I get it.
There’s truly nothing more valuable to your business than your customer base. The desire for a business to manage their customer communication within their organization, with their own employees, is completely valid.
However, just because customers will be serviced primarily by an internal customer experience center does not mean they should ONLY be serviced by internal customer support. When it’s not your core competency, internal contact centers, by their sheer nature, can lead to inefficiencies.
Instead of evaluating the costs as a whole, start by looking into the more granular areas where the cost to operate your internal customer support center can be improved by offloading some of the non-core or more expensive elements of your business. Too often we look at our average costs and forget that there are several scenarios where we are spending a significant portion of our cost, but getting a very small portion of the benefit.
It is worth considering handing off the areas that are the least cost-effective to you, optimizing your internal center’s operations and profitability and developing a back-up and redundancy plan at the same time.
This idea is called co-sourcing.
Here are 10 specific instances when a company that handles customer care internally should use an outsource partner to optimize the financial impact of their customer care strategy:
1.) When you have seasonality in your customer interactions
The seasonal hiring and training of new associates can be a time-consuming project, plus it creates a challenge for the business to manage personnel at the end of the busy season. Once you have identified what the total volume need is, consider only taking on a portion of the increase yourself and allow an outsourced CX partner to assume the more significant amount of the seasonality spike for you.
It will provide redundancy in the event you get behind for a training class or two and will decrease the challenges you have with potential layoffs as the call volume decreases at the end of the season.
2.) When your volume varies significantly by day of the week or time of day
Sometimes volume arrives in a way that simply isn’t conducive to staffing. Mondays are often larger than Fridays, but what if yours are 5x larger? Consider using an outsourced CX partner just on the days of the week where you know call volume is high and save on staffing and turnover costs associated with trying to force-fit schedules onto your employees.
Same with time of day. Maybe you have a 2 hour window where your calls spike drastically, but since it is difficult to hire for a 2 hour shift, you overstaff and lose efficiency in other parts of the day. Consider outsourcing only during the time of day where you know call volume will be high.
3.) When service level is being missed
Some partners want to take up to 100% of their incoming calls but also have identified the cost impact of missing service level. Most telephone switches are capable of routing calls based on their hold time. Consider outsourcing only calls that have reached your service level to an outsource partner to be sure they are being handled as soon as possible.
4.) To offset your poor performers
In most environments, the bottom 10% of the call center agents only produce about 60% of the financial gain on average. Unfortunately, because there are volume requirements (especially during busy season) we are reluctant to hold the low performers accountable for their efforts since there is nowhere else to turn.
By bringing on an outsourced CX partner that gives you a cushion, you are able to stay more consistent in your internal policy execution bringing down your overall cost. In some cases, more than the total investment you will make in the outsource partners.
5.) New product launches / Test offers
We’d all love to be a little more creative but we realize that once we release a new promotion or Standard Operating Procedure to the floor we are often stuck with the mindset that it creates, either positive or negative. Consider using an external customer support partner for executing tests and developing benchmark results that can be brought back into your center with established goals.
6.) Keep your talented people on the most important stuff
Oftentimes you have great internal people that are getting bogged down handling simple requests instead of being used in the places they are most valuable. In these instances, consider outsourcing the least complex items to a partner and keep the most complex inside.
This can be either within a specific channel, such as outsourcing customer service calls and keeping tech support inside, or by selecting the easiest channels to outsource (like email or chat) and keeping all phone calls inside.
7.) To shift some fixed cost to variable costs
Once a campaign has a track record, many good customer support centers will accept projects on a pay-for-performance (PFP) basis. By transitioning a portion of your volume to an external partner on a PFP basis you can hedge some of your expenses to be sure you are always within your target Cost of Good Sold ratios. In some cases, you can use this approach as a throttle to reach short-term expense goals.
8.) To save short-term cash flow
When growing internally, you need to place ads, interview, hire, train and then slowly bring your team up to speed, being burdened by payroll every 2 weeks at the latest. With an external customer support center, you can often avoid training fees (sometimes requiring a volume commitment), only get invoiced at the end of the month and have a full 30 days to pay the invoice, gaining up to 60 days of cash flow savings in some instances.
9.) To create internal competition
In most instances, the sheer presence of an alternative makes sure everyone is putting their best foot forward. By having an external vendor handling some portion of your work, you will receive a steady stream of new ideas, have a benchmark to compare performance to, and ensure your internal staff is consistently striving to improve.
10.) Expanded hours of operation
Maybe you want to stay open until 9:00 PM on the west coast but are an east coast company and are having a hard time staffing the later hours. Maybe your cost to recruit a weekend employee is 2x that of recruiting one that works 9- 5.
Consider using a contact center to staff low-volume off hours or in places that are hard to staff internally. These are likely also the times that your supervisor ratios are out of alignment, so you can better utilize your best people when the calls are coming in.