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Customer Service Outsourcing: Why, When, And How


Scaling customer service is hard. Outsourcing customer service can help, but it’s a scary path for merchants. Here’s how to get it right.

As your brand grows, maintaining quality customer service is tough. At a certain point, you can’t obsess over every customer’s experience yourself — even small businesses have to delegate. But you can’t trust just anyone: CX is far too important for your brand’s reputation and bottom line.

Outsourcing customer service is one way to scale up. But that might conjure an image of underpaid, contracted agents alienating your customer base with poor service. These horror stories should make you very nervous: 55% of customers won’t return to your brand after a bad experience, so you should be picky about who can access your customers.

But outsourcing customer service can work — with a particular approach. The trick is an in-house/outsourced hybrid model. One that leverages outsourced knowledge and humanpower without losing sight of your brand’s unique business needs, brand voice, and processes.

That’s the model we use at HelpFlow, where we’ve hired and managed customer service teams as a Gorgias Premier Partner for over 100 brands for nearly a decade. Clients who outsource support to our services have reached chat response times of 10s, email response times of < 4 hours, and CSAT scores of 90+.

HelpFlow's results with customer service outsourcing.

Drawing from first-hand experience, I’ll share common landmines brands typically encounter with outsourcing customer support and how to choose an outsourcing solution that will actually help your brand grow. Last, I’ll tell you what customer service outsourcing companies — like the one I run — need from you to be successful.

What is customer service outsourcing?

Customer service outsourcing is the process of hiring external agents to help you handle customer service tickets. 

While outsourced call center service used to be the main way to get help with customer support, most modern services are omnichannel. That means they can help you keep up with interactions on email, live chat, social media, SMS, WhatsApp, and phone calls.

Outsourced agents can be individual agents you hire directly (through a freelancing service like Fiverr) or employees of customer service outsourcing companies. These customer service outsourcing companies are a type of business process outsourcing (or BPO).


Let’s dive more into these differences (and why they matter):

Types of customer service outsourcing

There are three main models of outsourced customer support, each with a unique way of supporting your team. Within each model, you’ll still find a wide range of pricing and quality. But before looking for solutions, you’ll want to decide which general model would work best for your team.

Agencies: Partner with a customer service company that hires agents for you

Customer service agencies are businesses that help you recruit, hire, train, and manage agents.

Outsource customer service with an agency model

Great agencies have tried-and-tested processes for hiring and training, close-knit teams of high-performing agents, and a public roster of past clients to help you make an informed choice when evaluating solutions.

However, that’s definitely not always the case. Some agencies — especially the ones with too-good-to-be-true pricing — hire the cheapest agents available, don’t provide training, and will degrade the quality of your support. As with all things, you get what you pay for.

Agencies are the best solution for brands that want an outsourcing solution that’s flexible, long-term, and quick to ramp up. 

Individual agents: Hire, train, and manage support agents directly

You can also hire your own external customer service agents individually, as contractors.

Outsource customer service by hiring agents directly

Like an agency, this saves costs compared to hiring a full-time employee. And compared to an agency, hiring individual agents gives you more direct control over the quality of service since you manage the hiring process yourself.

However, you’ll have to hire, train, and manage the agent(s) entirely on your own. Plus, guaranteeing 24/7 coverage and scaling up and down throughout the year will be more challenging than with an agency.

Individual agents are the best solution for small businesses that only need one or two more part-time customer support agents, and are willing to invest significant time in hiring and training those agents. 

“Pay-per-ticket” customer service services

In recent years, there has been an influx of pay-per-ticket services for customer service. These providers offer a scalable plan, where you only pay for the number of tickets in your inbox instead of contracting agents for a set number of hours.

Outsource customer service with a pay-per-ticket service

While the pay-per-ticket model can sound attractive, hidden feed and steep minimums make these kinds of contact centers less cost-effective than advertised.

In general, it’s best to stick with hiring contract agents directly or using a higher-quality agency. 

Pros and cons of customer service outsourcing

Customer service outsourcing isn’t the right customer care solution for every company. Sometimes, hiring full-time agents or using automation to stretch your current team’s time further is the right choice.

