Enterprises have traditionally viewed business process outsourcers as a less expensive alternative to providing customer service — though not necessarily better.
However, that’s an oversimplified view.
While BPOs can help an enterprise save costs, the biggest benefit of working with BPOs is that they have the specialized skills to help a company build and extend its brand.
The key is finding one that fits a particular business’ needs.
“A strong BPO gives a brand operating leverage,” Bryan DiGiorgio, founder and CEO of 1840 & Company, a BPO, told CX Dive in an email. “It can expand support coverage, add specialized talent, improve response times and scale capacity without the company having to build the entire recruiting, training, management and operational infrastructure internally.”
BPOs offer a range of services to their enterprise customers, everything from back office processes to customer care. For CX, BPO services often include inbound customer support, outbound calling, and assistance with tailoring or developing the end-to-end customer journey.
“A good BPO can tell you that the processes and the workflows that you're doing can [be] optimized — or that we can do it better, or we can do it differently,” said Victor Manzanera, founder of Scale Edge Group, an independent intelligence and advisory company for the outsourcing industry.
BPOs can offer this perspective because they have an authority arising from their scale — many serve hundreds or thousands of clients — and can see what has worked or what hasn’t.
For example, any given sporting goods retailer doesn’t necessarily know what their competitors are doing in their customer service operations. But, the BPO does. And while the BPO can’t share proprietary information across clients, they have developed their in-house knowledge and expertise from handling other retail customers.
“That’s when the BPO becomes really useful for you as a company because they can tell you why your return policy is overcomplicated or you have too many processes and your end customer is not going to be happy about it, and here’s what we would do,” Manzanera told CX Dive. “And it's not guessing because they know more than you.”
BPOs can lower CX costs
Beyond helping a brand build its presence and streamline its CX delivery, BPOs can help enterprises lower their cost to serve customers.
Building out the customer service function is expensive. It requires real estate for facilities, contracts, capital and operational investments, not to mention finding and hiring people.
“If a company needs 100 people to do customer support on their sales channel or on their website, then if you outsource it immediately it’s going to be cheaper for you,” Manzanera said. “In principle, it’s going to be cheaper to outsource because that's recruitment you don't need to do. Those are contracts you don't need to do yourself.”
Acquiring the human resources is a critical investment that includes everyone from agents, supervisors, coaches, managers, executives, to the IT employees to deploy and maintain the necessary software and hardware, along with the people who actually design the customer’s service journey and can modify how the journey flows over time. Implementing AI-powered solutions adds another level of complexity and cost.
BPOs also create cost efficiencies by staffing agents in regions where they can pay lower wages.
Picking a BPO
Brands should prioritize partnering with a BPO that has actual knowledge and expertise in their industry.
This due diligence step involves reviewing which BPOs play in which markets and then verifying their claims, Manzanera said.
It’s this step that can help an enterprise move from just finding a low-cost customer service provider to leveraging the BPO’s expertise to help them build their brand.
“The biggest mistake that companies are making today is they’re going out and saying, ‘I need 100 headcount with 90% CSAT for this rate.’ That’s the worst way to go out to the market, because then you get back what the majority gets,” Manzanera said. “You have to think ‘What is that I need that my company cannot solve today, and then find the right partner that's going to solve that problem for you.’”
BPOs also range in size, as measured by their employee base and revenue. Some are publicly traded; others are private.
A slew of BPOs provide CX services, from the smaller privately held Provalus, which employs 1,200 employees and operates on U.S. soil, to large publicly traded BPOs like Concentrix, which staffs about 455,000 people across 74 countries.
Working with a BPO shouldn’t just be about reducing the cost to serve customers. Instead, leaders should evaluate a BPO’s specialities and services to pick a partner that helps build and extend their brand — and where their voice will be heard.
“Evaluate where you’re going to fall as a client,” Manzanera said. “Will you be a small client out of a big pool or will you fall ‘above average’ and be an important client where they’ll actually pay attention to you.”
