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Customer Service – When Does Outsourcing Make Sense?

It’s hard to overestimate the importance of great customer service in building an e-commerce brand. Zappo’s, one of the great unicorns in e-com’s history, is perhaps better known for their customer service than they are for selling shoes. E-commerce companies pride themselves on creating products that are game changing, so it stands to reason that no one could provide customer service better than the company who understands the product inside and out. But as businesses try to scale, that rationale can break down. If it does, you’re left with a question, do we continue to struggle with the logistics of managing our own, or do we outsource?

Before we get too far into that question, some perspective is helpful. Often, people don’t consider the fact that customer service is itself a thriving industry with no shortage of providers. Put another way, if you invest in building your own in-house customer service team, you’re essentially building two businesses. Building one is hard enough. While it’s not impossible to create two simultaneously, it’s not for everyone. And while a third party customer service company may never know your product quite as intimately as you do, they can come pretty close. On the flip side, it’s hard for a company that specializes in something else to be up to date on all the latest innovations and technologies in the customer service space. So, clearly, both sides have distinct advantages.


So, how do you know when it’s time to consider outsourcing? That varies by companies, but there are a couple main reasons.

First, if you know your own efforts are falling short because you’re stretched too thin or you don’t have a passion for building and training a service team, you owe it to your business and your customers to find a third party who can provide great customer support.

The other main reason is logistical. Sometimes a company reaches a size at which it would need to expand capacity — bigger building, more managerial staff — but doing so would tie up capital that the company wants to invest in other areas.

The third category is companies who offer a product that isn’t highly differentiated from the competition. In this case, offering category-leading customer service can be the key to winning more market share.

Above the big reasons, there are also issues like not being able to scale up for the holiday season, or not being able to hire part-time staff for weekend support, that can make it hard for e-commerce companies to provide the level of customer service they could if they outsourced.


If you decide it’s time to look into outsourcing, here are a few things to keep in mind throughout your search.

First, you want to sit down with your team and take the time to determine what the most important part of your customer service offering is. That way, you can look for a provider who specializes in that aspect of customer service.

If speed is highly important and the service provided is highly repetitive, it might make sense to use a foreign company. If English language customer calls are important to your business, perhaps you lean toward an American provider.

Finally, consider opportunity cost when weighing pricing from different vendors. A higher monthly fee might not seem so high if you believe that company will help you secure and retain loyal customers.

If you still have questions after reading through this, we’re happy to help. You can call us at 1-866-289-9010 or email us at sales (at) owd (dot) com.