A Complete Guide to Outsourcing Customer Service

17 Jul 2023 By: Michael Kansky


Maintaining service quality, especially during customer issues with your products, is key to strong customer relationships. Even with ISO 27001 certification and strong marketing, poor customer service can ruin your success. Solid customer service is essential for customer satisfaction and loyalty.

Cutting costs without losing quality in your customer service operation is crucial for effective businesses. In this guide, you’ll discover the advantages, challenges, and best practices of outsourcing customer service, including the cost of outsourcing and how to utilize the best call center software.

Key Takeaways

Strong customer service is key to keeping customer satisfaction and loyalty.
Outsourcing customer service can address many companies’ customer support needs by providing access to top customer service talent and the best call center software.
Outsourcing can reduce costs while maintaining quality, especially when partnering with skilled customer service outsourcing companies.
Digitalization and globalization are making customer service outsourcing more popular.
Best practices for outsourcing customer service involve setting clear goals, building a robust framework, researching top locations, selecting the right provider, defining expectations, managing training, promoting inclusivity, maintaining communication, assessing performance, providing incentives, and monitoring success.

Customer Service Outsourcing

Outsourcing, in general, is becoming more popular today because of how digitalization has broken cultural barriers, illustrating both the pros and cons of outsourcing, including for customer service companies. Many businesses now use the internet for operations, leading to considering outsourcing for top customer service support. Offshore outsourcing is a strategic approach that comes with its pros and cons, especially in the realm of customer service where the impact on customer retention is significant.. In the US, 66% of companies outsource at least one department. (We’ll talk about it later!)

What does outsourcing really mean, especially in customer service, and how can it contribute to addressing great customer needs?

Outsourcing means hiring a third-party organization to handle tasks, such as managing a contact center or outsourced call center services. Basically, you employ them to do the work for you—for this instance, customer service. And as you may already know, this setup has benefits and setbacks, highlighting the need to carefully weigh the pros and cons of outsourcing customer service. Below are a few.

Advantages of Outsourcing Customer Service

Below are the advantages of outsourcing.

Access to Highly Trained Individuals

Outsourcing companies have their own set of specialized training to ensure that employees, particularly customer service agents, have the high skill sets needed for any job. And sometimes, they’re even better than local workers. You can add skilled individuals just by outsourcing your customer service, meeting the demand for great customer service and reducing the overall cost of outsourcing.


One major benefit of outsourcing is its cost-efficiency, which aligns with the cost of outsourcing and utilizing great customer service techniques. You won’t need to pay a premium for the same expertise your local workers possess and have the same if not better customer service tickets resolution rates.

Time-Zone Advantages 

Due to time differences in other countries, you can make your customer service available 24/7 through live chat options to respond to customer inquiries promptly. As a result, your customers can reach you anytime they have questions or other concerns. This will result in higher customer satisfaction, given that you address any problems as quickly as possible.


Outsourcing customer service can also help you scale faster because there’ll be no need for increasing the size of your in-house customer service team only to accommodate growth, thereby ensuring the capacity to provide customer support at scale. You know how expensive it can be to grow a team with local workers. Hence, outsourcing can leave you with more resources for your growth strategy and improve customer loyalty.

Disadvantages of Outsourcing Customer Service

Language Barrier 

When outsourcing—especially in Asian countries, it’s given that English may not be their first language. This causes some miscommunication that results in unsatisfied customers, highlighting the need for companies to consider outsourcing to providers that ensure great customer service. 

Lack of Control 

Another disadvantage of outsourcing, considering that you’re handing the task to the customer service provider, is that you’ll have less control over their agents and operations and therefore less influence on KPIs. Hence, it would be best to keep in touch and regularly hold meetings for updates and other concerns.

Data security concerns

Another concern with outsourcing is data security, particularly when it involves customer service outsourcing companies and their access to sensitive information. As part of customer service, collecting and managing client information is crucial, and using a customer relationship management system can be a great solution. When you outsource this function, you’re also giving a third-party agency access to sensitive data. This could be a significant risk if the agency lacks a strong security strategy, especially for customer service companies.

Why Outsource? 

Looking at the pros and cons, we can say that customer service outsourcing can really bring a great deal of change to your business. As you know, customer service is very complex, and engaging with the best customer service outsourcing companies can enhance customer retention and meet evolving customer service needs. From live chat/call to email support to telemarketing, it requires skilled individuals to do all these things. And given that digitalization has brought a wide range of lead pools, it’s only best to take advantage of it and outsource to the best customer support agents around the world. Let’s take a look at some helpful tips that you should take note of as you start outsourcing to ensure it benefits your small businesses and is aligned with your products and services, aiming for great customer experience.

10 Best Practices to Follow When Outsourcing

Always aim for the best customer service experience.

