Customer Service Outsourcing for Small Business: Best Tips and Pitfalls to Avoid

The success of a business is closely tied to the quality of its customer support services. Unfortunately, many small businesses face challenges due to inadequate customer service.

To overcome this, an increasing number of companies are turning to outsourcing. By entrusting customer support to an outsourcing provider, businesses can improve service quality and, consequently, drive growth.

If you're considering this strategy, careful preparation and planning are crucial. In this article, we’ll discuss key tips and common pitfalls related to outsourcing customer service for small businesses, providing you with the insights needed to make informed decisions.

11 Tips For Better Customer Service Outsourcing for Small Business

Outsourcing has been a common practice since the 1950s, but it has become increasingly popular in recent times, thanks to advancements in IT that have streamlined the process of delegating services to external teams.

Customer service support tops the list of commonly outsourced services. This is largely because shortcomings in this area can lead to customer attrition. Recognizing this, many multinational companies now outsource their customer support to specialized providers to enhance service quality and efficiency.

However, outsourcing isn’t without its risks. If not managed properly, it can adversely affect the quality of customer service. To mitigate these risks and ensure that your outsourcing venture is successful, here are eleven essential tips to follow:

1. Establish Your Requirements

Initiating the outsourcing of customer support necessitates a clear understanding of your specific needs and expectations. In 2020, Deloitte conducted a comprehensive global outsourcing survey, revealing the various motivations companies have for opting to outsource. The findings included:

• 40% of companies outsourced to increase flexibility.
• 70% were driven by the potential for cost reduction.
• 15% sought access to specialized tools and resources.

These insights underscore the importance of pinpointing your own motivations and objectives for outsourcing. Consider addressing the following questions to gain clarity:

1. What is the primary reason for outsourcing your customer support?
2. What specific advantages are you aiming to achieve?
3. Is around-the-clock support a necessity for your business?
4. Which facets of customer support do you want to enhance or delegate?
5. Are there particular tools or technologies you require the team to utilize?

Answering these questions will facilitate a targeted approach to selecting an appropriate and skilled outsourcing partner, ensuring that your choice aligns with your business objectives and operational needs. This preparatory step is crucial for making informed decisions that will augment your company's efficiency and customer satisfaction.

2. Equip Your Team

Enhancing customer support requires your outsourced team to be well-versed in every aspect of your business. They need a comprehensive understanding of your business's motto, the industry-specific terms, and the overall operational framework.

Although it’s expected for the outsourced team to conduct detailed research on your business, it's equally crucial for you to provide them with tailored training materials and resources, including user manuals.

Consider creating a checklist outlining essential steps and information the team should be equipped with before they commence their services. This ensures they are well-prepared to offer exceptional customer support that aligns with your business's standards and expectations.

3. Conduct Regular Meetings

It's essential to schedule regular meetings with your team to review and discuss their performance. These sessions provide an opportunity to address weaknesses and highlight areas that need improvement.

During these meetings, evaluate the successes and challenges faced by the team. Engage in collaborative discussions to devise strategies for overcoming obstacles and enhancing productivity.

Keep your team informed about upcoming developments in the business. Whether it's scheduled maintenance, product launches, announcements, or any other updates, maintaining open communication ensures everyone is aligned with the organization’s objectives and expectations.

4. Connect with Experienced Business Owners

Engaging in conversations with entrepreneurs who have experience in outsourcing can provide invaluable insights. Reach out to those who have already navigated the process of hiring an outsourcing company for their customer support needs.

Ask about their hiring process, their experiences, and the strategies they use to manage and monitor the outsourced functions effectively.

These discussions can offer you practical insights and help outline a clear path to successfully outsourcing your small business’s customer support while ensuring quality and efficiency.

5. Ensure the Outsourcing Company Aligns with Your Culture

Before engaging an outsourcing company, it's vital to understand their values and assess if they align with yours. You can gain insights into their ethos by asking detailed questions about their past experiences and collaborations with other agencies.

Take the time to review their track record and inquire about their operational approach and quality assurance methods. This process will provide clarity on whether the company’s values and work ethics are a match for your organization.

If there's a mismatch yet you're considering proceeding, it's essential to communicate your values and expectations clearly. Provide them with a well-defined strategy and insist on adherence to ensure that your organizational culture and quality standards are maintained.

