An Insider’s Look at Cheap Outsourced Customer Service

In this fiercely competitive e-commerce landscape, you need to make informed decisions. And one of those crucial decisions is about how to handle your customer service and whether to outsource it. Outsourcing customer service without sacrificing quality is totally possible. But before you make a choice on an outsourced customer service company (especially one that sounds super cost effective!), let's shed light on some of the unseen pitfalls in our industry.

The Hidden Price of 'Low Cost' Solutions: Inexperienced Agents

Many of the competitors in the outsourced customer service space entice you with their seemingly cost-effective solutions (i.e. “as low as $8/hour”, etc.). But dig a little deeper, and you'll uncover some serious flaws:

• First, the price they lead with is the price if you have 15-20+ agents while the price for 1 or 2 agents is 30-40% higher (i.e., $12-$13+/hr). Deceiving...
• But the bigger problem is that their agents often lack both customer service and e-commerce experience. The reason? They're paying 25% or more below the market rate for customer service agents due to their flawed team financial model (more on that below). Dig around online for their recruitment job posts and you'll see this for yourself.

Both of the above result in low-quality service and high turnover of agents. This lack of continuity and expertise can be disastrous for your brand image and customer relationships.

When you get that cold email offering amazing customer service that drives revenue at such low rates, don’t get excited. Dig into the model, ask about their metrics, and you’ll realize this will turn into a revenue killer rather than a revenue driver for your business.

Disjointed Team Structures Cause Serious Cost Issues

All customer service providers have remote teams, typically in Philippines. That can work extremely well, but only if you have a model for your entire team that scales well and continues to provide quality at cost effective rates.

Here’s what happens with most providers though...

• They start out with a model that seemed to work: combining 5-10 low-cost Philippines-based agents with 1 or 2 US managers.
• However, as they expand, the cracks in this model start to show. With growing client rosters come the need for more US manager oversight.
• This causes the overall cost structure of the business to balloon, as the cost of a single competent US based manager is 4-5x the cost of an equivalent manager in Philippines.
• The reaction most competitors have is to cut costs on their already underpaid and under-experienced agents, thus the below market rates shared above for agents.

This slowly kills the quality of their service (i.e. inexperienced agents that are also underpaid quit more often), while also leading to price increases (at least on new incoming clients) for a worse quality service.

Don’t be fooled by “we manage customer service for 500+ ecommerce brands” either. When you have this flawed model, it produces worse and worse results as the company grows. The increased need for US oversight means even more costs, leading to further compromises on the quality of agents. It's a vicious cycle that never solves itself.

In short, if a company has a overseas workforce managed by a US based management team, it's a red flag that should be dug into prior to assuming it's working as well as they say it does.

Our Approach: Experience, Quality, and Effective Team Structure

At HelpFlow, our model is better. Yes, we’re biased, but here’s how it works. Notice how simple this is in contrast to what you saw above:

• Experienced Agents, Paid Well: We hire seasoned customer service agents from the Philippines with a strong background in e-commerce. Yes, the cost for our agent team is 25-30% higher than competitors, but our retention is significantly higher which leads to much better quality.
• Seasoned Philippines Management Team: Our team structure is entirely based in the Philippines, including managers, account representatives, team leaders, and executives. This creates a cohesive company culture at all levels, while leveraging overseas labor economics to maximize value for clients.
• Cost Effective Without Sacrificing Quality: This model allows us to provide high-quality service at competitive rates. And we improve as we grow, rather than becoming more expensive and lower quality.

In the end, you get what you pay for. But when you understand what you’re getting with cheap customer service providers, you’ll think twice about paying for it at all.

If you're looking for customer service that truly supports your growth without compromising on quality, reach out to us. Even if we don’t work together, you’ll get a ton of value from the process since we’ve worked with so many stores and have been running customer service teams in this space for nearly a decade.