How to Reduce Call Center Overhead Costs with On-Demand Customer Care

Customer service outsourcing has become an increasingly popular strategy for businesses looking to reduce overhead costs and streamline their operations. Recent research conducted by Deloitte shows that outsourcing customer service can result in a 30-60% reduction in operational costs. 

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Contact center outsourcing can provide businesses with access to an experienced and skilled team of professionals for a fraction of the cost of hiring full-time staff. By outsourcing customer service, businesses can focus their resources on expanding their core services and marketing strategies while still providing high-quality customer support. With the potential for a positive return on investment (ROI), outsourcing customer service has become an attractive solution for countless businesses looking to increase their efficiency and bottom line.

Which Type of Businesses Can Benefit from Customer Care Outsourcing?

As a business owner or decision-maker, you know that customer service is central to your growth and development. However, with the challenges that come with running a business, providing extensive customer support can be difficult. That’s where customer care outsourcing comes in, providing a reliable solution for companies who want to focus on their core tasks while ensuring customers receive excellent care.

Here are 7 types of business that can benefit from Customer Care Outsourcing

Start-ups and small businesses:

Start-ups and small businesses often have limited resources, and hiring and training a dedicated customer service team can be expensive. By outsourcing their customer service, these businesses can save money and focus on other important aspects of their operations. Customer service outsourcing can also help these businesses scale up more quickly, as they can add or reduce the number of agents as needed.

E-commerce businesses:

E-commerce businesses operate 24/7, and customer service is a critical component of their operations. By outsourcing customer service, e-commerce businesses can ensure that their customers receive prompt and effective support, regardless of the time of day. Outsourcing also allows these businesses to expand their customer support capabilities to different languages and time zones.

Travel and hospitality industry:

The travel and hospitality industry, including airlines, hotels, and rental car companies, often have high call volumes and require multilingual support. Outsourcing customer service can help these businesses handle the volume of customer inquiries and provide support in multiple languages, without hiring and training a large in-house team.

Healthcare industry:

The healthcare industry, including hospitals, clinics, and insurance companies, often require specialized customer service support. Outsourcing customer service can help these businesses provide patients with prompt and accurate answers to their questions, schedule appointments, and process claims.

Financial services industry:

The financial services industry, including banks, credit unions, and investment firms, require customer service support to address inquiries related to account balances, transactions, and investments. Outsourcing customer service can help these businesses provide 24/7 support to customers, improve call wait times, and reduce the risk of fraud.

Technology companies:

Technology companies, including software, hardware, and telecommunications providers, often require specialized technical support to address customer inquiries. Outsourcing customer service can help these businesses provide customers with prompt and effective technical support, without requiring extensive training or hiring a large in-house team.

Retail businesses:

Retail businesses, including brick-and-mortar stores and online retailers, often require customer service support to address inquiries related to returns, refunds, and product inquiries. Outsourcing customer service can help these businesses handle high call volumes during peak seasons and provide 24/7 support to customers, regardless of their location or time zone.

Manufacturing companies:

Manufacturing companies often require customer service support to address inquiries related to product specifications, warranties, and repairs. Outsourcing customer service can help these businesses provide customers with prompt and accurate answers to their questions, without requiring extensive training or hiring a large in-house team.

Customer service outsourcing can benefit a wide range of businesses. By outaourcing, these businesses can reduce costs, improve efficiency, and provide high-quality customer support to their customers.

Cost-Benefits of Outsourcing Customer Service

For customer service leaders managing contact center operations, balancing quality customer care with increased volume can be an uphill battle. Fortunately, customer service outsourcing offers a cost-effective solution that delivers quality service to customers while reducing overhead costs. 

Here are 5 cost-benefits of customer service outsourcing:

• Reduction in Infrastructure Expenses

Outsourcing customer service eliminates the need for investing in expensive equipment, software, and maintenance costs. With outsourcing service providers, businesses can leverage the latest technology without investing in costly infrastructure.

1. Lower Employee Costs: 

Hiring, training, and retaining full-time employees can be expensive. With outsourcing, businesses can eliminate or reduce some of these costs, including recruitment, salary, training, and benefits packages.

• Operational Cost Savings

Customer service outsourcing can result in significant reductions in operational costs, such as rent, utilities, and office equipment.