Here’s a snapshot of the pros and cons of outsourcing:

Pros and cons of customer service outsourcing

Pros of outsourcing

The biggest benefit of customer service outsourcing is obviously that it provides your company with additional help. Some other benefits of bringing on an external customer service provide include:

  • Increase and decrease agent headcount as volume changes (like for Black Friday—Cyber Monday) without having to hire and fire full-time agents
  • Cover your gent availability outside of business hours, especially by working with a customer service provider that offers 24/7 staffing
  • Cost savings, typically through hiring overseas, lower-cost domestic agents, and the fact that you don’t have to pay for health insurance and other full-time benefits
  • Knowledge about customer service tools and best practices to level up your support

Cons of outsourcing

  • Less control of agent workflow and processes than a full-time, in-house agent
  • Less integration of agents into your brand’s unique voice and culture
  • High agent turnover, especially at poorly run outsourcing agencies

Why outsourcing typically fails

Before getting into how to succeed with customer support outsourcing, let’s dig deeper into the typical traps that cause outsourcing to fail. a

This could be a post in and of itself, but here’s the quick start guide to fail:

Brands choose cheap services that sacrifice quality

When hiring directly, brand operators get enamored with the cost savings of outsourcing and try to put together a cheap solution that optimizes cost — and then the quality sucks.

Why outsourcing fails: Hiring cheap services for price, not quality

For example, if a service can get a customer service agent in the Philippines for $8/hour and takes that great deal regardless of the applicant’s quality or experience, they’re missing the point. Hire a more senior-level Filipino person for $9/hour, and they’ll run circles around brands that hire based solely on price.

“Pay per ticket” volume machine models incentivize the wrong thing

Startups in the space pitch a “just pay $ for each ticket we handle” model, which is a variation of the cheap issue above. Per ticket sounds nice, until you realize it means the agents are handling 10-20+ brands with little to no training and (sometimes) churning ticket volume to drive up the cost.

Why outsourcing fails: Pay-per-ticket models that sacrifice quality

$/ticket models turn into a way more expensive solution than managing CS in house.

The outsourced team doesn’t work close enough with your support team

Often, customer service managers simply don’t manage the external team closely enough — think cultural integration into the team, coaching, etc. This leads to agents operating a bit like customer service robots and eventually leads to turnover.

Why outsourcing fails: Outsourced teams don't work close enough with your brand

Nearly all the situations where “outsourcing didn’t work” come down to one of these — or a combination.

In-house/outsourced hybrids are the right solution

A hybrid structure for your customer service operation offers the best of both worlds: you maintain quality by keeping your in-house closely aligned, and scale impact with the humanpower of an outsourcing partner.

One note: Before you get started, your in-house Customer Service Manager builds an initial effective customer service process. While a great outsourcing agency should help you improve your process, an outsourced partner can’t build a customer support program from scratch. Always start in-house, then bring on outsourced help to scale.

Once that’s done, a customer service outsourcing partner offers additional agents and helps optimize your operation. They can handle tickets, suggest process improvements, implement more robust reporting, and assist with special projects like capacity planning and forecasting.

The key to this process is hiring agents that work exclusively with your brand (either directly or through an agency) and working closely with them. That’s the only way to achieve a balance of quantity, scale, and flexibility.

This is the model we at HelpFlow use with a wide range of brands. Here’s what Sam Menleshon at Sivana Spirit said about the process:

I have hired a lot of agencies and service providers over the past 10 years. Some great, some decent, and a lot terrible. Helpflow has been the best experience I have ever had with an outside service provider. Their team analyzed our communication with customers, streamlined it, and built processes for it. After 2-4 weeks of training, 3 agents went live. It was like having in-house employees just appear out of thin air.

— Sam Menleshon, Owner, Sivana Spirit

Signs you should outsource your customer service

One of our clients — an ecommerce brand in the apparel industry — came to us after a growth boom. They had a 4-day response time and 9-day resolution time, a serious threat to any brand’s customer retention.

