Business process outsourcing for customer service

Take an in-depth look at how business process outsourcing for customer service can be a viable option for organizations seeking to reduce expenses, empower internal staff, and expand their support capacity.

While customer service is undoubtedly essential for modern businesses, it’s often a time-consuming and resource-intensive undertaking. Toss in upfront investments in advanced technology and additional personnel, and providing quality, around-the-clock support involves both initial and ongoing costs that many small- or mid-sized companies simply can’t afford.

Enter business process outsourcing (BPO). Leveraging an external provider for your customer service needs can eliminate initial expenditures in technology, recruitment, and training, as your new partners should already have that covered. Rather than juggling marketing, sales, HR, and other initiatives, these specialists have only one objective in mind: helping your organization provide the most efficient and accurate customer support possible.

Today, we’ll dive into what BPO for customer service looks like, how to overcome any associated challenges, and how to choose the best provider for your unique business requirements.

What is business process outsourcing?

Business process outsourcing is a strategic practice where companies contract specific operational tasks to external service providers. These can range from customer service and human resources to information technology and administrative functions. By outsourcing these processes, businesses are able to reduce operational costs and access specialized skills and technologies. 

The primary goal of BPO is to enable organizations to focus on their core competencies while delegating non-core, but still essential, activities to experts.

Why should you consider BPO for customer service?

Companies can significantly reduce their operational expenses by contracting out customer support functions to regions with lower labor costs. Even better, this enhanced cost-efficiency doesn’t come at the expense of quality service. BPO providers invest heavily in training and technology to ensure their staff can consistently deliver excellent customer service. This allows organizations to maintain a high standard of service without the overhead costs associated with in-house teams.

Moreover, business process outsourcing typically offers enhanced flexibility, which is crucial for businesses experiencing fluctuating customer service demands. During peak seasons or promotional periods, customer support needs can spike, requiring additional resources to handle the increased volume of inquiries. BPO providers can quickly scale their operations up or down to adjust to these changes, ensuring that individuals always receive timely support regardless of demand fluctuations.

Benefits of business process outsourcing customer service

The benefits of contracting out customer support tasks will depend heavily on what services a provider is assisting your organization with. For instance, outsourcing sales and marketing support may result in faster response times and 24/7 availability, while outsourcing technical support can lead to reduced downtime and improved service quality.

Cost-effectiveness

In addition to the lower labor costs provided by business process outsourcing, organizations also enjoy a lower upfront investment in technology. BPO providers generally have already secured cutting-edge infrastructure to deliver superior services, which individual companies might find prohibitively expensive to acquire on their own. By leveraging a provider's existing technology and expertise, businesses benefit from the latest innovations without incurring significant capital expenditures.

BPO’s primary benefit is the cost savings that come with using BPO companies for the variety of core business cases you’re trying to support through your customer service activities. Inherently, this will be one of the easier benefits to identify and capture.

Increase talent pool

By partnering with BPO providers across various regions, organizations can tap into a global workforce offering a vast array of skills and expertise. This extended reach allows companies to leverage unique talents available in different markets, often gaining access to professionals with experience in specific domains that may be scarce in their local market.

Even more, these providers usually invest heavily in the development of their workforce in order to maintain high service standards. They typically emphasize building a skilled workforce adept in the latest technologies and best practices, ensuring that their employees are well-equipped to handle complex responsibilities.

Maintain focus on other areas

By outsourcing certain customer service tasks, businesses free up internal resources to focus on more high-value responsibilities. This allows internal workforces to dedicate their energy to strategic activities that drive growth and competitive advantage, such as product development and expanding market presence.

Flexibility

With business process outsourcing, organizations can easily scale their operations in response to evolving needs without the delays and costs associated with training and managing additional in-house staff. 

BPO providers are equipped to efficiently handle fluctuations in workload, enabling businesses to adapt quickly to seasonal demands or unexpected changes. This scalability ensures that companies are able to meet customer needs promptly, maintaining high levels of operational efficiency without requiring long-term commitments to additional infrastructure.

