August 5, 2022

Build a recession-proof business with a BPO provider + an internal support team

Brian Sze

It’s natural to keep an eye on details like maintaining a Net Promoter Score (NPS) of 80% and ensuring effective SLA management when you work in customer support. But you also know it’s important to stay in the loop with how your entire organization is faring. On that note, it’s safe to say you’ve heard a lot of talk about a looming recession.

While there aren’t any guarantees this will happen, the experts at Morgan Stanley say the likelihood of a recession has doubled from earlier this year. Many companies are already bracing themselves by asking departments how they can start reducing costs before a downturn hits. For you, that means evaluating how your support team is structured now and how you can adjust to ensure you’re prepared to manage the uncertainty ahead.

If you haven’t already started working with a business process outsourcing (BPO) provider, it’s time to start looking into it. Taking a dual approach of working with a BPO alongside your internal support team might be your key to building a recession-proof business.

Why working with a BPO supports a recession-proof business

It’s not a stretch to say that customer support departments are rapidly moving toward leveraging BPO providers. According to a report from IT services and consulting company CGS, 79% of organizations already are or will start outsourcing customer support in 2022. Relying on both a BPO and an internal support team is also more common than you might expect. The report shows that 26% of organizations are using this combined approach.

Pie chart graphic that reads: "79% of organizations are or will start outsourcing customer support in 2022"

The CGS report also makes the benefits of working with a BPO provider (at least partially) quite clear. The primary reasons for outsourcing customer service are to:

⭐️ Improve the quality of service

📉 Reduce overhead and operational costs

🥇Drive better business outcomes

How does working with a BPO vendor achieve these results? Let’s start with addressing quality and business outcomes. 

When you outsource customer support, you can be selective about the vendor you choose. This means you can seek a provider that focuses on your organization’s exact area of specialization, which improves service quality. That translates to a more positive customer experience and better outcomes. As Accenture points out, organizations that infuse the customer experience into every aspect of the business outperform their peers considerably. 

As for how working with a BPO provider can reduce costs, think about your typical recruiting, onboarding, and training processes. Those are expensive endeavors. That’s not to mention the weeks — if not months — required to fill open positions. 

If you pass the recruiting and hiring responsibilities over to a BPO vendor, they’re the one that ends up carrying the cost. BPOs have economies of scale and tend to operate in areas where it isn’t as expensive to find top-tier talent. 

Just be aware that costs will vary depending on exactly where the BPO provider is located. There are three primary types of BPO vendors: onshore, nearshore, and offshore. Generally speaking, onshore is the most expensive while offshore is the least expensive. You can get a better sense by taking a look at this report from Outsource Consultants. It shows that hourly rates for BPO vendors can range anywhere from $10 per hour to more than $30 per hour. 

But don’t let cost be the only deciding factor. You should also think through considerations like language proficiency, cultural understanding, and security procedures. 

How leveraging a BPO provider can benefit your internal team

There’s a tendency to fear that outsourcing a significant portion of your support operation will make certain roles obsolete. That’s sort of true, but it’s more of a progression that can end up being really useful later on.

If you’re able to leverage a BPO vendor to handle the mundane, repetitive requests your in-house team can answer in their sleep, your already skilled agents can spend more time working on complex issues that actually deserve their attention.

We’re already seeing this happen as AI and other tools have taken some of the burden off agents. For example, chatbots can take care of simple requests without ever requiring an agent to intervene. According to Deloitte, tech-assisted professionals will likely see dramatic improvements in their success rates. 

As you continue to go the BPO route, you can expect some turnover. That might sound alarming given that, even before the spikes in attrition we saw during the past few years, an attrition rate of 30% to 45% was considered typical. But it isn’t necessarily a bad thing for attrition to simply run its course. 

Yes, your internal team could look much different in a few years. But they’re likely going to be valuable subject matter experts you just won’t find anywhere else. And the support a BPO vendor provides them will make them even better in the long run. 

What it takes to set up a successful dual support team

Reaching the point of working with a BPO provider alongside your internal team will take some serious effort. But if you do it right, your odds of establishing a recession-proof business are considerably higher. It all starts with finding a BPO vendor that has the experience and skills it takes to match the exceptional service your own customer support team is known for. 🏆

Find the right BPO provider

Finding quality BPO vendors begins the same way as finding providers for any other type of service — with research. You can get started with a simple Google search. You’ll get a lot of results, so be as specific as you can to help narrow the results. And consider reading reviews to make sure you’re choosing a quality vendor.

For a more focused approach, try asking peers for word-of-mouth recommendations. This can be especially helpful if you know other workforce management professionals in your industry — or at least one that’s similar. You can also use a more refined search tool, such as Gartner’s Customer Service BPO Reviews and Ratings.

Eventually, you’ll want to compare notes across BPO vendors to come up with a short list of options. You’ll then go through a request for proposal (RFP) process, which is far simpler if you take the time to create a formal outline of what details to include and how to structure it. If you need help identifying the right questions to ask and how to structure your RFP, Outsource Consultants has a great template you can reference. 