While they ended as a success story (we helped bring response time down to 6 hours and resolution time to 30 hours), they should have sought support earlier.

Here are three key metrics that indicate when your customer support team may need some extra help.

3 signs you need to outsource support

Increasing response times

If your first response time and average handle time start to increase, it could be a sign that your agents are hitting their capacity in terms of the ticket volume they can handle.

These metrics can be helpful to benchmark, but you should track your own metrics over time and watch for changes in the wrong direction.

Consistent resolution times, but low satisfaction

If resolution time is consistent, but customer satisfaction is down, it could be a sign that your agents are not giving each ticket the same amount of thought and attention, potentially from overwork.

Tickets/day varies between agents

Lastly, if your response times and customer satisfaction are consistent, but some agents handle tons more tickets per day than others, take note. It could be a sign that certain agents are handling the excess volume that will eventually become difficult for the team to handle.

Note: Be sure that you filter out social media comment-related tickets if you are routing them all into the same helpdesk. Combining these with normal tickets can massively skew your insights since they usually just require a like or simple response in return.

Tips to outsource effectively

There are a lot of different factors that make outsourcing work (or not), some of which could be entire posts. For example, hiring agents, setting up helpdesk workflow, etc. But in this post, we’re going to provide a mid-level guide to each step so you can see the big picture and build an effective outsourced structure.

Prepare your customer service process for outsourcing

It’s so much easier to scale up the human side of customer service if your infrastructure, workflow, and management routine are dialed in. It doesn’t need to be perfect, but here are the main areas to solidify with your in-house team before outsourcing.

Configure your helpdesk for success

Set up your helpdesk to properly intake and route inbound calls and tickets. For example, in Gorgias, you can set up specific views to organize certain types of tickets in real time.

Prioritize customer service tickets

This allows your team to divide and conquer based on ticket type, and also prioritize certain types of tickets to drive more revenue (or save customer risk situations).

Setup proper customer service KPI tracking

You should have basic KPI tracking in place before outsourcing. For example, the most important customer service metrics are first response time, resolution time, customer satisfaction, and volume of tickets per agent.

These should be tracked by default with most helpdesks, but make sure the data is clean as soon as possible.

Benefits of tracking customer service metrics

Then, establish a weekly cadence to review these, (re)set targets for each one, and notice when the numbers start to get out of whack.

Prepare knowledge base and templates for agents

Having a robust knowledge base and templates may not be needed for your initial team, but they’re the best method of proactive quality assurance for external support reps. Gorgias has Macros, or dynamic templates, so you can build a library of responses that are on-brand and in-policy.

Macros in Gorgias

Vet customer service outsourcing companies carefully

At HelpFlow, we’ve offered outsourced support for nearly a decade. We’ve seen competitors come and go because agencies are very easy to start but difficult to sustain long-term. They can easily handle a few clients, but start cutting corners once they grow past about 15 clients.

Here are the key ways to dodge a lot of these agencies that can’t back up what they’re selling.

Vet the agency’s process for hiring agents

Many agencies hire any agent they can find at the cheapest rates possible to juice their margins. To make sure you’re getting A Player agents, ask the following:

  • What level of ecommerce and customer service experience do you require?
  • How do they screen new hires for experience, skills, and culture fit?
  • What’s the entry-level pay for new agents?
How to ver customer service agencies

For context, here’s a post we created with Gorgias on hiring customer service agents. It goes deep into the recruitment and screening process. Most agencies you encounter won’t have this intense of a process refined over a decade. But it’s a good example of how methodical a hiring process should be.

Evaluate their agent retention rate

It’s common for customer service agencies to have internal management issues that lead to poor retention of agents, with 20-30% or more of front-line agents turning over each year.

This can create a tough situation for your brand, as you’ll constantly be training new agents instead of reaping the rewards of long-term outsourcing services.

  • Ask for the turnover rate of front-line agents and the average tenure of management
  • Ask if the agency provides employee benefits, such as sick pay, health insurance, etc.

Great agencies regularly poach the best agents from competitors that mistreat their agents with low pay, poor benefits, and long hours. If you choose a cheap agency, any high-quality agents on your account may get snatched by an agency that treats them better.


