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Providing excellent customer support to your clients is a top priority for any business. It can improve your customers’ overall experience, elevate your brand image, and foster loyalty. It can even be argued that as the bridge between you and your customers, customer support can make or break a company’s performance.
To nurture customer relationships and put your best foot forward, your company needs to have a strong and capable customer support team that is guaranteed to deliver. However, while this function is vital for operational success, decision-makers face a dilemma: should customer support teams be in-house or outsourced?
This article will discuss the differences between in-house and outsourced teams, as well as the factors to consider when choosing between the two.
In-house vs. Outsourced Customer Support Team
The main aspect that sets in-house and outsourced teams apart is the source of the labor.
In-house teams—also known as insourced—are teams made up of individuals that are hired under and work directly for the company. In-house customer service teams are hired, trained, and managed by people within the company itself. These teams also use the equipment and resources that the company provides.
Outsourced teams, meanwhile, are contracted through a third-party service provider. Every aspect of these teams—hiring, training, workflow, and management—are covered by this third-party organization. Additionally, the service provider covers the office space, equipment, and other resources needed by their staff to perform services for the client company.
Factors to Consider in Choosing Between In-house and Outsourced
For providing customer support, there are several factors to consider when choosing between an in-house and outsourced team.
1. Size
There are two ways to discuss size: the size of the team you want to build and the size of the office space that you plan to place them in. When it comes to the size of the team, it’s important to determine not only your immediate or near term needs, but also try to predict your anticipated growth and your ability to manage and house a large number of people.
If you are only catering to a small number of customers, it may be wise to outsource your customer support instead of building a team internally. By outsourcing, you don’t have to spend a lot of money building the infrastructure, recruiting the talent and training the new team, all of which a call center can handle for you.
However, a big customer support team can be challenging to manage and oversee, especially if you are a budding startup. An outsource call center’s expertise in managing a large group of people with unified training and performance may also help.
The size of your office can affect the decision to hire people for an in-house team, as well. The workplace should be large enough to accommodate all current employees comfortably, as well as the anticipated amount of new hires to comprise your customer support team. Otherwise, an outsourced team will operate in a separate location from your company, reducing your space requirements.
2. Cost
Investing in an in-house customer service team will require large upfront capital spending on the necessary infrastructure, labor, and overhead costs. Outsourcing to countries such as the Philippines typically will result in savings of 50%-70% from the cost of hiring internally. When comparing outsourcing to an in-house team, it’s important to not just compare the hourly rate of the outsource center to the hourly rate of an in-house person. That would be like comparing apples to oranges. The hourly rate you pay for an in-house employee does not include the percentage of the overhead costs that can be allocated to each employee including: recruiting costs, rent, utilities, management cost, payroll taxes, benefits (including health insurance, paid leave, vacations). Whereas, with an hourly rate you pay an outsourced call center, all of those items are baked into their flat hourly rate.
3. Flexibility
For businesses that cater to international markets or want to provide more accessible customer service, having a customer support team that can work at any time or during peak hours is vital.
In-house teams may be restricted to local time zones and require special wage arrangements for odd hours. Outsourced teams may be able to work around these requirements, especially if they are located in a different time zone.
4. Scalability
Depending on the nature of your business, you may experience seasonal or cyclical sales. This can lead to peaks at certain parts of the fiscal year, with little activity before and after. An in-house team may be enough for off-season concerns, but outsourcing may be necessary to address the increased demand during peak season adequately.
Outsourcing customer service can also be advantageous for smaller businesses wanting to focus on growth opportunities.
5. Management
Creating an in-house customer support team will require the resources and labor necessary to complete the recruitment and training process for these specific roles. Outsourcing service providers primarily focus on these aspects, resulting in a more streamlined process and a roster of already-capable staff.
6. Expertise
With some products and industries, having more specialized knowledge or technical understanding is crucial to offer valuable and effective support solutions to customers.
In-house training can ensure that your customer service teams are at the level of expertise needed for the job. Getting this same level of expert knowledge from a third-party provider may depend on the provider’s capabilities and the terms of the contract. However, with video conferencing technology, your ability to train a remote outsourced workforce has never been easier, and in many ways is better than having to schedule in-person training.
7. Technology
Setting up customer service operations will require the infrastructure necessary to run it effectively. Workstations, storage spaces, servers, telephone lines, and other IT resources are just some of the equipment needed to keep operations in proper working order.
This technology will also need to be regularly updated or upgraded to satisfy both operational and cybersecurity requirements. This kind of infrastructure is a costly investment for in-house operations.
8. Security
Another top priority for companies is data security. Keeping sensitive customer information safe from cyber threats or unauthorized access is essential for operational requirements and fostering trust with clients.
Contracting a service provider may open up points of security breaches, depending on how thorough their data security protocols are. However, you have to keep in mind that the people you are outsourcing are good at what they do. As an entity, they are more focused and determined to keep your data secure.
If your company plans to have the outsourced call center process credit card payments, it is critical to work with a call center that has been audited by a third party security company and has been certified by the Payment Card Industry Data Security Standards (PCI DSS).
Moreover, if your company works with Private Health Information (PHI) then the Health Insurance Portability and Accountability Act (HIPAA) applies to you and your venders with access to PHI:
A. Payment Card Industry Data Security Standards – These standards have been established to secure debit and credit card information that is shared with you over the phone and stored within your company. To comply with the PCI DSS standards, your company needs to get certified by the Payment Card Industry Security Standards Council (PCI SSC).
The certification process is very expensive to set up. Outside third party security auditors are required to obtain your Attestation of Compliance. By using an outsourced call center that already has their PCI compliance in place, it will save you tens of thousands of dollars annually.
B. Health Insurance Portability and Accountability Act – HIPAA was established in part to secure and protect health care information, and other health related transactions such as patient’s billing details provided by your customers. Some outsource call centers specialize in healthcare services and have all of the processes in place to ensure HIPAA compliance.
9. Brand Awareness
Customer service representatives are the customer’s first point of contact with your brand. Having reps who have full knowledge of your brand—from its vision to the full suite of offerings—can make all the difference in the way a support transaction is handled.
Outsourced teams may not be able to have the full grasp of your brand the same way that in-house reps with firsthand experience will, though with the proper training, the outsource reps can get up to speed quickly.
10. Language and Culture
A good customer service team can embody the language and culture of your target audience, creating a smooth and seamless support experience. Depending on the demographic of your company’s client base, an in-house team may have an advantage with local clients.
If you want to have a customer support team that is flexible and can adapt to different customs and cultures, outsourcing your customer support team is your best bet. Keep in mind, though, that careful screening is needed to ensure that an outsourced team can uphold the level of proficiency required to be effective.
11. Control
Being able to change and control aspects of the work process, especially for customer service, may be necessary to deliver good customer service.
Outsourced customer support teams are less controllable, as the service provider may have their own workflow and processes in place already. You have to sit down and put a management strategy in place just for your outsourced customer support team.
In Summary
While in-house operations allow for a more specialized and branded service, a huge investment is needed to ensure its effectiveness. Outsourcing customer service can greatly reduce the investment required to hire and train a team, allowing for better scaling and flexibility. However, companies will have less control over the overall workflow and need to assess the risks involved with working with a third-party provider.
At the end of the day, deciding between an in-house customer service team and outsourcing with a third-party service provider will depend on the company’s needs.
For your business function outsourcing requirements, Executive Boutique Call Center offers excellent service from top-notch professionals. Contact us today for more information.