• 24/7 Support

Outsourcing customer service enables businesses to provide round-the-clock customer support without incurring additional labor costs, overtime expenses, or resources.

• Scalability

Outsourcing your customer service operations enables your business to scale resources as needed without the expense of hiring new employees, training them, and investing in infrastructure.

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How Much Does Outsourcing a Contact Center or Call Center Cost?

When a business employs internal contact center agents, they are typically paid by the hour, which includes both productive and unproductive time. This also means that staffing, training, and management of employees, HR, and tech upgrades are also handled in-house. When a brand outsources its contact center support, the costs for these functions are managed by the outsource provider.

Outsourcing saves you time and money, as your partners manage everyday business needs so internal teams may focus on priority deliverables. And your company only pays for productive time. The average cost to outsource customer service is $2,600 – $3,400 per agent per month. This includes potential management fees and service fees, but doesn’t include factors like call volume, additional support channels (e.g., social, chat) or languages.

Is It Cheaper to Outsourcing a Customer Call Center or Keep it In House?

In-house customer call centers are generally costly to maintain, given the need for salaries, benefits, insurance, overhead costs, technology, and training. Glassdoor estimates the average customer service representative earns $33,648 per year, plus $5,000 in benefits. When you add in fully burdened costs such as taxes, recruiting, onboarding, training, and allocable costs like supervisory, IT, HR, and others, the average per-hour rate for customer service agents in the US is between $30- $40 per hour.

When outsourcing customer service, these costs are all-inclusive. You don’t have to worry about payroll taxes, personnel, absences, or downtime. If a small business only needs one to two representatives to handle their call volume, outsourcing is more economical than hiring and paying two full-time employees. Likewise, a larger company may lower costs and raise production levels with more outsourced agents, who resolve problems expeditiously or identify trends in customer issues.

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What Other Factors May Affect Outsourcing Call Center Pricing?

Aside from agent rates, there are other items to consider when calculating costs. Do you need 24/7 monitoring, multilingual agents, or omnichannel support? These variables affect the monthly price of your outsourced call center, and can fluctuate based on high-volume seasons in your business.

Other variables that will affect your final price include:

1. Unexpected Call Volume Spikes or Fluctuations

   • This may vary if managing seasonal sales spikes and downturns or launching new products or services. External factors (like delays caused by a pandemic) can play a role, and pricing may increase during surge times. You may need to adjust the number of agents on your program based on demand.

2. Duration of Calls

   • The call center you choose to best represent your business may charge by duration of calls. Depending on the nature of your customer service calls, they can be short or long. For example, helping someone reset their password may take 1-2 minutes, vs someone with a billing or shipping question which requires a little more time and research on the representatives’ end.

3. Levels of Support

   • Determine the type of work you’d like your call center agents to perform based on your business model. If highly skilled staffing is required, it may cost $50+ per agent per hour. Highly skilled staff requirements may include a need for multilingual agents, 24/7 service, problem solving, or persuasive speaking skills. Outsourcing partners will include additional support when calculating the costs (e.g., other necessary staff, managers, technical experts, etc.)

The Different Call Center Pricing Models

There are several models to choose from and choosing the right one is typically based on your needs and company size. Inbound call centers handle calls coming in from customers, often regarding order status or support with an app or website. Those models include:

1. Shared Pricing Model
   • Agents handle calls from more than one company. Typically, companies are charged per agent per minute, ranging from $0.40 to $0.90 per minute.
2. Dedicated Pricing Model
   • Agents handle calls for only one business. Their hourly rate is $8 to $30 per agent. Dedicated agents are best for companies who have a steady, predictable influx of calls as rates are separated from agent talk time.
3. Monthly Flat Rate Model
   • Rates for monthly services start at $100, while some outsource partners have an additional limit on monthly talk time.

At Outbound call centers, agents make calls to customers, ranging from sales opportunities to surveys and polls. Those models include:

1. Hourly agents are paid on an hourly basis.
2. Commission agents are paid by commission.
3. Hourly Plus Commission agents are paid both an hourly wage and commission based on specific standards of service levels.

Is Call Center Outsourcing the Answer for your Business?

Outsourcing your customer service support may save you considerably in the long run. With a dedicated team able to handle all your customers’ needs and with the know-how to resolve issues quickly, you are free to focus on other business goals. Now’s the time to see which type of outsourcing is right for you.