Call Center Outsourcing: Pros and Cons of Using a BPO for Your Call Center

By Veronica French
April 16, 2021

As the frontline for handling customer issues, customer service departments still rely on the phone as their main point of contact with customers. This has become even more important as the mass adoption of smartphones has dramatically increased consumer expectations for fast, effortless customer service over the phone.

A recent study found that 76% of all consumers prefer to reach customer service over the phone as their preferred channel of communication. And this trend isn’t going anywhere, with 92% of American millennials owning a smartphone.

But delivering high quality customer experiences can be costly. That’s why many call center leaders are looking to call center outsourcing services through business process outsourcing, or BPOs, to lower their call center costs and scale customer service operations

However, there are often hidden costs associated with outsourcing your call center and emerging technologies offer better alternatives. Let’s take a look at what business processing outsourcing is and whether it might be the right solution for you.

What is business process outsourcing?

Business process outsourcing (BPO) is the outsourcing of roles and responsibilities to a third-party service provider. It’s typically done as an attempt to reduce costs and increase efficiency or productivity.

Call center outsourcing is a type of business process outsourcing, and the most typical outsourced service is customer service over the phone. Most outsourced call centers handle inbound phone calls, often leveraging a low-wage workforce that allows them to reduce expenses.

Types of call center outsourcing services

There’s many different ways to categorize outsourced call centers. One way to look at them is whether they handle inbound or outbound calls. Another way is the type of service these BPOs and offshore call centers perform.

Inbound vs. outbound call center outsourcing

Inbound call center service providers answer incoming calls from customers. They can handle a variety of requests, such as updating account information, placing an order, or providing tech support.

Outbound call center service providers make outgoing calls. Outbound calls are typically used either to sell a product or service to consumers or conduct market research. Outbound agents can also qualify leads, proactively provide reminders, or place orders with third-parties.

BPO services offered

Classifying BPO providers by the type of service they offer is more specific than whether they handle inbound or outbound calls. Call center BPO companies offer a variety of services across many different industries. Here are just some of them:

Phone answering services
Technical support services
Order taking services
Reservation booking services
Appointment setting services
Claims processing services
Troubleshooting services

Pros and cons of using a call center BPO

Before making the investment into offshore call center outsourcing, it’s important to understand the pros and cons of outsourcing your customer support function to a third-party service provider.

Pros of outsourcing to a call center BPO

Lower costs – Instead of hiring agents locally, BPOs use low-wage labor to power call center operations — often in offshore locations.
Fewer staffing issues – The call center BPO takes care of staffing agents. This includes associated risks and workload, like paperwork, liabilities, and hiring costs.
24/7 support over the phone – BPOs located across different time zones allow companies to offer real-time phone support while local agents are off the clock.
Call center equipment procurement and management – BPOs provide call center hardware, like noise canceling headsets. They also provide call center software and tools, with features like analytics and call recording for easier monitoring.

Cons of outsourcing to a call center BPO

Less quality control – BPO call center agents aren’t employees of your company, so they often lack visibility into your company culture, values, and mission. As a result, they risk failing to accurately represent your brand to customers.
Poor company knowledge – BPOs often have high turnover rates. Agents are constantly being pulled from one account to another, which means BPOs are less invested in ensuring every agent knows your business inside and out.
High training workload – Even with BPOs, companies must still provide thorough customer service and company-specific training material, which can be time consuming and require frequent manual updates.
Wasted budget – It’s impossible to accurately predict call center demand. Call centers are often either overstaffed or understaffed, which means that at some point, you’re bound to pay bloated BPO costs for unused agent capacity.
Bad customer experience – Most customers immediately recognize when they are being serviced by an offshore BPO, given the impersonal and scripted nature of interactions with BPO agents. This can be a problem when customers are becoming ever more demanding of brands and the customer service they receive, making it a costly decision to bet on when you risk customer churn.
Security risks – Security and data protection are a growing concern. BPOs have recently become the target of security incidents, costing companies monetary losses, reputation damage, and even legal repercussions.

An alternative to call center BPOs: Why brands choose conversational AI instead

Conversational AI technology has significantly advanced in recent years. Voice AI today is sophisticated enough to have natural conversations over the phone to fully resolve customer issues at scale for enterprise businesses.

Businesses across industries, including insurance, retail, hospitality, and financial services, are overlooking BPOs and leveraging conversational AI to power customer conversations instead. Here are the top reasons why companies are making the switch:

AI is cheaper than a highly optimized call center BPO

With conversational AI, you never have agents sitting idle while the clock is ticking and you’re paying for it. When your business receives hundreds of thousands of customer support calls a day, idle minutes and even seconds can add up very quickly.

The beauty of voice AI technology is that you only pay for what you use. You can meet inbound demand head-on and never pay for a single second the AI is not on the phone. Call centers have reduced 50% of their costs through conversational AI, while also delivering more efficient and effective customer service.

Conversational AI provides a superior customer experience

Voice AI technology enables brands to offer fast, personalized, and 24/7 customer service over the phone. With voice AI, you’re never waiting on agent availability, so hold times are eliminated. As opposed to live agents, AI is available around the clock and ready to handle high call volumes any time of day.

Call centers report higher resolution rates and faster resolution times as voice AI technology gets smarter with every customer issue it resolves. Now, your most important customer conversations can improve without needing to manually update call scripts or train new agents.

Higher agent engagement and satisfaction

Adopters of conversational AI actually cite improvements to their agent experience. Conversational AI resolves transactional Tier-1 customer service issues, which leaves call center agents with more time to focus on customer issues that require human empathy and ingenuity. Call center agents feel more engaged and empowered when they resolve these types of customer issues instead.

Voice AI technologies can also automate front-office and back-office work, like caller authentication and tagging call dispositions, which frees up agents to focus on more productive work. All of these improvements to the agent experience reduce the risk of agent fatigue and employee churn, positively impacting your call center.

Increased security and compliance

Conversational AI platforms sit on top of existing contact center and CRM technologies, and often incorporate security and data privacy best practices that are on par with major contact center technology providers. With BPOs, on the other hand, common cybersecurity threats like data breaches or hacking are a higher risk and out of the purview or control of the companies that employ them.

Enterprise conversational AI platforms are often fully compliant with current data protection regulations at the state and federal level. They employ world-class physical security controls to protect and store sensitive customer data.

Advanced call center analytics and insights

With conversational AI technology, data collection and analysis is completely automated. Real-time conversation transcription, conversation disposition tagging, and contact center and CRM integrations make it effortless to capture and automatically log call data for better insights into your customers.

Call center managers and business leaders gain access to key business metrics and visibility into every call, empowering them to deliver better customer service and make more informed decisions off of rich customer data.