Why You Should Outsource Customer Services to the Philippines

Customer service is one of the first tasks that was outsourced to remote locations. It is an important area for many businesses especially in this day and age of the Internet where people have more access to information. Businesses are also aware of the influence of social media. One viral post or share on bad customer service can negatively impact the profitability of the business.

Businesses also know that the Internet and social media have made consumers more accessible to their competitors. One slip up can create an opening for a competitor to come in and steal valuable paying customers or subscribers. In a highly competitive business environment, success is not just about creating new customers but retaining old customers.

Your existing customer base is also a potential market for new sales. You can get recurring business from your customers if you take good care of them.

But as important as customer service is, many business prefer to outsource it rather than host an in- house department for a number of reasons:

Lower Costs

If a business sets up its own customer service department, it will incur additional expenses on payroll, benefits, Internet bandwidth, rent and utilities.

By outsourcing customer support services they can capitalize on comparative advantages in costs particularly labor. When you outsource, you contract third party service providers that will be responsible for the salaries and benefits of all the agents plus other costs of business.

  • Improve Quality of Work – Customer service is an integral component of business but it is more of a support function. It is not part of the company’s core competence. It is unlikely that a company will invest resources to train, develop and build customer service.

But there are outsourcing companies that specialize in customer service. They have invested resources in training, developing people and in setting up the infrastructure to run excellent customer support services. If you find the right provider, you can feel more confident of how your customers’ inquiries, concerns and issues are being addressed.

  • Increase Productivity – Of course, by delegating these non- core tasks, a business can allocate more focus and attention on their main enterprise. The cost savings that are generated can be used to fund revenue generating programs.

When it comes to maximizing the opportunities of outsourcing customer services, the Philippines comes to mind.

Since 2014, the Philippines has been the consensus number one choice for global outsourcing. The Philippines’ outsourcing industry has been growing at an annual rate of 20% since 2003. It is estimate to generate US$25 Billion in export receipts in 2016 and US$48 Billion in 2020.

One of the major reasons for the ascent of the Philippines in global outsourcing is its success in managing customer service campaigns.

There are 5 good reasons why the Philippines is the world leader in customer service and why you should consider the country to oversee your customer retention programs:

1. High Literacy Rate

It may have taken more than 70 years but today, the Philippines at 98% has one of the highest literacy rates in the world. It took a concerted and focused effort throughout the last few decades to bring up the literacy rate from 20% in the 1930’s to where it is today.

95.4% of children are able to undergo grade school education and the government’s Department of Education has consistently introduced programs to have education available to all citizens. These programs include night school and subsidized education plus alternative learning systems for out- of – school youths.

2. High Level of English Proficiency

Although the Philippines’ national language is Tagalog and it is home to multiple dialects, English remains its primary medium of instruction in business and schools.

In 2012, software maker GlobalEnglish conducted a survey which showed the Philippines as number one in Business English. The Philippines was ranked higher than the United States and the United Kingdom.

The reputation of the Philippines as an English- speaking country can be seen with the increasing influx of people from South Korea, Japan and Taiwan signing up Filipinos to teach them English.

3. Cultural Melting Pot

The Philippines has been a colony of many countries. It was a colony of Spain for 300 years from where most of its traditions and practices originate. The Philippines also became a colony of the United States and Japan.

Not many people know that for a while the Dutch were predominant foreigners in the Philippines. Of course, over the last several hundred years the Philippines has been a major trading partner of its Asian neighbors. A big part of this is its location in the South China Sea; being surrounded by water.

Thus the Philippines’ culture has become a melting pot of different mores and values. It has inherited practices, traditions and institutions from the different countries that colonized the archipelago.

Filipinos can adapt to any culture. They have been highly influenced by Western culture yes; but they are also familiar with the culture of other countries as well.

4. Great Work Attitude

Filipinos are hard-working people. But more than that they have a great attitude toward work and are generally very respectful.

This is because the Filipino has very close family ties. They have been taught to be respectful to their elders and to give courtesy to other people. They are also very spiritual.

There are 100 million Filipinos and around 81% are Catholics. Majority of their belief systems are deeply rooted in Catholicism. They are grace under pressure; even in the face of irate customers, Filipinos maintain their composure and continue to treat everyone with respect and courtesy.

5. Low Wage Rates

The average wage rate in the Philippines’ outsourcing industry is US$1.50 per hour. In North America, Australia and Canada the average worker gets paid anywhere between US$16 to US$20 per hour.

The rate covers wages of the basic entry level agent. Supervisors and managers get paid between US$3.50 to US$7 per hour. These rates are even well below the minimum wage rates of developed countries.

In fact you can hire full outsourcing services for customer support for US$9 to US$12 per hour. The rate includes payroll, benefits, rent, primary and secondary Internet services, utilities and contingencies.

Thus, by outsourcing customer support services to the Philippines not only do you save a significant amount of money but you can be assured of the culture and talent to render quality work.

Excellent customer service is more than just having the requisite skills and proficiencies to achieve benchmarks and established metrics. It is about the right attitude, personality and behavioral patterns to help customers find resolution to all of their concerns within an appreciable period of time.

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