Contact Center Series - Part 4: Partnering Externally

Deciding whether to outsource or build internally

While numerous factors will ultimately influence whether you in-house your contact center or outsource this aspect of your business, the primary driver is how well-defined the team functions are.

In general, if you can break down a team’s tasks into clear steps with relatively limited variability, it’s a great candidate for outsourcing. If, on the other hand, there are more possible workflows with greater variation in how they unfold, then an internal team with more organizational knowledge may be the better choice. In situations where there’s still uncertainty about the exact nature of the work the team will need to perform (e.g., you’re still early in your company-building journey), it’s also typically best to start by building in-house, given the flexibility it enables.

It’s important to note that the internal vs. external decision is not binary. For example, if your company has multiple contact center teams performing different functions, you can choose different approaches for each. Additionally, for teams that are responsible for a variety of activities you can segment the work, keeping more complex and high-value tasks internal while working with an outsourced team for simpler workflows. It is also possible to leverage external teams as a support function, building the primary team in-house and working with an outsourced team for overflow or off-hours staffing.

For example, at Landmark Health, a value-based in-home primary care organization, the contact center team was expected to encounter a wide variety of situations as it reached out to enroll potential patients, who tended to be elderly individuals with multiple chronic conditions. With this in mind, they built the engagement function internally to ensure a high-quality experience and the ability to adapt quickly. At the same time, they outsourced the pharmacy-facing contact center function, given the highly defined nature of those workflows.

Evaluating outsourcing vendors

Once you’ve decided to outsource one or more contact centers, the next step is to evaluate potential partners.

In our experience, most startups are better off working with a small firm than one of the large business process outsourcing (BPO) companies. Not only do smaller vendors often provide more attention from leadership, but you are also likely to see a greater willingness to accommodate the nuances of your specific needs.

Larger players in the contact center space tend to be less flexible, and your startup will have to compete for attention with large enterprise clients. Still, we recommend including at least one large player in your RFP process, as you’ll typically learn from the experience. These larger companies will ask questions about your team and workflows that you may not have otherwise considered, ultimately providing valuable perspective and feedback.

Questions to ask when evaluating contact center partners

A key part of assessing vendors is asking the right questions. We’ve found the following to be particularly useful in assessing potential partners:

1. Can I meet the team that will be working on my account? As with many vendors, there’s often a big difference between the sales team and the team that ultimately delivers the service. Ensure you meet the people responsible for your account, including the team leader and one or two reps.

2. How flexible are they from a staffing perspective? In particular, how quickly can they scale the team up or down? How much notice do they require to make a headcount change? The answers to these questions are crucial to know whether a service provider can keep up with your pace of growth.

3. What is their hiring process? When hiring new team members, will they hire a general pool of people and then assign them to your account? Or will they hire specifically to the requirements of your job description? Can you be involved in the hiring process (or at least have veto power or the chance to review resumes)? Check out the hiring section in the second installment of this series for tips on questions to ask if you’re allowed into the hiring process.

4. What are their typical staffing ratios? How many reps per team lead? Do they leverage senior reps or team members who field contacts and help coach their teammates (aka player-coaches)? What are the typical ratios? (We look for at least one team leader for every ten reps or one player-coach for five reps.)

5. Do they work with similar stage/industry companies? You don’t necessarily want to go to the same vendor as your direct competitors. Still, some BPOs have valuable experiences with early-stage, healthcare-focused organizations or tech-enabled platforms, which can be beneficial.

6. Do they have a helpful perspective on technology? Particularly in the early days, outsourced partners can offer good insight into which contact center solutions might work best for your needs (e.g., CRMs, phone systems). In some cases, leveraging their solution (or, at minimum, their pricing and relationships with other technology vendors) can make sense.

Setting up the contact center contract

While much attention is rightly paid to choosing a vendor, it’s important not to overlook contract design. You go into relationships like these with good faith that the partnership will work well. However, there will inevitably come a time when you must fall back on the contract — so it’s critical to pay close attention to the details.

If you’ve never negotiated one of these agreements before, it’s difficult to know what contractual elements to consider or what constitutes a reasonable ask. From our experience negotiating numerous contact center engagements over the years, here are the key provisions we’d recommend including:

1. Clear performance standards. To properly evaluate your partnership, you must explicitly define what performance standards you expect them to achieve and outline the consequences for failing to meet the expectations — and what the benefits are should the team overperform. It’s also important to remember that, in the beginning, BPOs will react better to industry-standard metrics such as staffing ratios, SLAs, and volume-based metrics. Don’t introduce super niche metrics specific to your business right away; you can layer those in after establishing the partnership. (Check out the third article in this series for more on performance management.)

2. Well-defined options to terminate the contract. Be clear on what enables you to exit the contract and how much notice is required. It can be helpful to tie this to the performance standards. For example, if you cannot remedy underperformance within a given period, you should have the right to terminate the agreement.

3. Pay for agents during training. Most BPOs will allow a lower hourly rate — often 60-75% of your standard rate — for agents still in training. Make sure you ask for this. Also, clearly define what it means to graduate from training. We’d recommend retaining the right to sign off on prospective graduates to ensure you only pay for effective team members.

Managing the outsourced contact center team

If you have decided to outsource your contact center, it’s tempting to assume you are also fully outsourcing the job of managing that team. However, one of the biggest mistakes we see when using outsourced contact centers is being too hands-off. The effectiveness of an outsourced team is much like an internal team and correlates highly to how much guidance and oversight you provide. Managing a team not integrated into your business’s day-to-day often requires extra effort.

With this in mind, we strongly recommend identifying a specific person on your internal team to manage the vendor. This may be a full-time job if the outsourced team is sizable enough. In practice, the internal vendor manager is responsible for making sure the following are going well:

• Hiring

• Onboarding and training

• Performance management – including quality and efficiency metrics

• Issue management

• Business management – including the weekly business review

• Change management and retraining

Having a designated vendor manager not only helps you ensure the outsourced team is meeting expectations, but it’s also beneficial to the vendor, ensuring they have a point person to interface with whenever a question or issue arises — ultimately leading to quicker resolution of problems for all stakeholders.

Dedicating a staff member to managing an outsourced team may seem counterintuitive, as it eats into the cost advantage of this approach. Nonetheless, it is still almost always worth it. Given both the impact a manager has on improving the vendor’s performance and the additional benefits using an external vendor provides — including more flexibility to quickly scale the team up (or down) and reduced management overhead — you will want to task someone with this job.