Can you outsource customer service?

Just a question that occurred to me: Can you outsource customer service?

Outsourcing of business processes is becoming more and more prevalent. But the logical extension of this is that you can outsource your customer facing processes. After all this is what call centres do. So the question arising from that is 'Can you outsource customer service?'

Sure you can outsource the service function. But is this outsourcing the service?

I posted this question on a number of BPM/ process related forums. Here are a selection of the replies I received:

    “Customer Service is often the only ongoing communication/customer touch point. The thought of outsourcing such a critical interface for cost considerations ranks slightly lower than the decision to cease business”

    “Generally speaking if it contributes to the achievement of a Successful Customer Outcome then go for it. I do however agree [that] the decision is usually taken with blinkers on when organisations think of just the cost equation on a short term basis”

    “I used to compare the management of outsourced customer service to driving a remote-controlled car in another room where you can't see it. You press the controls but aren't always sure how they are being responded to on the other side”

    “Broad brush, 'customer service' would be very low on my priority list to attempt to outsource; as a concept I think it would be quite difficult to achieve if indeed it was beneficial to do so”

    “There is no difference between outsourcing a Business Process and one of those processes that may happen to be providing customer service.”

    “If outsourcing is part of a single-value-for-the-company-creating-strategy (ergo: cost-reduction) you are bound to loose. Companies that pursue these strategies often act as if they are outsourcing the responsibility for service to their Customers as well. This should never be the case”

    “If you outsource the part that is supposed to keep customers who are having problems with YOUR product or the product YOU sold them, you may well be outsourcing your next sale to your competitor”

    “Simplisticly put, NO. If you do, you customer is doing business with your outsource, not with you. Why not just sell them (the outsource) your business outright, and let them have full responsibilty?”

What is interesting is that there does appear to be a diverse set of opinions on this. As usual some of this is down to interpretation of the original comment. In a literal sense of “Can the contact with an end customer be outsourced to someone who is not in your organisation?”, the answer is obviously ‘yes’ (Call centres are the example already mentioned). But in the stricter sense of ‘Can an organisation effectively pass the responsibility for managing the customer facing service element of it’s business to a third party?’, it would appear that the answer is ‘probably not’. Or ‘Yes, but with caveats’. My favourite comment was the one about ‘The thought of outsourcing such a critical interface for cost considerations ranks slightly lower than the decision to cease business’. This same individual further went on to say ‘We only outsource those things that are not critical to our core technologies and never outsource customer contacts of any kind’. Hear, hear!

I would maintain that you cannot outsource customer service. This is in the same way that you can delegate a task but not delegate the responsibility for the task. If I am a manager and I have been tasked with providing a report by a certain date and I sent the report to someone else to do - even though I have given them full authority to act on my behalf - if the report comes back and is of a low quality then I am still responsible for the report. This is regardless of the fact that I have delegated the writing to someone else. In the same way if a customer is dealing with your company and they contact you with a problem, it is your companies responsibility to give them appropriate customer service. If you have chosen - as a company - to delegate or outsource the call centre function, and that call centre provides inadequate or inappropriate customer service - then the responsibility for that is still yours. When you take this in the context of the quote from Peter Drucker, "The purpose of business is to create and keep a customer.”, it does seem to make sense that outsourcing the customer service is a bad idea. Especially if done purely for cost reasons. As a number of respondents have indicated, if you are looking to outsource that part of the business to a third party you may just end up outsourcing your customers to that same third party.

But are there times when this could be done? Can we think of circumstances when outsourcing the customer service function is not to the detriment of the company? Yes, of course. But these are rare exceptions. Ryanair, for example (A company held up as a paragon of ‘Outside-in’ thinking by those in the know) has appalling customer service. Customers are treated as inconveniences at all points, more so if they - heaven forbid - are trying to get a refund or reimbursement from the company. But Ryanair does know it’s customer base and they work on the basis that their customers are after the cheapest fare possible and will put up with a lot of crap to achieve that. Part of that crap is poor customer service. In this case outsourcing the customer service may even improve it, but Ryanair has chosen not to do this, although they could do this with no loss of customer base.


I asked at the start of this article if customer service could be outsourced. Opinion leaders and others have chimed in with various thoughts and comments, some in favour, others not. The Outside In view espoused by practitioners of that concept is that you can successfully outsource customer service if it contributes to the achievement of the Successful Customer Outcome, otherwise it is a no-no. The alternate view of that is that customer service outsourcing is effectively outsourcing your customers to a third party which is a bad thing. If they do it well they could get your business, if they do it badly they end up losing you business. Overall the general feeling is that it can be done but it shouldn’t be done, but with exceptions - a view I tend to agree with.

What are our thoughts? Leave a comment below and let me know.

Thanks to all the folks on the various business process groups on Linked In who contributed to this discussion.

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