Be wary of US managers of overseas agents

It’s common to have customer service teams operate in The Philippines or other countries overseas. However, if most of the middle and senior-level management is not in the same country as the support reps, this can lead to a major disconnect that leads to poor quality.

If you’re talking to a Sales Executive in California who brings in a Team Leader from New Jersey that talks about their great Filipino team (that you haven’t met), that’s a major red flag.

Ask how often the team meets in person for get-togethers. Remote support teams are great, but if they’re not getting together in person the culture is usually pretty weak.

At HelpFlow, our entire team is in the Philippines, including Client Success Manager, Sales, and all other team members. This enables us to hire middle to senior-level people for all roles while keeping costs to our clients low even as we scale.

Competitors with US-based management or sales experience communication and management breakdown as the company grows. This leads to clients paying more than they should for agents that are cheaper and less experienced, which shows up as agent and client retention problems.

Does the agency bring value up front?

The “sales process” you go through with the right agency should feel like a powerful customer service strategy consultation. For example, the agency should be digging into your helpdesk, asking questions about processes, and analyzing your current customer experience to suggest solutions.

For example, they could take a look at your tagging to suggest auto-tags that would make your helpdesk more organized.

Auto-tagging recommendations

Or, if your team already uses Gorgias, the agency should be suggesting ways to improve your team’s speed and your customer’s experience with self-service.

If the agency doesn’t drive the sales process and make you feel like they’re experts that have done this exact dance many times over, that’s another red flag.

Spend time on the training and onboarding process

Once you’ve found a great customer support service to work with, the real work begins. On both ends! The training and onboarding process is the most critical part of the process and a place where things either fall off the rails or start to accelerate and make you realize the power of the team you just hired.

Customer service training

There are a few key things that should happen during onboarding:

Kickoff the onboarding process smoothly

The sales team you worked with should have a smooth handoff process with the account management team.

The agency should ask about the specifics of the project, timelines, quirks of your tools, and details of who’s involved. This process should give the account management team everything they need to know before you actually start working with agents.

Intake key information efficiently for training

The agency should have a robust intake process to get access to your systems and gather a lot of details about your customer service process (but efficiently!). On top of the kick-off call, expect a well-designed questionnaire, an analysis of your tickets, and then a call to discuss their findings.

Conduct robust training for agents

The agency should be able to create and drive through a robust training process for their agents to go through, regardless of your current training process.

Checklist for your customer service training program

Even if you have little to no documentation to provide, the agency should be able to use the accesses provided and intake information to create a robust knowledge base for the agents to use.

Commit to ongoing management for your hybrid team

Once training is complete and agents are up and running, it’s important to maintain a management cadence of the team. This should include monitoring the key metrics we shared above to gauge the quality and capacity of the operation.

In addition, set up recurring working meetings where your team and the agency discuss specific customer service issues and initiatives that can improve the process.

Many brands tend to operate day to day, without intentionally flagging and pursuing longer-term opportunities within teams (especially outsourced teams).

But ongoing management and hybrid structure help your agency up-level your team even further — like expanding your multichannel operation, exploring outbound calls and messages, and more.

So What’s Next? Let’s Audit Your Process

Scaling past your initial core team is tough and outsourcing can be scary. If you get it wrong, it can bring down the brand you built by building an army of angry customers in the market.

But if you get outsourcing right, you can continue to scale up revenue while keeping customer service great — and improving it significantly over time.

HelpFlow is a Gorgias Premier Partner with experience setting up customer service teams for 100+ brands over nearly a decade. At the start of any project, we get deep in the weeds with the brand’s team to audit the customer service process. We share a roadmap that calls out issues and how to resolve them, along with initiatives to improve the customer service operation.

You can get a lot of value by going through this process with us, and we’d be happy to do it with any member of the Gorgias community. Obviously, we include a proposal to work together, but even if you don’t work with us you’ll get a ton of ideas you can implement with your team.

Get in touch with us today to audit your process.


Special thanks to our friends at Gorgias for their insights on this topic.
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