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Why are more and more businesses outsourcing their customer service?

Why are more and more businesses outsourcing their customer service?

Read time: 2 minutes

  • The value of business process outsourcing deals has climbed 66 per cent in the UK, of which customer service makes up the greatest proportion.
  • Globally, the market will continue to grow over the next four years and reach $110bn by 2024
  • Excellent customer service across all channels has become a commercial imperative for more businesses
  • Businesses are outsourcing not only to save money but to enhance their capabilities

According to the latest Arvato UK Outsourcing Index – our quarterly report analyzing the new outsourcing contracts procured across the UK – the total value of business process outsourcing (BPO) deals increased by 66 per cent year-on-year with customer service the biggest single outsourced function.

Research from Global Market Insights suggests that the UK isn’t the only region experiencing growth in its customer service industry. It found that the global outsourced customer service market is set to increase steadily over the next four years, with the market’s value surpassing $110 billion dollars by 2024.

The main driver for growth in the market is evolving consumer expectations. Delivering an excellent experience however customers choose to get in touch has become a commercial imperative for many businesses, and outsourcing to customer service experts offers an affordable way to access a much wider range of capabilities for a business.

Bringing in expertise

Both reports provide further evidence for a longstanding trend – that businesses no longer outsource services merely to reduce costs. Instead, most now do it to allow them to do things they wouldn’t have been able to previously. For example, integrating traditional and digital channels, such as establishing a web chat function or support for social media.

Setting up these capabilities internally involves significant investment of time and money to put in place the right IT infrastructure and software, and to employ and train a team of people to deliver the service to a high standard. This is even more complex for global organizations working across different time zones, cultures and languages.

Outsourcing reduces the up-front cost of establishing new capabilities and allows companies to tap into an existing pool of managerial, technology and deep vertical market expertise, which will likely increase the quality of the service delivered and deliver competitive advantage.

Working with an experienced third party also brings much greater flexibility. For example, it is now possible to scale up your customer service team in a matter of a few short weeks to be able to handle a large spike in enquiries that might come in following a product launch or to meet seasonal demands, and then take the teams offline again as soon as volumes die back down.

In a pre-outsourcing world, this kind of temporary employment could cause a host of headaches – finding the right talent, ensuring their availability, agreeing contracts of employment and training them for the job in hand – all potentially laborious processes.

The importance of customer service as a competitive differentiator continues to grow – according to our Customer 2027 report, eight in 10 customers said they would pay more for a better customer experience. As the expectations around how consumers interact with brands gets more complex, it’s easy to see why so many companies are choosing to call in the experts rather than attempt the DIY approach.

Read the latest Outsourcing Index here .

Author: Editorial team Future. Customer.

Tags for this article Customer Experience (88) Customer Service (98)

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