Reduce risk

Managing compliance and regulatory risks is another key benefit of utilizing BPO, as these efforts are less likely to be overlooked with a dedicated team overseeing them. BPO providers specialize in specific areas of operations, becoming experts in that particular domain as they invest heavily in training and compliance. In customer service, this specialization verifies that customer inquiries are responded to promptly and accurately, while always in compliance with relevant regulations.

Furthermore, business process outsourcing providers usually have comprehensive contingency plans in place to ensure uninterrupted service delivery in case of natural disasters or technical failures. By leveraging external disaster recovery and business continuity plans, companies can reduce the risks associated with operational downtime, ensuring sustained performance at all times.

24/7 accessibility

BPO providers often operate in various regions around the world, enabling them to offer around-the-clock services. This means that while one team finishes its workday, another team in a different time zone can take over, verifying continuous operations. For organizations, this translates to faster response times and the ability to handle urgent tasks at any time of the day or night.

In addition, think about your omnichannel solution with the 24/7 concept. Are you providing support via social media? A 24/7 contact center? BPO call centers can be a great way to outsource a 24/7 support center. However, customer interactions can get more complex to support depending on the type of business that you run. Call center services and the BPO industry are quite vast. And the accessibility of finding a BPO partner for call center purposes can be quite easy to do.

Potential challenges of business process outsourcing customer service

Though BPO can significantly reduce operational costs and enhance efficiency, leveraging an external provider to handle customer support isn’t without its difficulties. Fortunately, most of these challenges can be overcome with clear communication, sufficient training, and robust monitoring mechanisms.

Training

Training can be difficult when utilizing BPO for customer service due to cultural and operational differences between the provider and the client company. One of the primary challenges is ensuring that the outsourced team fully understands an organization's offerings and brand values. This may be compounded by potential language barriers, which can hinder the effectiveness of training sessions and the overall consistency of the customer experience (CX).

To combat this issue, businesses should implement comprehensive training programs that include both initial and ongoing sessions. Utilizing a combination of virtual and in-person training can help bridge geographical gaps, ensuring that the outsourced team receives thorough and consistent instruction. Incorporating real-life scenarios and role-playing exercises serve to help the team better understand various customer support situations, promoting a deeper connection to the brand’s values.

Security

Verifying that data remains secure during transfer and storage is critical, as breaches can lead to both financial and reputational damage. Outsourcing to a BPO provider means that data handling extends beyond the internal controls of a company, making it essential to ensure that the provider adheres to robust security protocols. This includes safeguarding against unauthorized access and cyberattacks, which can be more difficult to monitor remotely.

Overcoming these potential difficulties necessitates partnering with a BPO provider that has a strong track record of data security and compliance with international standards. Organizations should always conduct their due diligence during the selection process to help assess providers’ security measures. It's also essential to include stringent service level agreements (SLAs) in the contract, specifying the provider’s responsibilities and the consequences of non-compliance.

Communications across teams

Due to differences in time zones and cultural nuances, some businesses may find communication to be challenging when utilizing BPO for customer service. Time zone variations can make it difficult to schedule meetings and ensure timely responses, while cultural differences may affect interaction patterns. Additionally, without seamless collaboration, aligning the outsourced team's operations with the company’s standards can become problematic, potentially impacting the quality of customer service.

Thus, it’s paramount to establish clear communication protocols from the outset. Implementing standardized tools, like instant messaging and project management software, can facilitate real-time collaboration, ensuring that all team members are on the same page. Scheduling regular check-ins that accommodate different time zones can also help maintain alignment and address any issues promptly.

Agent productivity

Outsourced agents may not initially possess the same level of product knowledge or understanding of a company’s customer service standards as in-house staff. This gap has the potential to lead to longer resolution times and inconsistent CXs. Moreover, varying management styles can affect the engagement of outsourced agents, making it difficult to maintain high-performance levels.

