What is Customer Service BPO?

07 Jun 2023 By: Michael Kansky


Today’s businesses must boost efficiency and improve customer satisfaction. Customer Service BPO (Business Process Outsourcing) is crucial here. Outsourcing customer service helps streamline operations and improve support. It lets companies focus on core tasks and growth, while experts handle customer interactions. Learn how Customer Service BPO can boost efficiency and customer loyalty in your business.

Expert Customer Service BPO Solutions for Your Business Growth

BPO involves outsourcing whole business functions to a third-party provider. Poor customer service can hurt a company’s success. Strong customer service is vital for building customer loyalty and business growth. It boosts satisfaction, meets expectations, and minimizes issues. Great customer service also helps retain staff, recoup customer acquisition costs, and strengthens brand loyalty.

A Bain & Co survey revealed that a 10 percent boost in customer retention could increase a company’s value by 30 percent. Clearly, companies that focus on customer service tend to succeed.

Customer Service BPO allows businesses to outsource their customer service operations to third-party providers. This can improve efficiency and customer satisfaction while allowing businesses to focus more on their core operations and strategic growth.
Companies should carefully consider their customer service outsourcing partner, looking at factors such as expertise, reputation, cultural compatibility, technological capabilities, and cost considerations. Using BPO successfully involves clear communication and goal-setting, along with regular monitoring and feedback.
Despite the advantages, BPO also has potential downsides, including public backlash, communication breakdowns, learning curves, loss of control, security breaches, and potential hidden costs. Businesses must thoroughly evaluate these factors and implement a systematic approach to managing outsourced services.
The main types of BPO are offshore (outsourcing to a distant country), nearshore (outsourcing to a nearby country), and onshore (domestic outsourcing). Businesses should choose the type that best suits their unique business needs and financial goals.
By choosing the right outsourcing partner and following best practices, companies can optimize their operations, enhance customer satisfaction, and drive sustainable business growth and success.
While Business Process Outsourcing (BPO) can offer significant benefits like cost reduction and efficiency, it also comes with potential drawbacks that businesses should consider. One key disadvantage includes potential communication breakdowns, which can lead to a siloed company structure and hinder effective teamwork. Hiring the right BPO partner, ensuring seamless communication, and creating a scalable plan can mitigate these risks and help businesses effectively leverage BPO strategies for success.

Business process outsourcing

Understanding Customer Service Outsourcing

Outsourcing customer service has benefits and risks. With the right elements, it can save money, boost revenue, lighten workloads, and give access to top technology. To ensure success, consider these customer service outsourcing channels:

  1. Call center outsourcing lets businesses focus on their core products and services. It provides more productive time for front office business operations like product development, marketing, and sales.
  2. Help desk outsourcing is a valuable service wherein a provider manages the resolution of user issues and technical issues concerning IT infrastructure and applications. This outsourcing solution offers several advantages to organizations, including the avoidance of staffing challenges, enhanced user satisfaction, and decreased support expenses.
  3. Social media outsourcing holds significance as well. Social Media Management focuses on providing quick responses and the number of people spending their spare time on various social media platforms.
  4. Live chat and email support boost the confidence of clients to do business with you knowing they can get immediate help if needed. They also help reach your target customers.
  5. Enhance communication with your customers using WhatsApp, Chatbot. Automate responses, manage inquiries with Kommo, and provide 24/7 assistance. Customize messages and collect data for exceptional customer service.

As reported by Forbes, achieving exemplary customer service begins with having core values and a clear mission to share with your customer service teams. 

Benefits of Customer Service Outsourcing

Outsourcing customer service provides key benefits like cost savings and better efficiency. It cuts overheads like infrastructure costs. Outsourcing firms often have advanced technology and systems, giving businesses access to superior tools without big investments.

Another advantage is scalability and flexibility. It helps companies adapt to changing customer demands. In high-demand seasons, providers can scale up quickly to handle more inquiries and offer fast support. In slower times, companies can scale down to save costs.

