Need Outsourced Customer Support Services? Here's Why You Should Consider A Chatbot Instead
Published by
James Rice Mcaulay

E-commerce is a global industry and brands must be prepared to service customers in markets from all corners of the world. Using traditional customer support methods, that degree of service would require an extensive amount of internal support staff, resources, and translation services to address shopping concerns in any number of different languages. Do the math, and you can probably see how this method is not feasible for your company.

Similarly, outsourced customer support services are not the magic bullet they may appear to be. While outsourced support can reduce challenges placed upon your internal support team, they also have their shortcomings. It’s hard to scale your productivity and profitability if your costs increase to arrange for a third party to handle the bulk of your customer support enquiries.

What is customer support outsourcing?

In a nutshell, customer support outsourcing describes when a company makes the decision to hire a third-party service provider to handle the hiring, training, and managing of customer support teams. Your third-party vendor will also be responsible for handling the majority of day to day customer enquiries, which can be very repetitive and time consuming for in-house teams.

Since technology has broken down traditional barriers and business practices, it makes sense to leverage different tools to reduce the burden on your in-house support team and scale up both operations and revenue.

But before you go all in on a third-party customer support provider, you should conduct a cost-benefit analysis to ensure you make the right decision. You may find that technology itself could be the solution, such as an AI-powered chatbot. To give a concrete example, Kahoot! used an AI-powered chatbot to streamline and automate sales and customer support for the benefit of the business.

What are common customer service outsourcing benefits and risks?

As part of your cost-benefit analysis of a third-party customer support provider, you should analyze the potential risks and benefits of conducting business with one of these companies. Once you understand the potential costs and rewards, you can determine the best path forward for your company’s needs.

Risk #1: Expensive to hire and retain

Many of these third-party service providers are expensive, requiring a significant financial commitment from your budget. In 2020, the average hourly rate for an outsourced customer support representative was approximately $40 per hour in Western Europe. You would likely need a number of reps to handle the amount of support enquiries coming into your business so multiply that hourly rate by at least four additional people.

If you add those numbers up for an entire year of operations, the wages paid to outsourced reps can add up as high as $333,000 per year. Looking at that number alone, you reasonably have to ask the question: can your budget really afford that?

Risk #2: Limited language support

Additionally, third-party support providers may not have the resources to service customers in less common markets. Many companies have staff to address concerns in widely spoken languages like English, French, Spanish, German, Mandorin, Cantonese, etc. But there are dozens of other languages that are left out in the cold.

For example, this one outsourced support company commits to servicing customers in 12 different languages. But if your brand offers a global e-commerce shopping experience, there are far more than 12 spoken languages throughout the world. What about languages in Scandinavian Europe, or throughout much of Africa, the Middle East, and Central Asia? Very few support companies provide that degree of localized service.

That’s why AI-powered chatbots are a great alternative to outsourced human support. Chatbots can be programmed to learn as many languages as possible, enabling you to provide a real-time customer support rep that speaks the preferred language of the shopper. Engaging with people in their own dialogue is a great way to build trust and increase the likelihood of a completed purchase.

Benefit #1: Reduces workload for in-house teams

Customer support teams are often stretched very thin in terms of headcount, and the reps who are on the team have very little time to spare. The majority of inbound customer support requests are variations of the same questions fielded to reps again and again, causing them to spend excessive hours handling repetitive inquiries.

An outsourced solution can solve much of this problem by offloading the bulk of those repetitive enquiries to a third-party service provider. This frees up time and energy for your in-house team, allowing them to put more focus on big picture solutions that can benefit the business.

At the same time, you can add another layer of support through the use of a Virtual Shopping Assistant. Virtual Shopping Assistants blend a suite of conversational AI solutions into a convenient platform that improves shopping experiences and boosts total revenue.

Benefit #2: Faster support turnaround times

Speedy customer support is one of the most important elements of a satisfying shopping experience. According to Forrester’s market research, 47% of shoppers will abandon an online purchase if they don’t get adequate speedy results.

