Customer service business process outsourcers (BPOs or “outsourcers”) have similar goals and challenges to in-house operations—and some additional ones of their own. They’ve got to keep several plates spinning at all times such as:
- Operating their clients’ customer service operations to agreed standards more cheaply than they can do themselves while still making a profit
- Minimizing the churn of clients by consistently delivering against service level agreements and demonstrating this with effective reporting
- Winning new clients by submitting timely, competitive, and sustainable proposals
- Earning a reputation for delivering a service that is appropriate to the target client base: high quality of service, match of company culture and brand, low cost, or a combination
- Avoiding massive staff turnover levels, despite expecting extremely high levels of occupancy and multi-skilling from employees
Do they have a secret sauce that helps them to achieve that? We’ve identified some strategies that successful BPO customer service providers deploy to optimize customer service outsourcing in order to thrive in this highly competitive business environment.
1. Align costs with revenues
BPO customer service is characterized by volatile levels of business activity. Outsourcers don’t just have to contend with the seasonal variations that many in-house customer support operations face. An eternal truth for outsourcers is that client contracts come and go. When a client doesn’t renew and headcount reduces, BPOs can’t afford to pay for systems and software that lie idle. Equally, when a new client signs up or an existing client adds a new campaign, they don’t have to go through a lengthy procurement process and IT project.
For that reason, outsourcers were early adopters of cloud customer service technology. The cloud means rapid implementation, high system availability, and instant scalability. Of critical importance for outsourcers, cloud applications are often invoiced on a monthly pay-per-use basis. This means you only pay for the capacity you need instead of having expensive perpetual software licenses on the shelf. Pay-per-use means that costs are tightly aligned with revenues, with positive consequences for profitability.
2. Be agile
Like in the natural world, success in outsourced customer service is not about survival of the fittest, as measured by turnover, profits, or headcount. It’s about the survival of the most adaptable. Outsourcers need to be able to scale up quickly when new clients come on board. They can’t afford a long hiring process or heavy IT procurement projects every time. Setup costs need to be low, and implementation needs to be rapid.
Additionally, customer service BPOs need to be agile enough to scale down and reduce people and technology costs when the business enters a quiet period. Systems need to be flexible enough to cope with disparate client demands, and all the necessary integrations must be implemented without friction. Outsourcers need technology partners who are passionate experts with a shared sense of urgency and a can-do attitude and whose success is measured by their customers’ success.
3. Ruthlessly pursue efficiency
Organizations count on outsourcers to run their customer service operation more efficiently than they can themselves. They expect the BPOs to cope with peaks and troughs that they struggle to handle in-house. And they expect the outsourcer to do all that for less money than the cost of the in-house option.
It’s simplistic to assume that BPOs achieve efficiency by simply locating their centers offshore. Whether they operate offshore or onshore, outsourcers have a well-deserved reputation for challenging every expense. They demand excellent value for money from their suppliers.
With staffing costs typically accounting for over 80% of operating costs, they optimize agent schedules as much as possible, within the constraints of client contracts. Clients frequently cannot provide accurate forecasts of contact volume or average handling time (AHT), so they perform their own forecasting to stay ahead of the game. And when it comes to real-time management, they don’t rely on fire-fighting—they have a clearly defined plan to react, supported by powerful software.
4. Keep a laser focus on the SLA
Every contract between an outsourcer and client includes a service level agreement (SLA), which lays out the required grade of service, how this is measured, and the penalties for failing to achieve the target. Not hitting the service level goal doesn’t just cause some awkward conversations between customer service management, the planning team, and operations. It has real financial implications. And if underperformance becomes routine, the client is unlikely to renew the contract.
For that reason, customer service BPOs constantly monitor and control SL achievement. They also have well-defined tactics to ensure that it is achieved exactly as described in the contract. Equally, outsourcers are careful not to consistently exceed the grade of service specified in the SLA. Over-performance is the consequence of over-staffing, and that contradicts the efficiency imperative.
5. Don’t forget the people dimension
Every customer service operation has to balance three opposing forces: service level, operating cost, and agent satisfaction. This challenge is even greater in customer service BPOs than it is for in-house operations. In a competitive industry, minimizing costs is essential to make attractive pricing sustainable. Hitting customer service goals isn’t a nice-to-have, it’s business-critical.
The need for efficiency leads BPOs to strive for maximum productivity from employees. That productivity is commonly enabled by multi-skilling and skills-based routing, which lead to high levels of agent occupancy. Well-run outsourcers achieve a high but sustainable level of occupancy without agent burnout. Clients certainly need to be confident that their BPO partner is covering all the bases when it comes to employee experience. Another critical component of that is good planning practice.
- Accurate forecasting avoids unexpected spikes.
- Deliberate and consistent occupancy goals minimize burnout.
- Optimized scheduling consistently matches the supply of agents with demand, reducing stress and attrition.
- Engaging and empowering agents with self-service via their smartphones empowers agents to manage their work/life balance.
6. Automate as much as possible
Running a customer service BPO can be labor-intensive. The need to control cost drives outsourcers to constantly seek ways to eliminate manual effort from as many processes as possible. Automation may take many forms, including—
- ‘Bots’ dealing with level 0 or level 1 customer inquiries.
- Speech analytics to automatically find calls that breach quality guidelines.
- Artificial intelligence automatically produces accurate forecasts of contact volume.
- Optimization algorithms that build agent shifts that align perfectly with customer demand.
A challenge that is greater for customer service BPO than for in-house operations is reporting. Client contracts typically include reporting requirements, and each client has different reporting requirements. Outsourcers typically employ top-notch MI (management information) analysts, who use APIs (application programming interfaces) to provide regular client reports with little or no manual effort.
7. Choose the right WFM application
The goal of customer service workforce management software (WFM) is to optimize the deployment of the most valuable – and costly – resource in every center: the employees. Nowhere is this more important than in the outsourcing business.
What does ‘good’ look like when BPO customer service providers choose a workforce management software application?
- Critical: Monthly pay-per-use pricing. No software license ‘ratchet effect.
- Instant scalability
- Rapid implementation and low startup costs
- Unlimited integrations between the customer service platform and WFM
- Flexible configuration options
- Industry-strength information security
- Top-notch onboarding and support from local experts
- AI forecasting to validate client forecasts with minimal effort
- Optimized scheduling to maximize schedule efficiency
- Sophisticated real-time management tools
- REST-complaint API backed up with a custom report-building service
Does this sound like what you are looking for? Injixo—a comprehensive workforce management tool—has 30% of its users in the customer service BPO sector. Integrating seamlessly with Freshdesk, Injixo can help you plan your workforce for optimal efficiency.
Want to discuss how Freshworks and injixo can transform your customer service operation? Let’s talk.
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