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Justin Neale

The Customer Support Dilemma: Insource, Outsource or Hybrid?

Updated: Aug 1, 2023

At some point in a companies’ growth this question normally gets asked:

Question mark

Startups often begin with no dedicated customer service team and rely on product or sales team members to perform dual roles. At what point do you make the decision to build a dedicated support function and what is the right support model to choose?


The answer to the first part of the question is relatively easy, as soon as possible! It can be critical to keep costs down during the startup phase of any business but if you have customer support queries coming in, then it is best to get the right structure in place quickly. The risk of not doing this is that you slow down your growth by diverting energy and time from other key team members, as well as upsetting those early adopter customers you have fought so hard to win.


The answer to the second part of the question is a little harder. I do give my opinion later in the article but for now let’s take a step back and look at how a traditional customer support organisation is structured.


For medium to large organisations, there will often be multiple levels and they typically follow this model that looks like an inverted pyramid:


Traditional inverted pyramid support model

Level 0: is your self-service resources that you make available to customers. Knowledge base, chat bots etc.

Level 1: are support team members that triage tickets that come through, answer the basic ones and transfer the rest to Level 2 support team members. They are typically following a script and have well defined cut-off points where they need to handover a ticket.

Level 2: are your expert support team members, they know your product and services well and can answer or resolve the majority of tickets.

Level 3: are team members across your organisation who may need to be brought in to provide input on complex or non support topics. Things like software bugs, invoice issues, sales enquiries or other technical requests.


Smaller organisations tend to have a flatter structure and it is often the equivalent of just Level 2 and Level 3 team members. Level 0 / Level 1 may not be in place as ticket volumes don’t demand Level 1 and building out a knowledge-base plus self-service tools take time and there are often other business priorities.


It should also be noted that in my experience very few organisations, even the larger ones tend to have good Level 0, self-service resources for customers.


Focusing on the medium to large organisations for now, you can see why there is a trend to outsource support, primarily at Level 1. Your business is growing and the volume of tickets coming in is also growing. Many of the questions are relatively basic and your own experienced team members don’t want to deal with them.


An outsource partner can help take this problem off your hands and provide call centre and online responses for all the basic customer issues coming in. They will often help build the run-books needed and can quickly scale or contract as your business needs demand.


Sounds good doesn’t it?


Let’s now look at the flip side of the outsource model. The support organisation is often the face of your business. Once a customer has purchased your product or service, these are the people you will be relying on to keep those customers happy. Depending on your industry that customer relationship could last for years with recurring services, up-sell , repeat purchases etc.


Will the outsource partners team members really be the advocates for your business that you want? Probably not.


The reason is motivation and engagement. When you invest in your own team members and have a strong company culture, people will go the extra mile. If someone is instead incentivised to answer a certain volume of tickets a day or to follow a script perfectly then you will get very different outcomes in terms of customer satisfaction.


Some organisations go even further and outsource their Level 2 support. This invariably means that you are losing critical knowledge from your organisation and can make it extremely hard in the future to change parters or to implement a different support model. You are losing a lot of control over your business. Also remember that your support team members are one of your best sources of internal talent for future roles. After all, they know your products and customers intimately as well as understand what needs to be done to improve the customer experience.


So back to the original question, what is the right support model?


I would always advocate for businesses to retain as much control as possible and to own the customer experience. I believe that it is time to challenge the legacy support model that many organisations follow and to instead move to a flatter, simpler model that the smallest to largest organisations and companies can all adopt.


This model still looks like an inverted pyramid but we remove Level 1 completely.

In an ideal world, customers would never need to contact support but when they need help, enable them to do as much of it themselves as possible via extensive self-service resources. This should be where the majority of queries can get resolved without customers ever having to raise a ticket or make a call.


Simplified inverted pyramid support model

The next level down is now your support experts or those who would have been called Level 2 support in the old model. If a customer needs help then put them in touch with an expert who can resolve their problem immediately, not someone going through a script or who is incentivised to finish the exchange as quickly as possible.


The final level is still the wider organisation as there will always be queries that require specialist knowledge or expertise. The volume of topics reaching these individuals should be low and enable them to focus on their core activities.


You may well wonder how the support experts don’t get overwhelmed with issues or if this will result in building out a huge expert support team? The opposite is the reality. Your support experts constantly work with their colleagues across the business to identify common customer pain points or queries, find ways to improve the product or provide new self-service resources to reduce the number of such queries hitting the expert team. Customer Journey Mapping is used extensively to make this a reality.


This model results in high levels of customer satisfaction and it drives continuous improvement in your products and services. You can expect to see higher CSAT and NPS scores, reduced customer attrition rates and improved market share as your existing customers will be your best sales team.


It also provides your business with a much more scalable foundation for the future. Your support team will need to grow as your business does but not at the same rate. Your best talent in the organisation will come up through the ranks and with a great career path ahead of them, your support team will be those highly motivated and engaged employees who can wow your customers.


I am not completely against outsourcing support and I think there are a number of situations where it can make sense,

  • Your business is scaling very fast and you do not have the time and capacity to develop your self-service resources or to scale your own support team quickly enough. This is a good opportunity to find the right partner to help you for a period of time.

  • You are moving into a new geographical market and need local support or a local language support presence immediately.

  • You need some critical support skills that are not easy to find. This is where the hybrid model can play a role. Work with the right partner and augment your own teams skills and capacity if you can’t do it yourself.

Inverting the typical support model can really be transformational for your business. How do I know? I built and managed a global support team following this principle and it helped transform the customer perception of support. It is not without its challenges but the benefits can be huge.


Please do reach out if you would like to know more.

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