5 Points to Consider When Outsourcing Customer Success

Key Insights

• With digitization opening more avenues than ever for customers to make a choice, it’s crucial for businesses to stay on the pulse of customer experience
• Creating a culture and practice of customer success is easier to brainstorm than execute
• While many business ventures might still be averse to outsourcing this particular customer-facing function, there are clear benefits to doing so
• These range from a deeper understanding of the customer success space to industry-leading methodologies to execute customer success goals

Customer success may be a relatively new term but growing customer expectations have solidified its significance to revenue growth and long-term success.

A report by Forrester highlights that customer success is on top of mind for many businesses, with 72% reporting it to be a priority.

In particular, the COVID-19 pandemic drove home its importance in protecting relationships with existing customers.

As the economic fallouts of the pandemic unfolded through constrained budgets, shifting business priorities, and disrupted operations, companies realized that a continuous race for the next sale was not sustainable. More important was nurturing the existing customer base beyond the point of sale.

A visible aspect of this shift is the value of trustworthiness in ensuring customer loyalty.

So should you outsource customer success? To answer this question, one must look at what customer success does for an organization.

What are the Benefits of Customer Success?

Focusing on customer success involves tracking different kinds of value provided to the customer. A research by Deloitte identifies three types of value that constitute customer success: performance value, business value, and experience value.

In the B2B world that we are in, getting the signature on the dotted line is only the beginning of the journey with customers.

• Customer Retention: Renewal decisions are based on perceived value. When you focus on customer success, you help your customers realize more value in your products and services. This leads to increased renewal rates and longer customer tenures, both of which increase a customer’s lifetime value and help you drive growth and profitability.

• Increased upsells and cross-sells: As per a report, vendors are 60-70% more likely to sell to existing customers rather than selling to new customers. Existing customers are also more likely to have undertaken integrations that maximize the value to be drawn from greater engagement with related products and services. It is precisely this advantage that customer success secures by increasing the likelihood of customer satisfaction.

• Operational Improvement: Focusing on customer success increases customer predictability. It gives you insight into developing issues. It will also help you uncover drivers of that outcome, which will help you with recurring revenue predictability and capacity planning.

• Increased Revenue: Customer success is not just for keeping revenue in the business. It also helps generate more revenue at a lower cost. Customer success provides a mechanism for not only creating these chances but also capitalizing on them.

Why Should You Outsource Customer Success?

It might make more sense for you to outsource more transactional engagements such as customer service or customer support rather than outsourcing a long-term, relational role like customer success.

What is important is to acknowledge that outsourcing customer success does come with its fair share of challenges. Despite these challenges, however, outsourcing key customer success activities can contribute in several ways to revenue and growth.

1. Cost Savings

An obvious advantage of outsourcing is cost savings. But this advantage is often misperceived as resulting from hiring low-paid offshore customer success representatives.

Such misperceptions only take into account the salaries as part of the costs of building a customer success team. But there are numerous other hard and soft costs such as facility, equipment and technology, travel, recruitment and training, and management costs.

By outsourcing all or part of the customer success function, companies can save on operational costs related to onboarding and training, renting and maintaining office space, management costs, and investing in the latest tools and technology stacks.

2. Skilled Representatives

When you have an in-house team, it can take months or even years to build the kind of high-quality team you have in mind for long-term success. While it might look rewarding, you are putting years of resources and thousands of dollars into building such expertise.

With outsourced customer success, you receive a top-notch crew whose sole responsibility is to provide excellent customer support. Such a team is better equipped to ensure that there is no lag in customer experience.

3. Access to leading technologies

A 2021 report by Talkdesk highlights that while customers want to talk more and for longer, they are not willing to wait on hold for longer than a minute.

Reputable outsourced customer support vendors understand this shift.

An outsourced customer success team will ensure that processes are in place to reduce average wait time (AWT). They have dedicated QA auditors to coach agents on how to minimize “dead time” between calls.

4. Effective Management

An in-house team can cater to high-value customers. However, real growth requires customer success at scale, catering to all segments of customers.

Most companies are likely to have a large segment of long-tail customers who cannot be converted into high-growth customers because of a lack of bandwidth among in-house customer success teams.

Outsourcing the long-tail customers can help organizations move beyond an 80-20 trap in their revenue generation and grow a much larger base of valuable customers.

5. Focus on Core Competencies

Customers are the key to success for any organization. Nevertheless, customer support may not be one of the core competencies of your venture.

Outsourcing customer success can help you focus on what your company does best, without sacrificing customer satisfaction in the process. And this can happen without a huge upfront investment of resources.

Finding the Right Outsourced Customer Success Partner

Pearsons’ Marketing Metrics: The Definitive Guide to Measuring Marketing Performance shows that the probability of selling to an existing customer is up to 14 times higher than the probability of selling it to a new one.

By bringing an outsourced customer success team, you are better equipped for future growth. The sooner you establish a reliable partnership in this important business segment, the easier it will be for you to master future challenges.