Outsourcing customer service improves the customer journey. It allows businesses to provide 24/7 support with dedicated, high-quality teams. Outsourcing companies often support multiple channels like phone, email, chat, and social media, letting customers pick their preferred method. These providers are skilled in resolving inquiries and complaints effectively, ensuring customer satisfaction.

Trending Now

An article from AZ Big Media recommends outsourcing customer service in 2024 to alleviate stress and enhance efficiency. Advising business owners to evaluate their existing customer service approach, pinpointing areas for improvement and outsourcing. Key steps include selecting a reliable call-handling service, setting a budget for cost control, and transparently discussing changes with existing staff. These measures help ensure a seamless transition to external customer service, enabling owners to concentrate on core business tasks while preserving robust customer relationships.

Types of BPO 

While BPO and customer service outsourcing both delegate processes to third-party agencies, BPO covers a wider range of functions beyond customer service, such as finance and HR. Customer service outsourcing focuses solely on customer support and related activities.

There are three main types of BPO:

  1. Nearshore outsourcing involves delegating processes to a nearby country, offering geographic proximity and cultural alignment. 
  2. Offshore outsourcing involves outsourcing to a distant country for cost savings and access to specialized skills. 
  3. Onshore outsourcing refers to domestic outsourcing, providing local expertise and control. 

Organizations should assess their specific needs and priorities to choose the best outsourcing approach. The decision hinges on factors like cost, expertise, and company requirements.

BPO Call Centers

A BPO call center is a central facility or outsourced service that manages a company’s phone-based customer interactions. It’s the main contact point for customers, offering support and resolving queries. Equipped with advanced technologies like phone systems and CRM software, these centers handle large volumes of calls efficiently.

BPO uses advanced technology to boost efficiency, accuracy, and customer service quality. With AI systems, modern CRM platforms, and communication tools, BPO providers streamline processes, cut errors, and offer quick, personalized responses. This tech aids data-driven decisions, offering businesses key analytics for strategic planning. Companies using BPO benefit from faster issue resolution, enhanced customer management, and better customer experiences. These technological advantages help reduce costs, increase efficiency, and improve customer satisfaction and loyalty.

Types and structures of BPO call centers

  1. Inbound Call Centers: These centers primarily manage incoming customer calls. They deal with questions, process orders, and address complaints. Inbound centers need agents who excel in customer service and problem-solving.
  2. Outbound Call Centers: These centers are dedicated to making outgoing calls to customers or potential leads. They are used for telemarketing, sales campaigns, customer surveys, scheduling appointments, and collecting debts. Agents in outbound centers need strong persuasive communication skills.
  3. Blended Call Centers: Blended centers handle both incoming and outgoing calls. This setup offers flexibility and efficient resource use. They are ideal for organizations experiencing fluctuating call volumes and diverse customer service demands.

Call Center Structures

Call center structures can vary based on location and organizational preferences:

  1. Onshore Call Centers: Onshore call centers are based in the same country as the company they serve. This setup reduces language and cultural barriers, aligns time zones, and can be cheaper than in-house operations.
  2. Offshore Call Centers: Offshore call centers are in a different country from the company they serve. They save costs through cheaper labor and access to global talent. Time zone differences allow for 24/7 customer service.
  3. Nearshore Call Centers: Nearshore call centers are in neighboring countries. They offer benefits like proximity, cultural similarity, and often lower costs than offshore centers. This setup allows for close collaboration and similar time zones, making outsourcing cost-effective.

BPO call centers are crucial for efficient customer service, no matter their type or location. They help businesses enhance customer satisfaction, streamline operations, and focus on core tasks by outsourcing to specialists. However, weighing the pros and cons is essential.

Disadvantages of BPO

Business Process Outsourcing (BPO) has become popular for streamlining operations and cutting costs. Despite its benefits, BPO has disadvantages that business owners must consider. If not managed well, these drawbacks can significantly affect businesses and their customers. Let’s explore some current disadvantages.

Public Backlash

Hiring full-time employees from other countries through outsourcing can hurt public and brand perception. Clients may see it as taking away domestic jobs and might link international outsourcing to lower-quality services or products.

