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Last updated on 2024年10月7日

How do you calculate cost savings from outsourcing customer service operations?

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Outsourcing customer service operations can be a strategic decision to reduce costs, improve efficiency, and enhance customer satisfaction. But how do you measure the actual savings from outsourcing? In this article, we will explain how to calculate the cost savings from outsourcing customer service operations using a simple formula and some key factors to consider.

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Constanta Lucia Luca

1 The cost savings formula

The basic formula to calculate the cost savings from outsourcing customer service operations is:

Cost savings = (In-house cost - Outsourced cost) / In-house cost x 100%

In-house cost is the total cost of running your own customer service team, including salaries, benefits, training, equipment, software, overhead, and other expenses. Outsourced cost is the total cost of hiring an external provider to handle your customer service needs, including fees, taxes, commissions, and any additional costs.

To use this formula, you need to have accurate and updated data on both your in-house and outsourced costs. You also need to compare the same scope and quality of service, such as the number of agents, hours of operation, channels of communication, and performance indicators.

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Constanta Lucia Luca
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Use AI tools and your dataset to calculate in real-time the cost savings and adjust fast accordingly. It also helps you collect the costs data itself, and clean and transform it to be accurate and always ready to use. All other factors like scope of service, quality of service, hours of operations communication channels and KPIs can be added as input into the AI tool to be compared and contribute the result. Cloud adoption is recommended as it is cheap and contains integrated services to collect, prepare analyze, provide insights, trends and prognosis, also monitor and secure your data seamlessly and in real time.

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2 The benefits of outsourcing

The cost savings formula can help you quantify the financial impact of outsourcing customer service operations, but it does not capture the full value of outsourcing. Outsourcing can also bring other advantages to your business, such as access to skilled and experienced agents who can manage complex and diverse customer inquiries, scalability and flexibility to adjust to changing customer demand and business needs, reduced risk and liability from compliance, security, and quality issues, increased customer satisfaction and loyalty from faster response times, personalized service, and multilingual support, as well as enhanced focus and innovation on your core competencies and strategic goals.

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Constanta Lucia Luca
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- Outsourcing reduces operational costs and provides scalability of the support team based on the needs. - Outsourced agents are very skilled and specialized, they know to use latest technologies, and improve the support quality leading to higher customer satisfaction and retention. - You have access to native language speaking agents workforce. - By combining outsourced agents with internal teammates, you upgrade your internal team members skills on the job. - You may also opt to move your internal team's focus to other activities than support. - You will not need to hire depending on seasonal spikes in agents demand.

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3 The challenges of outsourcing

When outsourcing customer service operations, you need to be aware of the potential challenges that may arise, such as a loss of control and visibility over processes and outcomes, communication and cultural barriers between your business and the provider, difficulty in maintaining consistency with your brand identity and values, a possible negative impact on internal staff morale and retention, and higher dependency and vulnerability to the provider's performance and reliability.

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Constanta Lucia Luca
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Outsourcing challenges refer to integration and onboarding and they may vary from not knowing the workflows and processes, integration with your systems, seamless coordination and communication, cultural, less direct control, performance monitoring, communication and cultural issues, language barriers and time zone issues, data security and privacy concerns, hidden costs and inaccurate costs estimates, quality consistency maintaining, prioritize quantity over quality, becoming dependent on outsourcing partner, challenging to switch providers or coming back to the internal team of agents. .

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4 The best practices for outsourcing

To ensure successful customer service operations outsourcing and reap the benefits of cost savings, it is important to follow some best practices. You should select a reputable and reliable provider that meets your business needs, expectations, and culture. Additionally, you need to define clear and measurable service level agreements (SLAs) and key performance indicators (KPIs) to monitor and evaluate the outsourcing provider's performance. Regular and effective communication and feedback channels should be established with the outsourcing provider and internal staff. Moreover, adequate training and support should be provided to both the outsourcing provider and internal staff to ensure quality and consistency. Lastly, your outsourcing strategy and contract should be reviewed and revised periodically to adapt to changing customer needs and business goals.

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5 The bottom line

Outsourcing customer service operations can be a cost-effective and beneficial solution for your business, but it requires careful planning, analysis, and management. By using the cost savings formula and following the best practices, you can make an informed and successful outsourcing decision that will improve your customer service operations and your bottom line.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you calculate cost savings from outsourcing customer service operations?

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1 The cost savings formula

2 The benefits of outsourcing

3 The challenges of outsourcing

4 The best practices for outsourcing

5 The bottom line

6 Here’s what else to consider

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How do you calculate cost savings from outsourcing customer service operations?

1

2

3

4

5

6

1 The cost savings formula

2 The benefits of outsourcing

3 The challenges of outsourcing

4 The best practices for outsourcing

5 The bottom line

6 Here’s what else to consider

Customer Support

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