The Hidden Ways a Good Outsourcer Can Create Value for Your Business
What keeps business leaders up at night? According to the latest C-suite survey, it’s three things: recession, inflation, and higher borrowing costs. It’s simply more expensive to run a business, and almost half of CEOs worry that theirs won’t be viable in ten years. In response, executives have taken large steps to reinvent their business models, changing how they create and capture value. The decision to outsource is one factor, with many citing lower costs and more flexibility as the initial reason for choosing to work with a customer experience (CX) vendor. Yet, procurement exercises rarely consider the true costs and true sources of value created by such a partnership. Outsourcers aren’t just a way to reduce operational expenses. Here are some other less obvious ways that a good outsourcer can create value for your business.
The Value of Retention, Closing Rates & First-Call Resolution
When selecting a CX vendor, it’s important to look not just at price, but outcomes, and the value those outcomes create. An example is a vendor with a high customer retention rate. Studies show, it costs anywhere from 5 to 25 times more to acquire a new customer than to retain an existing one. If a vendor is particularly skilled at building relationships with customers, they not only help retain them, which saves you the cost of acquiring new ones, but can often do so using fewer concessions, which also means a lower retention cost. It’s critical to look not just at performance-based metrics, like CSAT, but also those outcome-based statistics that show a vendor can deliver results that add direct value to your business. This could be retention rates, or even close rates for sales teams, which shows that a vendor can generate direct revenue.
Likewise, first call resolution rates are another outcome to consider and may be worthy of exploring with any prospective vendor. Though not immediately looked upon as a cost-saving measure, first call resolution can still deeply affect your bottom line. If more calls are resolved the first time, not only are customers happier, but customer callbacks are also reduced. Call volumes are eased, and vendors can deliver the same high quality customer experience more efficiently, using fewer resources, which means they can maintain lower operating costs to help mitigate the effects of inflation.
The Value of Having Vendors Closer to Home
There’s nothing worse than being locked into an expensive solution, one with all the bells and whistles, when that may or may not benefit your business or lead to your desired outcomes. By contrast, flexible contracts that give you only what you need, when you need it, add value to your business by giving you the ability to scale your services up or down as needed. In a time when market volatility is still high, and many unknowns persist, the ability to navigate market fluctuations, and tailor your CX solutions as needed, is invaluable. It’s the closest businesses can get to being recession-proof.
The same applies to the cost of supporting an external vendor relationship. Not everyone factors in the cost of time or travel. Since 2022, the cost of corporate trips has almost doubled. Air fares alone have skyrocketed 72%, which means the cost of onsite visits is now much higher, especially for those whose contact centers are found 18 to 22-hours away. If you’re looking to lower corporate travel costs, or reduce your time spent away from home, it might be time to consider a vendor based somewhere closer, such as the Caribbean or Latin America. Nearshore vendors boast the same capabilities as far shore vendors but are only a short flight away. You can easily hop on a morning flight and be at your contact centers within 4-5 hours. This closer proximity allows better oversight of your operations, more real-time communication because of the aligned business hours, and swifter resolutions if any problems arise. In a world where time equals money, the ability to act fast and pivot even faster is priceless.
The Value of AI and Automation
Another obvious source of value is the integration of automation and AI into your vendor operations. Many vendors are already exploring ways that generative AI (GenAI) can streamline costs and enhance operations, whether it’s increasing the efficiency or productivity of live agents, improving data capture, or introducing chatbots with natural language capabilities. This is the obvious value that can be created by vendors who can successfully couple SaaS (software as a service) with PaaS (people as a service). However, the real value often lies in knowing how to balance technology with people. AI is not necessarily a “silver bullet” for all CX inefficiencies. A good outsourcer will have the knowledge and technical expertise to know where and when to apply AI solutions, to capture and deliver value, whether that’s the value of increased efficiency or the value of creating a more seamless CX journey.
Every technology also has license costs, implementation costs, and infrastructure costs to consider. A IDC study showed that most large organizations in 2020 spent an average of $134 million just to deploy AI solutions, with an average per solution cost around $100,000 to $150,000. AI also requires massive computational power and data storage, which means ongoing maintenance costs. And though the onus of implementing such technologies may fall to CX vendors, outsourcers must recoup some of these investments and their overall project pricing will reflect that cost. It’s important to choose vendors who take a pragmatic approach to AI rather than a flashy one. Planning should revolve around practical AI applications that will lead to true value, not hypothetical ones. Vendors must also understand the regulatory and privacy implications of using AI, otherwise you could end up with another costly liability.
Where We Can Help
Every business leader must keep their eye on the bottom line. Whether you’re a medium-size business or a global enterprise, cost management and optimization will always be a primary concern when working with an outsourcer, especially in times of high inflation. Price should not be the only consideration when selecting an external vendor. There’s also the quality of service, reliability, and industry reputation of a vendor that should be considered, as well as the ease of doing business with them – all of these will affect how well they can deliver and how much value they can offer your business.
As an award-winning CX provider, with one of the largest nearshore footprints across the Caribbean and Latin America, we have the expertise, the capabilities, and the talent to deliver astounding value, but more importantly, to build the kind of client and customer relationships that lead to the best results. We offer flexible contracts that allow you to scale as needed, along with a full Data Science & Innovation team specializing in Robotics Process Automation. We also excel at customer retention with “save rates” almost 20% above other client vendors. That’s because we focus on building true relationships with our clients, our employees, and your customers, through an authentic, no-nonsense approach. Our aim is to become an indispensable extension of your organization by uncovering new value-generating opportunities, creating new tools for efficiency, and finding effective solutions to the CX challenges you face.
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