Communication Breakdowns

If not managed well, BPO can cause a siloed company structure where divisions don’t share information. This can block information flow, hurting team performance. To prevent this, implement a scalable plan to ensure smooth communication between internal and outsourced teams.

A Learning Curve

Hiring a BPO company involves a learning curve in understanding the client’s operations and customer needs. This process can disrupt service quality, raising stakeholder concerns. It’s crucial to start outsourcing gradually and inquire how potential BPO providers will manage this transition.

Loss of Control

When functions are handled internally, managers ensure consistency and quality. Outsourcing means losing direct control over these aspects. It’s vital to choose a reputable BPO company and staff you can trust with your reputation. Interviewing their past clients can offer insights into their quality control and help establish a reliable partnership.

Security Breaches and IP Protection

Sharing IT system details with external vendors can lower security. Although often necessary, think carefully about the risks before partnering. Intellectual property or data breaches can cause serious damage. Regularly evaluate security risks, document security practices, and ensure vendors meet your standards.

Shared Reputational Risks

Businesses should thoroughly check the practices of potential BPO companies to protect their reputations. Including a commitment to ethical practices in contracts can help avoid mishaps.

Hidden Costs in Contractual Agreements

Signing contracts with BPO companies often involves detailed fine print and fees that can quickly add up, leading to unexpected costs. To avoid issues, review contracts thoroughly, ideally with legal help, to spot and address potential problems.

Factors to Consider When Choosing a Customer Service Outsourcing Partner

When choosing a customer service outsourcing partner, it is essential to consider various factors.

  1. Expertise and Experience: Check if the BPO company has relevant industry knowledge and experience. This greatly affects their understanding of your customers’ needs and their ability to provide effective support.
  2. Reputation and Track Record: Seek reviews, testimonials, and case studies to evaluate their performance and customer satisfaction. Choose a partner with dedicated agents and a proven track record for quality service to meet your expectations.
  3. Language and Cultural Compatibility: Ensure the outsourcing partner’s agents are fluent in your customers’ languages and culturally aware. This is crucial for providing a seamless and personalized customer experience.
  4. Technological Capabilities and Security Measures: Assess the partner’s technology, including CRM systems, communication tools, and data security protocols. They should have strong measures to protect customer information and ensure secure data handling.
  5. Cost Considerations and Contract Flexibility: Evaluate the outsourcing partner’s pricing models to see if they fit your budget and expected ROI. Also, check their contract for flexibility in scaling operations and adapting to changes or future expansions.

Considering these factors when choosing a customer service outsourcing partner will help you make an informed decision and select a partner that can effectively meet your business requirements and deliver exceptional customer service, states Forbes.

Best Practices for Successful Customer Service Outsourcing to a BPO

To establish successful customer service outsourcing, follow these best practices:

  1. Employ Effective Communication and Collaboration: Set up clear communication channels with the outsourcing provider and keep regular contact to quickly address any issues.
  2. Set Clear Goals and Expectations: Clearly define desired outcomes, performance metrics, and service-level agreements to align expectations between you and the outsourcing provider.
  3. Perform Continuous Monitoring and Quality Assurance: Set up mechanisms to regularly monitor outsourced customer service. Include reviewing call recordings, conducting customer satisfaction surveys, and performing quality checks.
  4. Conduct Regular Feedback and Performance Evaluations: Give constructive feedback to improve the outsourcing provider’s performance and maintain a strong relationship. Regularly evaluate and share insights to encourage continuous improvement.
  5. Build a Strong Partnership: Build a collaborative and trusting relationship with the outsourcing provider. Encourage open communication and work together to improve customer service strategies.

By following best practices, you’ll increase your outsourcing success and achieve your desired outcomes.

