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BPOs: Embrace Digital Customer Service to Survive & Thrive
By Chris Filly, VP of Marketing, Callvu

Almost as long as there have been call centers, there have also been Business Process Outsourcers (BPOs)--contract companies that deliver those services for companies hoping for simpler operations, lower fixed costs, and better customer outcomes. 

BPOs are an integral part of customer service today, but I’d argue that their relevance is waning as companies explore digital alternatives to live agents. While digital can’t replace all human-led interactions–at least not yet–BPOs face a future in which their clients deflect more customer interactions to digital tools that cost less and sometimes drive better CSAT. That said, most organizations are seeking help from trusted CX experts to develop these capabilities. To remain competitive and deliver value, BPOs must embrace digital and integrate digital into their offerings.

Here’s why this evolution is essential and how BPOs can enhance revenue and profit by making digital solutions a competitive advantage. 

Why Digital is a BPO Must 

It’s an increasingly digital world, and customers expect more and better digital solutions every day. That’s only going to get truer over time:

1. Many customers prefer digital self-service: Customers increasingly prefer digital over phone-based support.  According to Zendesk research, 67% of consumers prefer digital self-service over human-led support. Whether finding answers to simple questions, tracking orders, or resolving basic issues, consumers value the speed, convenience, and autonomy that digital self-service provides.

2. AI and automation are making human support less necessary: Sophisticated chatbots, digital micro apps, and online knowledge bases can now handle many customer inquiries with remarkable accuracy and efficiency. Large Language Models (LLMs)  and other AI tools improve daily. 

3. Digital micro apps and AI chatbots serve customers at a fraction of the cost of live support–even live support delivered from less developed countries. As with everything in life, it’s all about the Benjamins. Digital solutions are cost-effective and offer personalized experiences, learning from each interaction to deliver increasingly relevant and tailored support. Whether the tools they use are purchased on a time-based subscription or a cost per interaction model, companies pay far lower costs for digital support. Once people can solve their problems digitally, companies won’t want to pay more to address them with your people. 

4. Digital is more than self-service: Digital tools can automate many processes that agents perform manually over the phone. For example, an agent can send a link to a digital micro app via SMS during a call and then co-navigate the experience to speed up average handle time (AHT) and increase first-call resolution (FCR). Many digital self-service experiences can also do double duty to shorten agent-led calls and enable you to maintain or grow margins. 

Digital as a BPO Competitive Advantage 

BPOs must become experts in deploying and managing digital self-service solutions. They need to offer their clients cutting-edge technologies and strategies that go beyond what companies could achieve on their own.  This requires investing in the latest AI-powered tools, developing customized solutions, and providing ongoing support and optimization.

The silver lining is that digital self-service can give savvy BPOs a competitive advantage over internal self-service development and other BPOs that choose not to innovate. A recent Gartner survey revealed that just 14 percent of customer service and support issues were fully resolved by a company’s self-service channel. That’s not an indictment of self-service but rather of how most companies are (failing to) execute it. 

BPOs could do much better by amortizing the costs of sophisticated digital micro apps and AI agents across multiple clients.  This will allow them to offer affordable access to the most advanced technologies. 

Build or Buy Digital Customer Service?

When companies pursue a digital customer service strategy, they must weigh the pros and cons of building versus buying the technology. 

Companies that choose to build do so for a sense of control and a perception that they can create something uniquely better. This may be a valid consideration in highly specialized software categories, but the tasks in customer service tend to be fairly standard across many companies. For example, paying a bill requires inputting a payment method and authorizing the transaction. That experience can be optimized through great design and a conscious effort at simplicity, but its common core components are what they are. 

Buy-oriented companies see lower implementation and ongoing costs, faster development, and ongoing operational efficiency as highly compelling. By finding a platform or services company that can deliver a quality solution, they get to market more quickly and start delivering value to their clients. Fortunately, BPOs are well-versed in the “buy” advantages–their businesses depend on delivering better value through outsourcing! 

That said, BPOs must work diligently to create superior experiences using the partners and platforms they choose. BPOs know how to do this very well. At their core, all outsourced call centers operate on very similar tech. It’s how you use that tech and shape it to client needs that enables one BPO to win and keep business in a crowded industry. 

In digital customer service, two of the most developed areas are AI chatbots and digital micro apps. Each market has multiple providers able to deliver customizable experiences for most customer service needs. By choosing providers with expertise and flexible tools, BPOs can create differentiation more quickly and cost-effectively. 

The Time is Now

I believe investing in digital self-service is essential for BPOs to remain competitive and relevant. Those that resist evolving risk being left behind as customers increasingly turn to alternative providers that offer robust digital channels and AI-powered solutions for their support needs.

BPOs must act decisively to embrace digital transformation, investing in the latest technologies, developing new skills, and reimagining their business models.  Doing so can deliver exceptional customer experiences and value that their clients reward with profitable long-term business.