How Much Does It Cost to Outsource Customer Service?

Running an in-house support team can be effective, but it’s often difficult and costly to maintain the right agents at the right time to meet customer demand. That’s why many businesses decide to take a chance at differentiating customer service with a flexible model, including gig-based and offshore support teams.

Still, the biggest factor in this equation is the estimated outsourced customer service cost. Naturally, not all companies in that field offer the same level of service, and pricing varies widely. In this guide, we’ll shed some light on the estimated costs you can expect, as well as on the factors that dictate vast pricing differences.

What Affects the Cost of Outsourced Customer Service

There’s more to outsourced support pricing than just basic "per agent" rates. Sure, there are still companies offering this payment model, but it’s gotten quite outdated. In most cases, these factors determine the pricing:

• Location: The primary element to consider is the location/area of the outsourced support team. For instance, hiring a company with local, US-based agents might cost more than going for a fully offshore one.
• Support type & complexity: Basic Tier-1 support, like answering common inquiries, costs way less than complicated technical troubleshooting and product-related support. To get the best value, consider your support needs and their complexity. 
• Support volume and availability: Another key thing to factor in is the overall volume of expected support tickets and inquiries. You should also inquire about the working hours, as services with 24/7 availability usually cost more.
• Pricing model: With outsourced customer support, you’ll rarely be looking at a fixed "per-agent" price. You’re more likely to run into agencies charging per hour, per ticket, or even per minute. If you don’t know how much availability you’ll need, per-gig or hybrid models are also worth considering.
• Service add-ons: Finally, you should check potential add-ons, like direct integrations with quality assurance or CRM platforms.

Typical Cost Ranges by Region & Model 

To answer the burning question of "how much does it cost to outsource customer service?", here’s a quick rundown of the rates you can expect based on some common locations:

• Offshore operations: In most cases, offshore models offer competitive pricing, typically ranging between $6 and $15 per hour. Of course, the rates depend on the exact location, and these are the estimates we pulled for regions like India, the Philippines, and Asia in general.
• Nearshore operations: Using nearshore support in emerging markets like South America and Eastern Europe comes at a slightly higher cost, usually between $10 and $20 per hour. This also depends on factors like support language and flexibility, but you also get a higher quality of service compared to offshore operations, at least in most cases.
• Onshore support: Some outsourced support agencies work with on-site agents familiar with the local culture and consumer type. Traditional onshore support typically costs between $25 and $60 per hour, reflecting higher labor and overhead expenses. For instance, ShyftOff relies on local support experts with next-generation customer service outsourcing solutions like AI insights, on-demand availability and billing, and detailed customer satisfaction scores. But by charging only for productive hours, ShyftOff is on average 35% to 55% less expensive than traditional onshore support, while still delivering high service quality.
• Pricing models: Some providers also offer alternative pricing models, such as billing per call, per minute, or per successfully resolved ticket. You should expect to pay between $3 and $9 for each resolved ticket.

‍Caution: Please note that these are just estimates and examples we've included to help you figure out the average costs. True figures vary significantly based on the factors considered above, including support type and volume.

Hidden and Additional Costs You Should Budget For

Regardless of the model a company might use to charge for outsourced support services, there are always some costs that are initially unaccounted for. They all add to the total price of the service, and these are the most common ones you should know about:

• Technology and software licenses: If the service also offers integration with help desk platforms, CRM solutions, or ticketing systems, you might have to cover the licensing costs. Some vendors include it in the pricing, while others leave it up to you to decide if you wish to use and pay for such extras.
• Onboarding and training tools and costs: To get a native quality of support service, you might also have to invest both time and money in onboarding and training tools. Think about preparing detailed documentation, guides, videos, and programs for the support team to follow. This especially adds to the price if you need advanced technical support with higher ramp-up and training costs. With ShyftOff, onboarding and training are included, and customers are not charged separately for these activities.
• Compliance and data security: If you’re working in regulated industries like healthcare, you’ll also need to pay extra for compliance and licensing, as well as data security tools. For instance, European-based businesses need to keep up with their GDPR compliance and documentation, which might incur some additional costs.
• Management coordination: Another unexpected expense that you might have to factor in is having a dedicated professional to oversee the outsourced support performance. This includes full-time performance monitoring, customer satisfaction score reviews, and reporting tools. With ShyftOff, management coordination is included in the platform and does not incur additional charges.
• Scalability costs: If you’re using a flexible service like ShyftOff without any precisely-determined hours, you can scale up the support efforts during peak season. Naturally, that would lead to increased costs depending on your needs. However, ShyftOff does not charge additional fees for scalability itself, as this flexibility is built into the platform.