Establish Clear Goals 

It’s very important to establish clear goals because these are what will drive the success of your outsourcing. Take time to ask yourself and your team a series of questions about why you need to outsource to enhance customer support and how it aligns with addressing customer needs. Is it because of overwhelming queries that your team can’t handle anymore, indicating a need for an outsourcing service specialized in call center service? Or is it because you have to focus on certain aspects of the business that you have no time to be hands-on with customer service inbound and outbound calls? By answering those types of questions, you begin to set your goals in outsourcing your business process.

Develop a Solid Customer Service Framework 

Customer service (CS) is complex and essential for maintaining great customer experience and loyalty. It’s not only answering queries. Your CS teams handle specific departments, like billing, marketing, and general inquiries. Hence, if the reason for your outsourcing focuses on the general inquiries department, you must create a comprehensive set of operational procedures for that.

It should include a detailed breakdown of customer service costs, processes, roles, and responsibilities to ensure excellent customer service. The ultimate goal of creating a solid customer service framework is to ensure that customers receive consistent, high-quality customer service experiences when they interact with people you hire from the other side of the world.


The next step would be researching the best outsourcing locations based on your needs. There’s literally a world of options for offshoring, and each of them specializes in certain operations, including chat support and other customer service outsourcing tasks, aimed at enhancing customer engagement. For instance, India is known for its IT processes and efficient customer service agents, making it a preferred destination for business process outsourcing. And when it comes to customer service, the Philippines is known for being the inbound call center capital of the world. You must then narrow your search for the outsourcing company that excels in call center services.

Choose the Right Customer Service Provider 

Choosing the right provider is crucial because there’s a report Research indicates that 54% of an organization’s breaches come from third-party contact centers, underscoring the need to choose reliable customer service companies. You must then be careful about who you trust with your sensitive data, ensuring that the outsource customer support maintains a positive customer experience, handles customer queries efficiently, and incorporates the best call center software. Try to look for companies with a good reputation in customer service. Besides browsing the internet for reviews, you may try to reach potential partners’ customer service teams to evaluate their proficiency in managing chat support and other services. That way, by evaluating their customer care protocols, you can gauge their skills and how they operate in customer support outsourcing, ensuring your customer service needs are met.

Set Expectations 

It’s important to set expectations with the outsourcing partner you connect with to ensure success. Whatever the focus of your customer service—may it be to cut down the cost or lower response time, make sure to communicate it with them clearly. Then ask for their input on how they’re going to help you meet those goals.

Take Control of Their Training 

Only you know how your business operates. You must then take full control of the training of your outsource team. Ensure they understand everything about your company, their responsibilities, and the technical aspects of their job. 

Be Inclusive 

With all these going on, you have to make sure to be inclusive in building a diverse customer support team, considering the dynamics of business process outsourcing. Since you’re hiring from various cultures, it’s very important to acknowledge and celebrate that, which is a significant aspect of business process outsourcing and a pros of outsourcing. Beyond everything, always show respect. Encourage feedback and open communication to know how you can improve the processes better to help them be at their best.

Communicate Regularly 

It doesn’t end with keeping an open-door policy for concerns but extends to actively engaging with customer queries and feedback. You also have to communicate with your providers regularly to check up on the outsourced support team, ensuring their strategies align with optimal customer retention practices. Get to know the issues that the customer service reps are experiencing. That way, you’ll be able to resolve everything properly.

Measure Customer Service Performance 

In those discussions, take a look at how the customer service team works. Measure their performance through various metrics like customer surveys, average handling time, resolved concerns, dropped calls, and more. Doing this can help you understand better about the situation.

Offer Incentives

You may also consider giving out incentives to those reaching or exceeding your metrics as a token of appreciation. It will give them the motivation to work better.

Tracking Success

It’s very important to monitor the outcomes of outsourcing customer service to see how your business should move forward with the setup. Use analytics and see whether they reach your business goals or not and if the current strategies are working. Take a close look at the number of positive/negative feedback, conversions, wait times, return (win-back) customers, and overall customer loyalty. These will help you to come up with more effective strategies. Or better yet, understand whether the whole outsourcing idea works on your business.

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Outsourcing customer service helps businesses cut costs without sacrificing quality, allowing them to scale and improve customer satisfaction. This practice involves using external companies to handle customer interactions, offering advantages like access to skilled professionals, 24/7 service, and cost savings, particularly when outsourcing to countries with lower labor costs. However, challenges such as language barriers and less control over operations can affect the quality of service. Best practices for effective outsourcing include setting clear goals, choosing the right provider, defining expectations, and maintaining strong communication and performance assessments. These strategies ensure that outsourcing contributes positively to customer relationships and business growth.


Outsourcing has its pros and cons. By grasping these aspects and applying best practices, your business can foster enduring customer relationships and achieve the growth you desire.

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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/