BPO Statistics, case studies, growth and trends

There are various data and statistics available that showcase the growth of the BPO industry, particularly in customer service:

  1. Market Growth: The BPO sector has expanded notably recently. A report by Grand View Research states that the global BPO market was worth 221.5 billion USD in 2019 and is predicted to grow at a CAGR of 8% from 2020 to 2027.
  2. Customer Service Outsourcing: According to Mordor Intelligence, the global customer service outsourcing market was valued at 84.1 billion USD in 2020 and is projected to reach 130.0 billion USD by 2025, growing at a CAGR of 9.1% from 2020 to 2025.
  3. Efficiency Gains: A Deloitte survey found that 59% of businesses who outsourced reported cost savings as their main benefit. This indicates that outsourcing customer service can help organizations cut overhead costs and streamline operations more efficiently.
  4. Customer Retention: Bain & Co reports that a 5% increase in customer retention can boost profits by 25 to 95%. Outsourcing customer service to enhance satisfaction can be a valuable strategy for a significant return on investment.
  5. Nearshore and Offshore Outsourcing: Global expansion has driven the popularity of nearshore and offshore outsourcing. The nearshore market is expected to reach about 35.35 billion USD by 2023, growing at an 11% CAGR from 2017 to 2023, according to Market Research Future. Additionally, Statista reported that the offshore services market was approximately 92.5 billion USD in 2019.

    These figures suggest that selecting the right BPO partner in customer service can significantly enhance a business’s performance and profitability. With the industry set to grow, companies considering BPO should think carefully about these benefits and trends.

    Effective outsourcing requires choosing partners carefully, maintaining clear communication, monitoring continuously, and providing feedback. Opt for a BPO partner that shares your values, knows your industry, and delivers a personalized customer service experience to maximize the benefits of this strategic approach.
  6. COVID-19 Impact: The pandemic increased businesses’ reliance on BPOs due to uncertainty and evolving customer behaviors. Lockdowns and travel restrictions hit traditional businesses hard, while online and digital services saw huge traffic increases. NTT Ltd reports that 70% of global organizations sped up their digital transformation due to the crisis. As firms adapt to a digital-first reality, the demand for outsourced customer service BPOs is expected to keep growing.
  7. Multichannel Support: Demand for multichannel customer service support is on the rise. Aberdeen Group found that companies with strong omnichannel engagement retain about 89% of their customers, versus 33% for those with weak engagement. BPOs are well-equipped to provide this kind of high-quality, multichannel support.

    These insights show that businesses considering BPO, especially for customer service, will find a robust market that can meet their specific needs and drive their success. Partnering with the right BPO can unlock growth, enhance customer loyalty, reduce costs, and help maintain a competitive edge.
  8. Flexibility and Scalability: BPO offers businesses significant flexibility, allowing them to quickly scale operations based on demand. A Deloitte survey notes that 47% of companies use outsourcing to manage capacity issues, highlighting its role in adapting to changing business needs.
  9. 24/7 Customer Service: The demand for continuous customer service is growing, and BPO enables 24/7 availability. Microsoft’s survey reveals that 36% of global consumers expect customer service teams to be accessible at all times.
  10. Customer Satisfaction: Outsourcing customer service can boost satisfaction levels. The Hackett Group reports that businesses using outsourced services not only enhance customer service but also cut costs by 26%.

Whether you’re launching a small business or you’re an experienced executive, considering BPO for customer service can be transformative. It frees up time to focus on core business tasks, boosts customer satisfaction, and drives growth.


Business process outsourcing (BPO) is a key strategy for growing businesses aiming to optimize operations and focus on core activities. By outsourcing administrative tasks, companies save time, reduce costs, and boost efficiency.

HelpSquad BPO makes your way to improving your customer service with our professional, bilingual agents, one step away. Bye-bye long waiting lines, hello efficiency, for a very low $8.50 per hour. Do not fail to take this chance to raise your level of customer service. Start your trial now and become one of thousands of successful companies enjoying HelpSquad’s expert virtual assistants and 24/7 customer service team.

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Michael Kansky

Michael Kansky, Founder of LiveHelpNow and HelpSquad, has leveraged his 20 years of industry experience and innovative support strategies to revolutionize customer service approaches, making LiveHelpNow a leading customer service software provider, and establishing HelpSquad as a bridge between businesses and customer needs. You may contact Michael on LinkedIn: https://www.linkedin.com/in/mkansky/