Common Pricing Models: Pros and Cons

If you want to pick the best customer service outsourcing solution optimized for cost and quality, you need to consider both the positives and the potential drawbacks. Make sure to weigh all the available options and choose the one that delivers the most value to your business. 

In general, we’d focus on these pros and cons of the common pricing models:

• Per-hour or per-agent: This approach is the industry standard, and it usually includes a flat hourly rate. While it’s good for predictable budgeting and building long-term customer relationships, it has a fair share of downsides, such as paying the same amount regardless of ticket volume.
• Productive-hour model: Used by platforms like ShyftOff, this model charges only for the time agents spend actively handling customer interactions, such as waiting in the queue, being on a call, or completing after-call work. It does not include costs for breaks, lunches, training, or upskilling, making it a more cost-efficient option for teams that want flexibility without paying for idle time.
• Per-ticket or per-resolution model: Paying per ticket or per resolution might make more sense for businesses whose customer interaction volume fluctuates significantly. On the flip side, this may lead to unreliable providers rushing through the simplest tickets and leaving complex inquiries unattended. It’s ideal for high-volume inquiries that are typically Tier-1 or similar in terms of complexity. 
• Per-minute or per-call model: This is a great option for boosting flexibility based on demand, so you won’t have to pay a fixed rate when customer traffic is low. Still, it might lead to unpredictable monthly costs and limited scalability. As a result, we’d recommend this model to startups and businesses with seasonal variations.
• Fixed monthly fees: If you’re looking for the safest option, paying a fixed monthly fee makes sense. The only scenario where it wouldn’t be a good solution is if your customer interactions were to suddenly drop. Generally, it’s perfect for businesses with fixed support lines.
• Hybrid models: Hybrid models are great for balancing cost and quality. They are a solid solution for companies expecting customer support volume changes, but they may come with complex, long-term contracts.

In-House vs. Outsourced: Cost Comparison

As you can see, the cost of using an outsourced support system varies widely depending on the model, location, add-ons, and other factors. Even so, it’s a more affordable option for most businesses since the same quality of service would require at least a few full-time in-house support staff members. 

Think about it: if you employ several support representatives, you’ll need to pay their full salaries, benefits, and potential bonuses. You might need a dedicated customer support manager or an HR specialist with years of experience, as well, to work with the support team and develop training programs. Not to mention you’ll need dedicated infrastructure investments in hardware, software, and workspace. 

However, with outsourced support, you can cut all those costs in one hit. Even per-hour or per-minute models usually result in way lower annual investments, especially if you’re using nearshore or offshore agents. Training costs are often included in the price or, at the very least, manageable. In total, you can expect cost reductions between 40% and 70% when using outsourced support.

Final Thoughts: Outsourcing Is Not Just a Cost - It’s a Strategic Investment

Every successful businessman knows that a single dollar saved is a dollar added to potential ROI. Still, going for the lowest-priced service may not be the best decision for your company or its customer relations. 

It’s not just about the money saved, but rather the potential to grow as a business with an army of satisfied, loyal customers. You should think of the outsourcing costs as just one side of the coin, with quality assurance, scalability, and flexibility making up the other.

Hiring a renowned outsourced support platform like ShyftOff will enable you to review performance during the pilot period and decide if this approach is right for your company. Remember, you're the one paying for the service, so it’s not worth the investment unless you receive the same or higher level of support as you would with an in-house team, but at a fraction of the cost.