The ultimate guide to outsourcing startup customer service

There’s a certain romance to the concept of start-ups. We’ve all heard stories about the budding entrepreneur who rolled the dice on their big idea and received an even bigger payday. The guy who worked out of his spare room for 18 months and now oversees dozens of employees across several locations. The woman who begged and borrowed money from her parents to start a fashion label and now rakes in millions and rubs shoulders with the rich and famous at swanky parties. The corporate powerbroker who got sick of battling through 80-hour weeks and launched an eCommerce venture that now earns him as much as money for working half the time.

Such dreams do come true – but for very few people. The reality is start-ups are hugely vulnerable to risk and the brave souls who accept the challenge of launching them face a wide array of challenges, hurdles and sleepless nights just to survive the first year, let alone establish a profitable business that will attract the attention of potential investors. Bureau of Labor Statistics data shows a third of all young companies fail within two years and only 50% continue to operate beyond the first five years. Other studies have shown those numbers may even be generous, with the aptly named Failory – “the all-in-one content site for start-up founders” – suggesting about 90% of start-ups fail and 10% do not even make it through the first year.

Start-ups are also hard work. For proof of that, look no further than studies that have found 81% of American small business owners work overtime, with 30% clocking up 40-49 hours per week and 20% saying they work 50-59 hours. It is not only late nights either, with 89% of them regularly working weekends in a bid to keep their start-up dream alive.

This is not an article aimed at scaring people off pursuing their start-up dreams though. To the contrary, it is designed to inspire more visionaries to achieve success in the field and that is by alerting them to the fact help is at hand. If there is one thing almost anyone who has launched a start-up can appreciate it is the feeling of trying to do everything on their own as they juggle limited resources, zero to few staff and a mile-long to-do list. Fortunately, outsourcing providers can ease some of that load, especially when it comes to enhancing the customer experience that can quite literally make or break a new business.

What is customer service outsourcing?

Customer service outsourcing is the process of hiring an offshore team or team member to fulfil mostly contact centre-related tasks. Few things have the power to erode profits quite like poor customer service, with studies showing 78% of customers have disengaged with a brand as a result of poor customer experience. That is why it is crucial that businesses make every effort to ensure customers walk away from every interaction with smiles on their faces.

Unfortunately, it is the nature of the beast that customer service can be one of the first things to suffer amid the hectic environment of a start-up. When a sole operator or handful of employees are simply trying to keep their heads above water, there is an inherent risk of customer care becoming a secondary thought rather than the priority it needs to be, especially in a digital age when consumer expectations are greater than ever. 

Rather than battle on alone, many start-ups are better off focusing their limited funds and resources on developing and expanding their core business and outsourcing customer service to third-party providers who are experts in the enhancement of consumer relations.

Benefits of customer service outsourcing for start-ups

There are multiple reasons outsourced customer care is a wise choice for start-ups including:

• Cost savings: the days that companies looked to outsource solely to save money are long gone but there is no doubt it makes great economic sense. Along with tapping into job markets that offer labour cost savings of up to 70%, offshore providers already possess the infrastructure, software and equipment needed to deliver an exceptional experience. They also allow in-house teams to avoid the costs associated with recruitment and training. As many start-up owners have learned the hard way, the cost of hiring in-house customer service representatives can be steep but it is reassuring to know more economical options are lying offshore.
• Faster growth: everyone who launches a start-up does so with aspirations that it will grow but what happens when it grows a little too quickly? Start-up outsourcing allows you to better manage unexpected growth by seamlessly tapping into the likes of customer service support staff in cost-effective offshore locations such as the Philippines. Few things will slow growth like poor customer service, which is why it is imperative to expand or restructure your customer experience offerings as needed. Companies in growth phases or seasonal cycles also face the challenge of navigating ever-changing support volumes, with customer service outsourcing allowing business owners to easily scale staffing up or down depending on the circumstances.
• Instant professionalism: consumers have never been more likely to walk away from a business in the wake of poor customer service, with studies showing as many as 84% of Millennials and Gen Zers would dump a preferred brand if another offered a better customer experience. Meeting such high expectations can be daunting but outsourcing providers offer highly professional customer service structures, along with agents who are well versed in dealing with tricky customers and navigating their problems and queries with ease. Rather than spending countless hours and resources on setting up an in-house customer service team, smart organisations are choosing to partner with external experts and dedicate their own energies to the activities at the heart of their business offering.
• 24/7 support: in a world where technology is connecting people more than at any point in human history, 24/7 customer service and call centre support is no longer a bonus but a necessity. Research has shown that 73% of customers consider the value of their time the key to satisfactory customer service and that is where the efficiencies of outsourcing providers can play a pivotal role by delivering shorter hold times, instant online chat and around-the-clock management of social media and DM queries. You may have seen a sign hanging in retail stores that says: “The customer is always right.” Well, your start-up can deliver on that mantra by looking to other time zones and more cost-effective staffing structures for your customer service needs.

How do you set up outsourced customer service for a start-up?

Outsourcing customer service is a smart choice for start-ups but it can quickly turn sour if you rush in without a plan. Here are a few key steps to consider in your bid to optimise customer service.

• Research multiple providers: just like your start-up, every outsourcing provider is unique and that is why it is essential to do your homework. To locate the best option for your needs, take the time to identify exactly what you need them to deliver and factor in the likes of time differences, language standards and technology platforms. Given the importance of customer service, no question is too silly so ask what needs to be asked and demand quality answers.
• Establish one voice: an outsourced provider may well sit outside the four walls of your start-up but it is essential your offshore colleagues are just that – colleagues. A customer should feel like they have had a personal connection every time they interact with your business. Develop guidelines to ensure external support staff know what they can and cannot communicate with customers and work with offshore team leaders to ensure they continue to receive the training and support they need to be valued members of your organisation.
• Employ strict security: allowing external providers access to your internal systems is a necessary part of outsourcing relationships but information needs to be handled sensitively, particularly when it involves customers. Thoroughly examine what customer data is being shared and limit access to areas that require extra sensitivity such as health records. Legal considerations also need to be top of mind, with any contracts with outsourcing providers to be reviewed with a fine-tooth comb. Finding a reliable outsourcing partner to help manage customer service today will deliver many rewards in the future.

Customer service is vital to the success of any start-up but unless your product is customer service, it is safe to assume you would prefer to dedicate your energy to other areas. Outsourcing customer service operations to experienced and highly qualified providers allows you to do just that while maintaining confidence that crucial conversations and engagement with consumers are being handled with the utmost care. Trying to do everything in-house is tempting for start-up owners but it is a strategy that can quickly backfire and there are few more costly mistakes to make than delivering poor customer experience.

Scaling a young start-up quickly while keeping overheads low is a challenge. Our Small tech startup leverages outsourcing to scale quickly case study explores how one small tech start-up achieved this balance by hiring an offshore team member who delivered excellent customer support metrics, identified cost-saving opportunities for customers and helped the Managing Director focus more on strategy and less on day-to-day customer interactions.