In-House vs. Outsourced Customer Support: What's Better
Blog Post

The Competition Between In-House and Outsourced Customer Support: Which One Wins?

The timeless debates about in-house vs. outsourced customer service divide the business world. More and more companies are still determining customer service outsourcing cost and whether to hire internal staff or choose an outer provider to handle all the processes.

When you outsource, you are no longer limited by technology constraints or a scarce pool of talents available at the moment. You can deal with a few software outsourcing partners proficient in exactly what you need to build or maintain the solution. ─ CEO of Intellectsoft, the technology partner of Fortune 500 organizations.

Before making the final decision about the call center in-house vs. outsourcing, it is essential to consider some aspects of both options. Here, we will review in-house vs. outsourcing pros and cons and ways to estimate implementation costs.

customer support coworkers

The Origins of In-House Customer Service

In-house customer support means the team is an internal business part, works in the same environment as other departments, or communicates online with colleagues. The supervisor hires agents and can monitor their performance directly. 

In-House Support Pros:

  1. Deep company knowledge. The internal agents work solely for your business, so they know all service and product peculiarities. Reviewing in-house vs. outsourced customer service, the internal team knows the company’s communication deeper to provide timely feedback to customers’ inquiries. It also creates personal touch when interacting with customers and allows agents to promote brand image as a special one. 
  2. Immediate feedback. The in-house team usually communicates customer feedback consistently and faster. It helps improve the product or service instantly and increases client satisfaction. Close interaction with the agents makes passing on new guidelines essential for fast-changing businesses easier.

In-House Support Cons: 

  1. High cost. Working with the in-house team requires significant resources on hiring processes, training, and employee perks. Unlike the outsourcing center, internal staff requires regular meetings and coaching sessions to maintain employee engagement and expand communication strategies.
  2. Staff turnover issue. Considering in-house vs. outsourcing teams, the in-house one lacks business flexibility because, e.g., retailers or travel agencies depend on seasonal work peaks. For example, one of WOW’s 24-7 clients, a Walks travel agency, chose outsourcing customer support for more flexibility. When hiring an agent, a company offers a six-month contract, which is not a stable job opportunity for most applicants.
  3. Data protection. Conservative industries such as banking, insurance companies, and medical institutions choose the in-house option as data security is essential. However, the risk of leakage with modern and reliable outsourcing providers is minimal due to following international/local guidelines. 
customer service agents working in the office

Outsourcing Customer Support: Yes Or No?

When it comes to in house vs. outsource, more and more companies are choosing to outsource customer service support now. It means delegating client service operations to a third-party provider while controlling the workflow. It saves a lot of resources as it handles all the processes, from hiring agents to providing a detailed customer work review. 

Outsourcing Pros:

  1. Accessible and less expensive. There is a wide variety of outsourced customer support companies in Ukraine, the Philippines, India, and Malaysia, where most of the population speaks English. You can get a high-quality service for a lower price there. The agents are usually based in different time zones so that the customers can contact the support center around the clock. 
  2. Flexible workforce. You can smoothly increase or reduce the amount of staff based on the season or project requirements without managing the hiring process. 
  3. Time-saver. Outsourced customer support saves time and takes client service responsibility off your shoulders. You can spend your spare time brainstorming business development methods and revenue-generating strategies while the outsourced customer support team handles all the raising issues.

Outsourcing Cons:

  1. Partial staff supervision. If outsourced service is a new concept in your business, managing staff at a distance may take a lot of work. Initially, there may be a lack of interaction with the agents, leading to trust issues. Therefore, the contact center provider should follow all the company requirements.
  2. Online communication. Outsourced customer service agents are usually based worldwide, so there may be communication difficulties due to cultural peculiarities and language barriers. However, having the English language as a versatile asset usually eliminates all communication concerns. 

This approach suits fast-growing companies, depending on the seasons, and other businesses undergoing digital transformation or needing outsourced technical support.

What Does Call Center Outsourcing Cost Include? 

How much does it cost to outsource customer service? Let’s start by looking into what’s included in the cost of hiring an outsourced call center:

  • Recruitment costs + payments;
  • Onboarding and training;
  • Software license purchase;
  • Performance monitoring software;
  • Analytical tools;
  • Payments to support agents;
  • Costs of administrative processes;
  • Office rent and hardware supply (depends on the call center). 

The average cost of outsourcing customer service also depends on whether the call center is available for your business needs or whether a team of dedicated agents will be hired per your business requirements. In the latter case, an additional preparation phase is needed for recruiters to hire more customer service agents.

This recruitment activity can take two weeks to a month, and you must pay the recruiter for the time and number of call center agents hired. Also, outsourced call center costs may include administrative or other resources not available in the existing call center but required by your business.

Outsourced Call Center Pricing

The final call center cost depends on many factors:

  • The number of customers;
  • The number of communication channels provided;
  • The working schedule of customer service;
  • The number of people engaged in the process;
  • Other negotiated factors.

The call center outsourcing pricing models are flexible and depend on many factors. The easiest and fastest way to achieve your business goals is by defining a monthly amount you are willing to pay for call center solutions. 

How to Estimate Client Support Cost?

How much does customer support cost? There are more than ten approaches to calculating the cost of customer service operations. 

First, it depends on whether you want to pay hourly, daily, weekly, or monthly. Let’s consider sales per hour. Think about how much your staff generates per hour of work. Define the current rate and factors that might increase it, and estimate the possible income. Also, consider the factors listed below:

  • How much does the customer acquisition cost?
  • The physical costs of having an in-house.
  • Sales returns and average order value (AOV).

Wrapping Up

In-house customer support helps fill in the gaps in deep company knowledge and immediate feedback. However, the high cost and rapid staff turnover are the key disadvantages averting most companies from maintaining office-based agents. Meanwhile, outsourced customer support is more prevalent in fast-developing companies because of its accessibility, flexible workforce approach, and low cost. 

Have more questions about the outsourced customer service center? Book a call and discover its peculiarities.

Table of Contents
Let’s discuss your business model to find the best solution​