6. Provide Technological Compatibility with Your Outsourcing Partner

It’s essential to confirm that your chosen outsourcing partner is well-acquainted with the specific hardware and software that your business utilizes.

A seamless integration of technological platforms ensures an efficient working relationship, saving time and facilitating immediate commencement of projects.

A fundamental aspect of this alignment involves the communication methods employed by the outsourcing company.

A study by TalkDesk reveals customer preferences in communication channels: 36% prefer phones, 33% opt for live chat, 25% use email, and a mere 5% rely on online support portals. Ensure your partner is proficient across these channels.

Also, prioritize understanding the security measures they have in place. As they'll have access to your data, their security protocols and data-handling procedures should be robust. Discuss these concerns upfront, ensuring your data's safety and fostering a trust-filled partnership.

7. Choose Between Inshore and Offshore Outsourcing

One critical decision is choosing between inshore and offshore outsourcing.

Offshore agencies often offer budget-friendly options, with affordability varying by location. However, there are challenges associated with this choice. Time zone differences, reduced collaboration, and language barriers can affect work productivity.

Additionally, legal inconsistencies can arise when contracting offshore agencies. We recommend consulting an international law expert before finalizing any agreements to navigate these complexities efficiently.

In contrast, inshore outsourcing can mitigate these issues, promoting seamless communication and collaboration. Consider the pros and cons of each to make an informed decision that aligns with your business needs and goals.

8. Monitor Key Performance Indicators

It’s crucial to regularly assess key performance indicators (KPIs) to evaluate the effectiveness of your customer service team. By setting clear standards and communicating these to your team, you ensure alignment with organizational goals and optimal performance.

If you're not well-versed in KPIs or unsure of the benchmarks to set, don’t worry. Here are some generally accepted industry standards:

• Response Time: Aim for under 24 hours for messages, less than 1.5 minutes for live chat, and under 3 minutes for phone responses.
• First Contact Resolution Rate: Strive for around 65% or higher.
• Average Handle Time: Target approximately 3 minutes and 18 seconds.
• Net Promoter Score: A score of 70% or higher is desirable.

At Simply Contact, we not only benchmark our performance using these KPIs but have also surpassed some industry standards.

A vivid example of our dedication to excellence is our AHT Improvement project. Conducted within the Call Center (CC) department at the Wizz Air project, our primary goal was to decrease the average handling time (AHT) for both ITA and ENG lines.

Since the project's implementation, we've achieved a 30% reduction in AHT. Impressively, we've also managed to cut the AHT on the Italian line to a mere 2 minutes and 45 seconds, surpassing the contractual requirement. This accomplishment has not only bolstered our overall call center performance but also empowered our agents to manage more calls efficiently and effectively.

9. Proficiency in Language

It goes without saying that language proficiency is crucial. Your outsourcing partner must be fluent in the language that your customers speak.

This ensures effective communication and allows the service providers to connect with customers on a deeper level, showcasing empathy and understanding. The ability to communicate seamlessly in the local language enhances the overall customer experience, fostering trust and satisfaction.

10. View Customer Service as an Evolving Strategy

With advancements in AI, expectations and tools for customer support are rapidly evolving. Each day introduces new technologies, innovations, and heightened customer expectations.

Thus, customer service shouldn't be limited to just calls and messages. Consider it a dynamic area that demands your ongoing attention.

Ensure that your outsourcing partner is equipped to navigate this ever-changing landscape of customer service. Stay proactive and be ready to adapt your strategy as changes arise.

11. Scale Your Outsource Team

It's crucial to adjust the size of your outsourced team as needed. Overburdening them can hinder productivity and adversely affect your customers.

For peak times, like Cyber Monday or Black Friday, when there's a surge in messages and orders, consider expanding your team temporarily. This will ease their workload, allowing them to maintain high-quality service.

Following these tips can play a significant role in securing a proficient outsourcing company that aligns with your business needs, ensuring a positive collaboration.

However, like any business strategy, outsourcing isn't without its challenges. In the following section, we’ll explore potential obstacles and how to mitigate the risks associated with outsourcing.

4 Pitfalls in Customer Service Outsourcing

We’ve identified several common mistakes small businesses make when hiring and managing outsourced companies. Here are the top four:

1. Lack of Management Oversight

With an increasing number of outsourced teams, there arises a need for multiple managers to effectively oversee them. Otherwise, while you might have a skilled customer service team, they might struggle to satisfy your customers.

