Did you know that 90% of American shoppers focus on customer support when doing business with a brand? This number proves the value customer support teams bring to the e-commerce industry.
The demand for e-commerce is booming. Making a good first impression in a business like e-commerce isn’t enough. To remain competitive, companies must also consider what will drive profitability, customer loyalty, and retention in the long run.
We recently interviewed our Chief Financial Officer, Laresa McIntyre, to talk about the cost differences between in-house and outsourced support, and she said:
“High-quality customer support can lead to positive reviews and word-of-mouth referrals that drive new customer acquisition without heavy marketing spend. It’s important to realize that robust customer support is not just a cost center but a strategic investment that enhances revenue and profitability.”
Customer Support: The Fuel for Your Business Success
Investing in solid customer support is a surefire way to stay ahead in such a fast-paced consumer market. It’s always best to remain consistent and innovative with your services, so building a dedicated customer support team should be at the top of your priority list.
Your customer support team is your consumers’ closest contact with your business, and they are directly responsible for providing consumers with the support they need.
There are two ways to build your customer support team: 1) develop your team in-house team or 2) outsource your customer support.
It can be a tough decision with many considerations, including the ability to scale, access to specialized skills, and the technological infrastructure you need. However, the costs involved will likely be your primary deciding factor.
How much does it cost to build an in-house team compared to hiring an outsourced team?
To answer that question and help you decide what’s best for your business, let’s compare the costs of in-house vs. outsourced support.
Maximizing Cost Efficiency: In-House vs. Outsourced Support
Determining which customer support model works for your business involves understanding their costs. This blog will cover the key cost components of building a customer support team.
In our recent interview with Laresa McIntyre, she enumerated four critical expenses involved in building a customer support team:
1. Personnel Costs
Hiring and compensating team members is one of the most significant expenses of in-house customer support.
The annual salary for customer support agents in the US ranges from $40,000 to $50,000, depending on the state. Other aspects, such as employee benefits, payroll taxes, and insurance, can add to this cost. These added costs make hiring and compensating an in-house team expensive, especially for startups or small and medium enterprises.
Outsourcing, on the other hand, has lower fees.
Outsourcing partners typically operate based on different pricing models. For example, Business process outsourcing (BPO) providers often base their service fee schemes on time spent on support tasks, performance, or fixed monthly rates.
2. Technology and Infrastructure
A customer service team can’t function without the necessary technology and tools.
You should consider investing in the right technology for your customer support team, including software that supports operations (e.g., CRM systems), which can start at an annual cost of $15,000.
Managing this aspect of customer support in-house starts with building from scratch and acquiring these technologies independently.
Outsourcing partners eliminate this cost since they already have access to all the necessary tools. Partnering with a BPO provider removes the hassle of procuring and maintaining operational tools and tech.
3. Operational Costs
You have your team and the technology to support them. What’s next?
Your customer support team will need a base of operations to carry out their tasks.
Operational costs are also critical in customer support, including rent or leasing expenses for office spaces and utilities. It also includes purchasing and maintaining supplies essential to your team’s day-to-day functions. All these can add up to $25,000 every year.
Partnering with BPO companies can reduce the load from operational costs because they already have dedicated service centers.
4. Quality Assurance and Training
Another critical thing to consider when building an in-house team is quality assurance and training. Ongoing training is necessary for any customer support team because it ensures they have the skills and knowledge to deliver consistent support.
Investing in a comprehensive training program is equally demanding and essential. Developing your training and development program can cost between $10,000 and $20,000.
Meanwhile, outsourcing can reduce training times and expenses since the right BPO partner should already have a solid background in customer support. Their experience makes them capable of delivering a more exceptional training program than in-house teams.
In-House vs. Outsourced Support Costs: Which One Offers More Value?
“E-commerce businesses often face high volumes of support inquiries, especially during peak seasons like the holidays, that require scalable support solutions. MLM businesses, on the other hand, deal with relationship management between customers and independent distributors. These situations need tailored support strategies, which can drive up costs. But they also present opportunities to streamline processes, leverage automation, and use data analytics to enhance support efficiency and reduce costs.”
– Laresa McIntyre, ClearSource Chief Financial Officer (CFO)
Whether you build your customer support team in-house or through an outsourcing partnership depends on what best fits your business objectives. Both customer support models have advantages and drawbacks. Choose the model that’s more aligned with your priorities.
In-house customer support will bring you a dedicated internal team to train. This approach dramatically benefits communication since your team knows your business structure and protocols. However, an in-house approach’s major setback is that it demands significant time and investment.
We recommend an outsourcing model for driving cost efficiency. This model can benefit businesses that need more resources to build from scratch. With an outsourcing team, you can hit the ground running without the burden of expensive overhead costs.
E-Commerce Customer Support: Cutting Costs, Not Quality
“In-house customer support models are perceived to offer greater control over service quality and brand alignment, but they come with higher fixed costs because you now have to worry about salaries, infrastructure, and training. On the other hand, outsourced models provide cost flexibility and scalability, allowing businesses to manage support costs more effectively during peak times.”
– Laresa McIntyre, ClearSource Chief Financial Officer (CFO)
ClearSource’s cutting-edge solutions have brought success to its partners for years. We design our services to be a one-stop solution for our partners in the e-commerce and multilevel marketing (MLM) spaces. This level of coverage has enabled us to grow and innovate with our partners in navigating their competitive business landscape.
We don’t believe in cutting corners when it comes to customer support. Our solutions are flexible enough for our partners to scale, and our training programs ensure our people deliver consistent, exceptional service.
Learn what makes us the perfect outsourcing partner for your e-commerce customer support. Contact our team today!