If in-house teams are overwhelmed with excessive enquiries due to limited headcount, an outsourced provider can handle more of those inquiries and deliver faster results. This improves the shopping experience and converts more shoppers into buyers.

Additionally, chatbots are available to service customers in real-time. By adding a chatbot to your website, you can address even more concerns at rapid rates and deliver optimal customer service.

Benefits of using a chatbot instead of outsourcing customer support

Rather than rely solely on a third-party service provider for additional support, you do have another option. An AI-powered chatbot handles the inflow of customer support enquiries in real-time, and it helps guide shoppers to the pages on your website that provide the answers and the products to address their specific needs.

Benefit #1: Chatbots improve the customer experience

Since chatbots operate in real-time, they provide immediate answers to common customer questions. Remember that Forrester statistic about 47% of people abandoning a shopping experience if they fail to get a quick answer? A chatbot provides faster service than both your in-house support staff and a third-party provider, which drastically reduces that abandonment rate.

Take Elkjøp’s experience as an example. Their e-commerce chatbot has successfully serviced over 1 million shoppers, leading to a user satisfaction rate of 80%.

Benefit #2: Chatbots never sleep or take vacation

As a global e-commerce company, your customer could be in any number of timezones and require assistance any possible day. Your in-house team is only available for so many hours of the day, and even third-party providers can’t guarantee immediate service each and every day.

On the other hand, a chatbot is alert and active on your site 24/7 for 365 days of the year. Business hours don’t matter with a chatbot, allowing you to deliver the quality service customers expect at any time of day on any day of the week, and even during national holidays when human employees are off on a well-deserved vacation. This is how Norwegian Airlines serviced international passengers with real-time service, reducing the number of live enquiries handled by human agents by 20%.

Benefit #3: Chatbots help you profile shoppers and improve your website

Data is the key to optimization and future-proofing the integrity of your business. You constantly need to evaluate web performance to ensure conversions are reaching target, abandonment rates are going down, and the overall experience is satisfying for customers.

Chatbots use machine learning to analyze audience engagement, and they store those conversations in digital archives for future reference. Your team can review those conversations whenever necessary and find patterns in common questions or on-site behavior to improve the shopping experience. If you can use the chatbot’s insights to answer the next batch of questions before they’re even asked, that’s ROI on your chatbot investment right there.

That’s how Helthjem benefitted from an AI-powered chatbot. They worked with us to build a chatbot to handle a flood of incoming customer enquiries, and used the archived conversations as feedback to improve the quality of their delivery service for customers. In total, one out of three follow-up enquiries are successfully handled by the chatbot.

Benefit #4: Global language support without added personnel costs

One of the main risks mentioned above when it comes to outsourcing customer service is the added personnel costs for each additional language. When you consider the amount of languages in the world, that cost adds up quickly. And the most you limit customer support in local languages, the less revenue your company receives from that local market.

That’s where a chatbot is one of the best possible alternatives. You get customer support in most global languages and teaching a chatbot a completely new language only takes about one month. No matter how global your company is, chatbots help you scale without adding a huge language burden to your customer support team.

Elkjøp gives us another helpful example here in that they use a chatbot for English, Spanish, Danish, Norwegian, and Swedish, customer support, which has resulted in a 50% increase in automated conversions and no additional costs for personnel. That’s quite the impact on their bottom line!

Improve your customer services with a chatbot

At Kindly, we help brands grow their businesses with tools to enhance as well as automate customer support in order to improve the overall shopping experience. Our chatbots are powered by AI, machine learning, and natural language processing (NLP) technology so that they constantly evolve as they’re exposed to more audience interactions.

As they learn to identify patterns in behaviors, they’ll be able to answer more questions at faster rates, and even provide personalized product recommendations that go above and beyond the initial requests. You’ll be able to reduce the burden on your in-house team, cut down costs to third-party support vendors, and deliver exceptional customer service that enhances the quality and reputation of your brand.

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