Such a team may be uncertain about appropriate responses to customer queries, unaware of operating hours, or unfamiliar with current business promotions and services.

In the absence of managerial support, they lack a point of contact for addressing concerns, assessing performance, or receiving feedback. Also, without a designated intermediary, potential grievances within the team might go unaddressed.

Therefore, it's crucial to have a manager to facilitate communication with your outsourcing agency, bridging any gaps between the company and the team.

However, if your outsourced team comprises only three to four members, a dedicated manager might be unnecessary. Instead, assign someone the responsibility to liaise with the team as needed.

2. Training Challenges

As mentioned earlier, it's imperative to train your outsourced team. Without proper training, they may struggle to align with your customers' objectives.

An untrained team can lead to prolonged frustration. The lack of training compromises the quality of their results.

During the initial months, prioritizing team training is crucial. However, you might encounter these challenges:

• Limited time for training your outsourced team.
• Time zone differences, especially with offshore companies, complicate training sessions outside regular business hours.
• Delays in updating training documents or user manuals. These resources are vital for team training, so ensure timely updates.
• Infrequent feedback sessions can be instrumental in understanding their challenges and for peer learning.

Neglecting these training challenges can adversely affect your team's efficiency and productivity.

3. Neglect Vital Metrics

Understanding key customer support metrics is crucial. However, many businesses overlook this, hindering their ability to measure the effectiveness of their support team.

Business owners who fail to regularly evaluate these metrics often incur unnecessary expenses. They might either have too many staff members, leading to increased costs, or too few, resulting in unsatisfied customers.

Stay connected with your marketing team to stay abreast of current trends and future expectations. Regular monthly marketing analyses ensure your support team aligns with business goals and customer expectations.

Never underestimate the importance of tracking and analyzing key performance metrics.

4. Lack of Scalability

Earlier in the article, we highlighted the importance of scalability. Yet, many business owners neglect to adjust their business demands in line with their operational capabilities.

Often, they're uncertain about the number of tasks their team should handle daily or whether the team can even meet such expectations. If tasks go uncompleted or if there are recurrent errors, what's the underlying cause?

A major reason for reduced team productivity often boils down to poor communication between the owners and the team members.

It's essential to evaluate your workload regularly and monitor your team's performance. This helps in identifying top performers and those who might need additional support or training.

Now that we've explored the common pitfalls associated with outsourcing agencies, you might be wondering about the potential benefits. Let’s delve into the positive aspects of outsourcing in the following section.

5 Key Benefits of Outsourcing Customer Services

Cost efficiency	Building an in-house customer service team can be expensive, considering the personnel, infrastructure, and administrative costs. By partnering with an offshore company, you only pay for the service, often at a fraction of the in-house operational cost.
24/7 customer support	Ensuring round-the-clock customer support can be a challenge with an in-house team. Outsourcing to service providers across different time zones guarantees that your customers receive timely assistance, at any time of the day or night.
Language proficiency	For global businesses, language can be a barrier. Outsourcing provides access to teams that are fluent in the local languages of your customer base. This fosters better communication and understanding.
Focus on core business activities	Outsourcing customer service allows your team to concentrate on core business functions. With a dedicated external team handling customer inquiries, your staff can focus on strategic growth initiatives and improving product or service quality.
Enhanced customer satisfaction	Outsourcing to a proficient team ensures swift, empathetic, and effective responses to customer queries. When customers receive prompt and competent assistance in their native language, their satisfaction and loyalty increase.

With these advantages in mind, you might be wondering where to find the right outsourcing partner.

Where to Find an Outsourcing Team?

Well, there are several places where you can outsource a team. Some popular options include:

• Review platforms like Clutch, Goodfirms, G2, etc.
• LinkedIn
• Networking events and conferences
• Direct referrals from other business owners

When selecting an outsourcing provider we recommend reviewing their expertise in your industry, their approach to analytics and quality control, and how they ensure cost-efficiency.

Conclusion

To summarize, outsourcing customer services offers numerous benefits, but it's crucial to have a well-planned strategy and be wary of common mistakes.

By implementing the tips shared in this article, you can steer clear of the mistakes often made by others in the business realm during the hiring process.

Have questions or need tailored solutions for your unique business needs? Don’t hesitate to reach out to Simply Contact. Our team of experts is on standby to assist you in navigating the world of customer service outsourcing with ease and confidence.