To alleviate these concerns, it’s vital to implement comprehensive and continuous training programs that cover a business’s offerings and support expectations. This should include not only initial onboarding, but also regular refreshers to keep agents informed about new products and policies. In addition to interactive and practical training methods, providing access to a robust knowledge base can further support representatives in delivering accurate and efficient service.

How to choose a BPO customer service provider?

With so many BPO providers offering their services for a variety of different specialties, how do you know which is best for your organization? We recommend starting by evaluating your own business needs and then researching reputable providers whose features and capabilities align with your identified requirements.

Assess your business needs

Begin by identifying the specific support functions you wish to outsource and the level of support required. Consider factors such as the volume of customer inquiries, the complexity of issues, and any language requirements. Then, assess your current operations to identify pain points and areas for improvement that outsourcing can address. 

Once you have a clear understanding of your business needs, define your priorities for contracting a BPO provider. You’ll need to determine the level of support required, which typically includes instituting SLAs and establishing key performance indicators (KPIs). Factors such as budget constraints and return on investment (ROI) potential should also be evaluated to verify that outsourcing aligns with your broader financial goals.

Do your research

Businesses should first compile a list of potential providers through online searches, client testimonials, and industry associations. Gauge each provider based on their industry experience and reputation, looking for one with a proven track record of delivering high-quality service.

Next, assess potential providers’ range of services, such as call center support, chat support, and technical assistance. Don’t forget to vet their quality assurance processes and data security measures to verify that they align with your standards. Depending on your needs, you may also want to inquire about advanced technologies such as AI and customer relationship management (CRM) systems to ensure that providers are capable of meeting your customer service expectations.

Ask for referrals

Referrals from industry peers or trusted partners offer firsthand accounts of their experiences working with specific BPO providers. By soliciting referrals, businesses can tap into the collective knowledge of their network to identify potential providers that have a solid reputation for meeting SLAs.

These referrals can also facilitate a more streamlined selection process by narrowing down the list of potential providers to those with a proven record of success. Rather than starting from scratch with online searches, organizations can focus their efforts on vetting providers who come highly recommended by trusted sources.

Consider location and potential language barrier

The geographical location of a BPO provider can impact various aspects of service delivery, including time zone differences, cultural nuances, and regulatory compliance. Opting for a provider located in a similar or overlapping time zone can facilitate real-time communication and collaboration, enabling faster response times and improved customer satisfaction.

Additionally, language barriers have the potential to significantly impact the quality of customer support, especially in multilingual markets. Choosing a BPO provider with proficiency in the languages spoken by your target audience is essential to ensure effective communication. This necessitates not only fluency in the preferred dialect, but also cultural sensitivity to address regional expectations.

Evaluate available tools

BPO providers usually offer access to specialized tools like CRM software, ticketing systems, knowledge management platforms, and more. By assessing the technologies that providers utilize, a company can gain insights into potential partners’ capacity to handle the unique demands of their customer service initiatives.

Moreover, different industries may have specific needs when it comes to customer support technologies. For example, regulated industries such as finance or healthcare may require additional security measures in their tools. By assessing the toolset of potential BPO providers, businesses can verify that they possess the necessary features and integrations to meet their particular requirements.

Assess service quality

By evaluating the service quality of potential BPO providers, organizations can ensure they’re partnering with a provider that aligns with their brand values and customer service standards. This usually necessitates examining factors such as average response times, first-call resolution rates, and quality assurance processes.

Selecting a BPO provider that consistently delivers high-quality service is also essential for both acquiring new customers and retaining existing ones. Assessing service quality metrics and performance indicators allows organizations to identify providers with a reputation for meeting or exceeding customer expectations.

Best practices for optimizing BPO customer service

It’s crucial for BPO providers and their clients to work together to establish a set of best practices that ensure both parties’ continued satisfaction with the partnership. These practices will vary depending on the expectations of each unique client, but in general, verifying scalability, consistent improvement, and SLA adherence are key factors in securing renewal once a contract expires.

