How much will it cost to outsource your customer services – and is it worth it?

Share This Post

If you have an over-stretched or rapidly-growing customer service team, you might have already considered outsourcing.

But just how much does it cost to outsource some or all of your customer services to a UK-based provider?

More importantly, what value is your outsourcing investment likely to return to your business?

Here we outline the key areas that are likely to influence the price, along with the benefits you might expect to see from outsourcing your customer services.

Pricing Factor 1: Number of expected contacts

This is the number that will indicate the scale of your requirement, and have the greatest bearing on your outsourcing cost.

The more contacts per hour/day/week you expect, the more agents you’ll require. If you deal in large contact volumes this may drive some efficiencies of scale that are likely to be reflected in a more competitive ‘cost per contact’.

Pricing Factor 2: Complexity of contact

An agent handling customer service enquiries or offering technical support will require a higher skill level than an agent tackling simpler tasks, such as message taking or order processing.

Agents with a wider skillset will typically have undertaken more training, possess more experience, and be rewarded accordingly. The more skilled you require your outsourced agents to be, the higher your average cost per agent is likely to be.

Pricing Factor 3: Average contact length

Companies are usually attracted to outsourcing because it offers scalability, resilience, quality and a higher productivity rate. However, different client preferences can influence the time spent servicing customers.

For example, a company that prioritises cost savings may aim to limit the time agents devote to each enquiry. A different organisation that prioritises upselling or outstanding service is likely to accept that although contacts may last longer, they will result in happier or more profitable customers.

Pricing Factor 4: Availability

Outsourcing can make it easier for many brands to offer extended opening hours, weekend availability and even overnight support (particularly where they serve customers across multiple time zones).

Agents that support unsociable hours are typically rewarded with a more attractive rate of pay, which is likely to be reflected in the overall pricing of an outsourced service.

Pricing Factor 5: Channels offered

The service channels you require support for (eg. telephone, social media, webchat) are likely to influence the overall cost per contact you are quoted for two reasons.

Firstly, some channels can offer greater efficiencies. Webchat agents, for example, can usually handle multiple contacts at the same time – a luxury not shared by those handling telephone enquiries.

Secondly, different channels may have specific staffing requirements. Tackling social media complaints in real-time requires a different skillset to telephone customer services, which may be reflected in the overall cost.

Pricing Factor 6: Ongoing training needs

If the knowledge of your customer service agents needs to be continually updated (perhaps as a result of regular product/service changes), it’s likely they will require ongoing training. This will be factored into the price you pay.

Failing to provide appropriate training (regardless of whether you outsource or not) will have a detrimental impact on your overall service levels.

Pricing Factor 7: Contract length

If you see outsourcing as a long-term element of your customer service strategy, you could use this to your advantage with outsourced suppliers.

You may find that a longer term contract delivers a more competitive price than a short-term or rolling agreement.

What else should you consider?

Due to the range of variables involved (contact/call length, contact volumes, etc), it’s likely you will receive an estimate based around certain assumptions.

Built into this might be ‘fixed’ costs covering things like hardware, licencing, compliance, information security and other operational costs. When reviewing these, bear in mind that such ‘costs’ are likely to be reflected as ‘savings’ within your business (eg. using an outsourcer’s infrastructure means you can cut back on your own overheads).

It sounds expensive – so why bother outsourcing?

Well, the truth is, you’re likely to be absorbing most of these costs already. The process of outsourcing simply exposes these otherwise ‘invisible’ costs more clearly.

In addition, you’re likely to find that the benefits outweigh the costs of outsourcing. For example:

Benefit 1: Reliability

Outsourcing means you no longer have to worry about unplanned absence, holiday cover, or variable working hours. Your outsourced supplier will become responsible for ensuring your contact channels are covered at all times by well trained, effective agents.

Benefit 2: Flexibility

There are few things more frustrating than seeing your customer service team overstretched at your busiest times, and underutilised when you’re quiet. Outsourcing enables you to scale up resource when you really need it, and scale back when you don’t.

It means you can also be there for your customers when it’s most convenient for them (eg. evenings and weekends).

Benefit 3: Expertise

Outsourced customer service providers are true experts in their field, benefitting from a broad experience of best practice from a range of sectors. Utilising their support can help you improve your overall customer experience, which can help you convert, retain, and grow revenue from your customers.

Just as importantly, it allows your business to focus on its core competencies and growth strategy.

Benefit 4: Resourcing and performance management

What’s the true cost of hiring, training and motivating your customer service teams? Is your recruitment pool large enough? And how do you tackle poor performers that may be damaging your customer relationships?

Outsourcing passes all of these concerns to a service partner, who will take care of these issues for you.

Benefit 5: Security, compliance and best practice

Complying with new legislation or security standards can be daunting – and costly – when tackled on a case-by-case basis. Indeed the drive to become GDPR and PCI DSS compliant has already led many companies to seek external support.

Outsourced suppliers often offer enhanced compliance and security as standard, meaning your services will benefit from their ‘best practice’ approach.

It’s all about return on investment

While outsourcing some, or all, of your customer services will require commitment, there’s no doubt that the benefits could more than outweigh the potential investment.

Being able to scale your resource in line with demand not only makes financial sense, but it also means you’re more likely to be there when your customers try to reach you. And with access to highly skilled agents, wide-ranging expertise and a ‘best practice’ service offering, it’s likely your service offering will develop more quickly than if kept entirely in-house.

Subscribe to our newsletter

for exclusive industry trends and insights

More To Explore

Scroll to Top
Black Friday Exit Popup