begin with a minimum service agreement, with any more hours invoiced as extra.
What Is the Deal Structure for Outsourcing Customer Service?
There are several methods to arrange customer service outsourcing contracts. The following are the four most prominent methods:
Fixed-Fee: A fixed-fee agreement requires a one-time payment to handle all customer support contacts. Specific limits are usually imposed on the contract to ensure that the volume does not fluctuate too much over the course of the transaction.
FTE-Based: Many arrangements are structured based on the number of hours worked by the customer service provider’s full-time employees (FTEs). The cost is directly related to how long it takes to reply to all customer service interactions under this strategy. On the one hand, this is quite fair and reasonable, but it also provides some incentive for customer service to generate customer service contacts.
Transaction-Based: The number and type of transactions completed by customer service personnel determine this sort of arrangement. This paradigm also has some natural logic. The sole disadvantage is that it encourages agents to develop solutions that prolong the issue and necessitate repeated calls rather than resolving the issue fully.
Performance-Based: The amount of payment varies depending on how well customer service representatives perform on a variety of critical indicators. While this is a terrific deal for outsourcers, customer service providers are unlikely to accept it as the exclusive transaction type. Typically, a transaction will incorporate another agreement type as well as performance measures.
As you can see, there are numerous variables that might influence how much you pay for outsourced customer care. This essay is designed to serve as a rough guide to determining whether outsourcing is the best option for your company.
If you’d prefer pricing more accurate to your specific needs, we’d be pleased to provide you with an estimate based on your unique requirements!