1. Align costs with revenues

Firstly, it’s essential to establish a clear understanding of the cost structure associated with BPO services. This includes direct costs such as salaries and training, as well as indirect costs like management overhead and infrastructure maintenance. By creating a detailed budget that outlines these expenses, companies can better manage their financial commitments.

Additionally, businesses should strive to negotiate the most favorable terms possible when drawing up a contract. For example, performance-based pricing models align expenses with the quality and volume of customer service delivered. This ensures that costs directly correlate with service levels, helping to maintain a balanced financial approach.

2. Be agile

Remaining agile when leveraging a BPO provider necessitates establishing agreements that allow for scalability in response to changing business needs. Contracts should include provisions for adding or removing services and modifying performance metrics without extensive renegotiation. This flexibility is crucial for adapting to market fluctuations and unexpected changes in customer behavior. 

Moreover, maintaining open communication with a BPO provider is critical in order to promote adaptability. Regular meetings, transparent reporting, and a collaborative approach to problem-solving help ensure that both parties can respond swiftly to any changes in strategy.

3. Ruthlessly pursue efficiency

Once a BPO provider has been selected, it’s important for organizations to implement robust performance monitoring measures. Establishing clear, quantifiable KPIs allows for precise assessment of efficiency across pertinent aspects of customer service. Regular performance reviews should also be conducted to identify bottlenecks and areas for improvement. 

Additionally, advanced technologies such as AI and predictive analytics can significantly reduce manual workload and enhance service speed. By verifying that providers possess the latest technological solutions, companies can ensure consistent efficiency gains in their outsourced customer service operations, leading to always-improving service delivery.

4. Keep a laser focus on the SLA

Keeping track of SLAs begins with clearly defining and documenting promises made during the contract negotiation phase. SLAs should outline specific, measurable performance criteria; common metrics considered include response time, resolution time, and first-call resolution rates. 

It’s essential to ensure that these KPIs align with a company's overarching objectives and customer service goals. If a business adjusts its customer support approach between contracts, it’s important to remember to renegotiate upon renewal to verify that new SLAs reflect these changes.

5. Don’t forget the people dimension

It’s paramount that BPO providers invest in robust onboarding and ongoing training to ensure that their employees can continuously meet client expectations. When extensive educational opportunities are provided, employees gain the knowledge and skills necessary to handle a wide range of customer inquiries effectively. Furthermore, BPOs should always collaborate with their clients to gather business-specific training materials, ensuring that agents are knowledgeable in each company’s products, services, and policies.

Another core component of empowering employees involves creating a supportive work environment that boosts morale and enhances productivity. Business process outsourcing providers should prioritize staff well-being through initiatives that promote work-life balance, such as flexible working hours and remote work options. Recognizing and rewarding employee achievements, whether through financial incentives or public recognition, can also serve to provide motivation and encourage high performance.

6. Automate as much as possible

AI-driven chatbots and virtual assistants can handle a significant volume of support inquiries, such as answering FAQs and guiding customers through basic troubleshooting steps. These automated solutions are available around the clock, freeing up human agents to focus on more value-added interactions.

Even more, leveraging reporting and analytics can help identify common customer issues and peak interaction times, enabling BPO providers to prepare for high-demand periods. For instance, machine learning algorithms can analyze historical data to improve the routing of customer inquiries to the most suitable agents. Predictive analytics can also be utilized to anticipate customer needs, allowing proactive service measures that can prevent issues before they arise.

7. Choose the right WFM application

A suitable workforce management (WFM) application enables accurate scheduling, verifying that the right agents are available at the right times. This minimizes instances of overstaffing and understaffing, reducing labor costs and preventing SLA breaches. Accurate scheduling assists in managing peak periods as well, ensuring that customer wait times are minimized no matter the volume of interactions being experienced.

Advanced WFM systems also offer features like automated shift scheduling and self-service portals where staff can manage their schedules and request time off. These features provide employees with greater control over their work-life balance, reducing stress and increasing overall job satisfaction.