Once you receive proposals, compare them as objectively as possible. The best way to do this is to create a scorecard that lists all of the elements that are most important to you, such as years of experience, performance management processes, and so on. The scorecard makes it easier to identify the standout BPO providers that you can either select from or put through a final phase: a site visit. 

Either way, now’s the time to start getting really specific about how the relationship will work.

Be strategic about your BPO structure

Before you sign on the dotted line, it’s key to discuss the structure of your arrangement in very specific terms. Keep in mind that just because a BPO provider traditionally does things one way, doesn’t mean they’re closed off to alternatives. Negotiation is all part of the process.

The first thing to consider is the pay structure. There are two main types: attended and productive. With an attended model, you pay a flat rate per agent hour. You could be charged by the hour, the week, or the month. A productive model means that you only pay for time agents devote to doing work specifically for you — that doesn’t include lunch breaks, internal meetings, etc. Attended is generally simpler, so it’s a good choice for small teams. To make a productive model work, you really need to be generating robust forecasts on a regular basis. 

You could also get more creative. Perhaps you can bring the cost down if you agree to have slightly less oversight — one manager for every 12 agents as opposed to one manager for every 10 agents, for example. Or maybe you work out an arrangement that focuses on outcomes — it could specify you’ll only be charged for solved cases.

Graphic text that reads: "BPO pay structure options: Attended pricing model, productive pricing model, outcome-based pricing model"

Another option is to outsource specific channels of engagement. It might make more sense to keep email, phone, and live chat in-house if your team is already crushing those channels. 💪 But if social media is a newer offering they aren’t as familiar with, you could choose to outsource that channel specifically. 

If you can, try to think of options that are mutually beneficial. It might not be the norm, but you could give the OK for BPO agents to work multiple contracts. In the event that there’s a slow day, that would allow the BPO provider to move an agent over to a different account rather than cutting them. You’ll get a discount and the BPO vendor will have the opportunity to recoup those costs. 

No matter how you structure your BPO arrangement, it’s important that you have as much visibility into their operations as possible. Having regular check-ins (weekly!) is a good starting point. You’ll be in an even better position if you leverage a workforce management platform that allows you to integrate the BPO provider into that system. You can log in and see metrics in real time this way. It gives you concrete numbers you can compare against invoices to make sure everything is in order. 

Yes, setting up a BPO arrangement is time-consuming. But being thoughtful about it is critical when you consider how high the stakes are. Just think what could happen if the BPO provider doesn’t meet your standards. A recent market study from CCW Digital reveals that 60% of consumers will switch to a competitor after just one or two bad experiences. BPO failures will reflect poorly on members of your team, who did a lot of hard work to get you to this point.

Be open and honest with your internal support team

Your in-house agents might be a bit nervous when you bring up the idea of starting to work with a BPO provider. It’s understandable — no one wants to feel like their job is at risk, especially when they know they’re doing excellent work. 

It’s essential to be honest with your customer support professionals. But be careful about your choice of language. There are good ways to frame the conversation and bad ways to frame the conversation.

Bad option: “Our budget is tight, so leadership is forcing me to cut costs wherever possible. This means that we need to aggressively pursue a BPO partnership and freeze internal hiring immediately.”

Good option: “I want to be clear — no one is losing their jobs. But with the recent economic challenges, we’ve made the decision to stop hiring full-time internal team members and instead get some additional help from a qualified BPO vendor.”

If the BPO provider will be covering shifts that have always been undesirable to your team, speak to that. Make sure they understand that they’re not losing the shifts they enjoy working.

You should also discuss what working with a BPO provider means for your team over time. There are so many customer support career avenues for those who want to pursue it long term. And you likely have a number of employees who are eager to start flexing their skills in other areas. No one will be disappointed to hear that hiring a BPO provider has increased their potential for upward mobility.

While you might not have the budget for a robust professional development program at this time, there are tons of options to help agents grow in their careers. Encourage your team to attend webinars, host skills workshops, or implement a peer mentor program. 

Remember, professional development opportunities don’t have to be costly to be effective. It’s more important that you support career growth. A survey from Better Buys shows that employees who are offered professional development are 15% more engaged and have 34% higher retention than those without such opportunities. 

Step into a new era of customer support

It would be foolish to say that working with both an internal support team and a BPO provider will 100% guarantee a recession-proof business. But it’s not a stretch to say this dual-team approach will get you closer to reaching that status. 

So long as you do your due diligence when picking a BPO provider, setting up the agreement, and keeping your team in the loop, your organization will be in a great position to continue delivering exceptional customer experiences while also minimizing operational costs. That’s a win-win anytime, and a win10 in the current environment.

But what if you’ve never worked with a BPO vendor before? We’ve got you covered. Find out what it takes to achieve effective BPO management.

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