Can You Really Outsource Customer Success?
Not sure what it means to outsource customer success?
Imagine your experience learning to ride a bike as a child.
Did your parents give you a grown-up size bike and told you to go on and learn by yourself riding on the highway? Or did you learn on a bike your size, with training wheels and your parents giving you a gentle push and cheering as you kept your balance while riding across the lawn?
Probably a variation of the latter.
Interestingly, these two options are ways companies can choose to relate to their customers. They can sell them their product and send them out into the big wild world and only deal with the problems as they come up (customer service) or take them by the hand and educate them on how to use their product (customer success).
In other words, customer success is proactively taking care of your customers to help them get maximum value of your product or service. The results of this process are longer customer retention, turning customers into raving fans, and lots of referrals through word-of-mouth.
When you have a team focused on customer success, you can expect:
- An increase in renewals, upsells and cross-sells
- Happy clients that love your product or service
- Product usage/adoption
- Customer health and retention
- More revenue
Now, the question is: should you have an in-house team or is it really possible to outsource customer success and see great results?
This is an interesting question, since outsourcing sales and customer support has already proven to be a great option for growing companies.
So let’s look at some of the pros and cons of outsourcing customer success.
Before even doing that though, bear in mind that if you don’t have the bandwidth to take on customer success yourself, it’s better to outsource than “non-source”.
The Downsides of Outsourcing Customer Success
Customer success is about building long-term relationships, which takes time and commitment. This may be easier with an in-house team committed to the lifetime value of the customer. An outsourced team may not be there for the long haul, especially if they have a limited-term contract. On the flip side though, by nurturing and building a great relationship, this problem can be addressed from the offset.
Additionally, customer success teams need to be decision-makers. They should have authority to offer special deals for renewals or promise things to customers that involve other departments within the company. Some teams are not comfortable giving such authority to an outsourced team, and if this is the case, it may be a good idea to keep it in-house. However, great communication and simple parameters can overcome this issue.
The Benefits of Outsourcing Customer Success
Hiring and training an in-house team takes a lot of time and money, which you can save if you outsource customer success.
Companies of all sizes report significant reductions in operating costs, with outsourced work. According to Forbes: Aetna (where some 14,500 of 35,000 employees don’t have an “in-office” desk) shed 2.7 million square feet of office space, saving $78 million. American Express also reported annual savings of $10 million to $15 million.
This was also the case with IRI, a data management solutions company, that outsourced their customer success staff to save office space, salaries and equipment costs.
However, the results went beyond just cost savings. IRI began working with an outside team extensively trained in client success and communication style best practices, who were quickly on-boarded and ready to drive client engagement.
The outsourced team increased average Net Promoter Score by 0.8 points within 6 months, and annual client retention rates by 20%.
Experienced outsourced teams use customer success software to automate much of the process. This is another consideration when thinking about outsourcing customer success: are you ready to implement and learn to use a new tool, or do you want to use a managed service provider that already uses that tool?
Outsourcing with the right partner also gives you access to success metrics and analytics that you may not have at the moment, as well as the ability to scale fast, adding more members to your team in no time.
Customers want help through different channels - via phone, live chat, social media, and more. Unless, you can provide all those channels in-house, the support of an outside team that uses an omnichannel approach can be vital.
Remember: whatever you can do to help your customers succeed, will enable you to succeed, and earn more revenue.
With so many tools and platforms to stay available at all times to your customers, there aren’t too many excuses for a high churn rate. Many organizations rely more on “chasing new business” than ensuring their current clients are happy. It’s a shame because it costs more to retain than it does to onboard.
Despite the potential difficulties of running a customer success program with an outsourced team, the pros may outweigh the cons.
Think about it: the reason you’re in business is to satisfy your customers and excel, but you must stay in business to do that. Running your business in a cost effective way forces you to make decisions for the long run and that’s why it can be a great option to outsource customer success.
Furthermore, there are countless examples where an experienced and trained outsource team not only saved a company money, but also greatly improved their results as well.
There are many organizations that deem BPOs as unamerican. That these overseas jobs are taking money from the pockets of hard-working Americans that are more than qualified to do these jobs. Though this might be partially true, what do you say to the smaller organizations who can’t afford to hire and train half a dozen in-house reps? That to these companies, a BPO is the only way for them to stay competitive. I don’t know about you but small businesses are the backbone of America and if we can help small businesses grow, this means a bigger piece of the pie for us all.
Are you looking to improve your NPS? Then this guide is for you: