The Pros and Cons of Call Center Outsourcing

It goes without saying that call centers are an important part of every company. Nevertheless, outsourcing your call center functions may seem appealing for many reasons - from financial to administrative. Let us take a look at the pros and cons of this step.

Pros of Call Center Outsourcing

1. Cost reduction

Running a call center may require significant operational, infrastructure, overhead, and labor costs. Outsourcing some or all of the call center functions can save you up to 50% and make these expenses a fixed cost.

2. Experienced staff

Outsourcing call center provides your company with trained agents at a price that won’t break the bank. You don’t need to worry about their hiring, training, and management. All this is an outsourcer’s headache.

3. Better technology

What sets many outsourcing call centers apart is the leveraging of better technology. They bring added value by investing in the latest call center solutions. The right contractor will give you an opportunity to benefit from innovative solutions without sky-high upfront investments.

4. More scalability

Outsourcers can easily handle high call volumes that are caused by holidays, bad weather, special promotions, and more. Your contractor can seamlessly change your number of seats.

5. Longer service hours

Call center outsourcing allows you to provide 24/7 customer support that won’t cost your company all money in the world. Such an option may significantly improve your customer experience.

Cons of Call Center Outsourcing

1. Lack of control

As a matter of fact, outsourcing means that you assign some of your business tasks to a stranger. A qualified one but a stranger. It is more difficult to ensure appropriate quality monitoring so there is always a risk that you won't be able to deliver your brand promise properly.

2. Lack of industry or company knowledge

Outsourcer’s agents aren’t familiar with your company culture, practices, and policies. These call centers serve a broad range of companies and rarely have a specialization in one industry. Therefore, if your product or service is one that requires special knowledge outsourcing may be a risky idea. You need to ensure that the customer service reps can give the perfect technical support to your customers.

3. Language barriers

Call center outsourcing typically means moving this function to some low-cost country. Therefore, it is possible that outsourcing call center agents may lack the necessary language skills and cultural knowledge. It may cause some misunderstandings with customers so pay special attention to the language proficiency of your outsourcer’s agents.

4. Data security

As outsourcing call centers are often located beyond your country’s borders they follow different data protection regulations. Also, their agents may not be subjected to the same background checks as your local employees. So if you use some sensitive information it is better to set up an in-house call center.

5. Focus of an agent may be divided

In outsourcing call centers, agents often handle calls for multiple clients. It may divide their attention and affect call quality. You have to accept that they will never be 100% devoted to your company.

6. Lack of feedback

There is no need to say how important customer feedback is. A good call center manager constantly tracks the change in customer expectations and keeps up with their desires and feelings. Outsourcing can distort this process due to extra levels of management and increased distance between company and customer.

An in-house call center gives you an opportunity to communicate with customers directly. It lets you know how to improve your product and what they want to buy next. When you outsource this function, a lot of this feedback gets lost. You know the number of handled queries and deal with specific cases but your information flow is not so wide as with an in-house call center.

What is Right for You?

It all depends on your company’s specific needs and policy. It is up to you to decide on what option to choose. However, let us try to outline the main points when you may need an outsourcing call center:

Low call volume. When you have up to 100 customer requests per day running an in-house call center simply doesn’t make sense. Assigning this call handling to an outsourcer will be cheaper and more effective.

Sales calls and telemarketing campaigns. This task requires special skills and experience. Sales reps need to be persuasive and stress resistant, understand a prospect’s behavior. Furthermore, their training and onboarding take time and effort. That’s why many companies, both small and large-sized, outsource their sales and telemarketing campaigns.

Handling simple requests. Customers may ask some simple questions about your product or service that do not require deep knowledge. This task could be easily handled by outsourcing call center agents. When some more specific issues arise they can route customers to your experts. Outsourcing agents can also handle such outbound calls as order confirmations in e-commerce.

Handling calls during peak times. If your in-house call center needs help in handling inbound or outbound calls during some peak times (holidays, promotion campaigns, etc) your company can use outsourcing for these periods. It may be cheaper than hiring and training additional agents.

Every company has its specific needs so the outlined situations may not suit you.  In this case, we recommend using the Outsourcing Decision Matrix. It can make your decision-making process a little bit easier. You can see it in the picture below.

Source: Mindtools

This matrix identifies the two factors that you should consider when deciding on outsourcing your business functions: strategic importance and contribution to operational performance. Four quadrants show what you should do with your tasks depending on these two factors:

Form a strategic alliance. A task is strategically important for you but its contribution to your operational performance is quite low. You can outsource it to a trusted partner.

Retain. You should retain this task in-house because it is not only strategically important but it also contributes to your operational performance a lot.

Outsource. This task has no strategic importance but is important for your operational performance. You can outsource it with a little risk.

Eliminate. The task doesn’t have any impact on your operational performance and is not strategically important. This activity can be removed completely.

As you can see, making a decision on a call center outsourcing can be quite difficult. As a rule, a general approach that companies take is that with the high average bill and more complex product or service having an in-house call center is more beneficial than outsourcing your tasks.

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