Outsourced Service Insights: A Behind-the-Scenes View

Gaining outsourced service insights can help you avoid common pitfalls and select a customer service provider that offers both cost-effectiveness and quality.

Jon Tucker
CEO HelpFlow
Outsourced Service Insights: A Behind-the-Scenes View

Navigating the competitive e-commerce field requires making strategic choices, particularly regarding customer service. Deciding whether to outsource is significant, and maintaining quality while doing so is achievable. However, it’s important to be aware of potential drawbacks. Gaining outsourced service insights can help you avoid common pitfalls and select a customer service provider that offers both cost-effectiveness and quality.

Outsourced Service Insights: Pitfalls of Inexperienced Agents

Outsourced Service Insights pitfalls

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.

Receiving a cold email promising exceptional customer service at low rates might seem appealing, but it’s crucial to approach with caution. Investigate their business model, inquire about performance metrics, and arm yourself with outsourced service insights. This due diligence can reveal whether such a service will genuinely boost your revenue or potentially hinder it.

Disjointed Team Structures Cause Serious Cost Issues

Outsourced Service Insights structure

Remote teams, often based in the Philippines, are common among customer service providers. This arrangement can be highly effective, provided there’s a scalable model that maintains quality service at cost-effective rates. By incorporating outsourced service insights, you can ensure that your customer service strategy is both efficient and sustainable.

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.

Be wary of claims like “we manage customer service for 500+ ecommerce brands.” A model that seems scalable on the surface can deteriorate in quality as the company expands. The necessity for additional oversight in the US often incurs higher costs, which can result in a decline in agent quality. This creates a problematic cycle that can be difficult to break. Gaining outsourced service insights is key to understanding and avoiding such pitfalls.

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

Outsourced Service Insights approach

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.

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