Vilfredo Pareto. You may not have heard of him and you may not know that he was a renowned economist and university professor of the late nineteenth and early twentieth century.
He is the creator of one of the most important statistical theories at a sociological level: the 80-20 rule and law of the vital few.
“In any given population contributing to a common effect, it is a small proportion that contributes to the greatest part of the effect.”
This theory is aptly reflected in the world of ecommerce by Marcin Chruszcz, Account Manager at ExpertSenders, who said in an interview with Ingrid.com:
“Following the Pareto principle, 80% of the profits come from 20% of the best customers.
The most interesting thing here is that if we manage to increase that number by just 5%, profits would increase by as much as 125%”.
From this, I have decided to focus on one of the key points for every ecommerce store, which is the after-sales service.
In this article I will show you the secrets and the importance of outsourcing this type of work so that you can make a quality leap not only in terms of customer service, but also in terms of profit for your brand.
What does outsourcing after-sales services in ecommerce mean?
The purpose of outsourcing ecommerce after-sales services is founded on the basis of getting an external company that can carry out after-sales tasks and services for customers, such as: after-sales service, logistics, sale of additional products, quality control, verification of product reception, etc.
Of course, like any activity that is going to be carried out outside your orbit of control, it has certain advantages and disadvantages.
| ADVANTAGES | DISADVANTAGES |
|---|---|
| Reduced costs: By outsourcing the after-sales service, you do not have to worry about additional salaries, hiring of employees or internal operating expenses. | Loss of control: Everything that does not happen within your orbit will be, to a certain extent, out of your control. That is why it is very important to choose the right company when making the decision to outsource the entire after-sales service. |
| Improved productivity: Engaging specialized companies in the sector will allow you to significantly improve your productivity and, as a consequence, your level of customer satisfaction. | Data protection: Everything related to compliance with the Customer Data Protection Regulation (GDPR) must be clearly specified by the company offering the after-sales service and must also be a very important aspect to be taken into account. |
| Access to specific tools: Each of the companies in this sector has the latest tools on the market in terms of after-sales service. Undoubtedly, another point favoring the decision to outsource this type of services. | Negative impact on employees: If you have a team of employees, it is normal for the outsourcing of a service and the externalization of a task that could be carried out internally to generate some discomfort among some members of your team. |
| Implementation of new strategies: The selected company will have innovative and specific strategies to offer an after-sales service that can give your ecommerce a leap in quality. | Reputation and reliability: Delegating an area as important as the after-sales service also puts at stake your reputation and reliability in the eyes of your customers. That is why you should be very cautious and be very sure about which company will be chosen to carry out the task. |
Keys to choosing the right supplier
When making the decision to outsource all the after-sales service of your ecommerce business, you will have to take into account some points that can determine the success or failure of your initiative.
Knowing your business' needs
One of the most important points is, without a doubt, knowing the needs and weaknesses of your business.
Is your ecommerce at a point of maturity where it is necessary to make an investment like this?
If you opt to outsource the service, how will the tasks be monitored?
Do you have a plan of action ready to give to the company about the needs of your brand and how you want to carry out the whole after-sales process?
To answer each one of these questions, you need to know exactly how your business is doing.
Ultimately, the goal is to turn outsourcing after-sales service into a benefit and not a problem.
Review the supplier's track record
As we have already mentioned, having an experienced supplier that has all the necessary technological and infrastructure resources to carry out the after-sales service is another important aspect for success.
For this reason, here is a short checklist for you to take into account when approaching each company.
- Years of experience in the sector
- Have you previously worked with any ecommerce companies in the same niche?
- Do you have experience and proven testimonials or case studies?
- Do you have the capacity and infrastructure to handle a volume of X orders per day?
- Do you offer a service as a logistics operator?
- What after-sales services do you offer?
Verify their technical capacity
Depending on the size of your ecommerce, it will also be necessary for the supplier to have the human and technological resources to be able to responsibly and efficiently carry out all the after-sales tasks of your orders.
This includes the use of management software in which all the parties involved can participate and have instantly updated information about each of the after-sales processes that are established at the beginning of the working relationship.
Check references and opinions of other customers
In the same way that we use customer references to provide a framework of credibility when trying to sell a product, companies that offer an after-sales service should also back up their words with real information about how and with whom they have worked along the way.
Consider cost-benefit
Establishing clear rules about how each of the after-sales processes will be carried out and, above all, how their data will be treated will allow you to build a solid relationship of trust over time.
That is why we are going to explain 5 of the most important points that you should negotiate with the selected supplier in order to avoid any issues for the duration of the commercial relationship.
How to work with an after-sales service supplier
🤝🏻 Define the terms of the agreement
When we say terms of the agreement, we are referring to everything that concerns the day-to-day work. Everything from which services will be specifically engaged, what and how the customer will be contacted, what the after-sales processes will be like depending on the products or services that the customer has purchased, and even what steps should be taken in the event of complaints or cases that require the input of someone from the company.
🔊 Establish effective communication
The day-to-day dynamics will not allow enough time to address all the issues in the folder.
However, it is important to schedule regular meetings with the entire work team to analyze the metrics, what aspects need to be corrected and what the work will be like during the following months of the year.
It is important for both parties to be involved in the decisions and to be able to establish guidelines that allow for a certain degree of comfort in order to improve teamwork.
✍🏻 Define procedures and protocols
As we have already explained when talking about the terms of the agreement, defining the procedures is also very important since they will be the basis for the success of the work.
As James Chen states in his Investopedia article, “Customers who have a bad experience with a product are more likely to complain publicly”.
That is why you need to be clear about the steps to be followed in each of the after-sales tasks, whether it is customer service, complaint handling, marketing actions, customer loyalty, shipping times, etc.
✅ Establish quality indicators
Establishing quality standards can also help in analyzing the success or failure of after-sales management.
Among the points to highlight, we can mention:
- Complaint response time.
- Average response time via e-mail or online chat.
- Return rates.
- Dispute resolution rate.
- Rate of recovered customers.
🔍 Follow-up and evaluation
All the points we have explained above must be contrasted with an exhaustive follow-up by your internal team, since the only way to verify the success, or not, of your decision and investment, will depend on it.
In addition, it will allow you to work towards the improvement of the operational dynamics, which will ultimately also improve your customer service and your after-sales service.
5 tips to optimize the outsourcing of after-sales services in ecommerce
Any new working relationship requires a period of adaptation and learning that is unavoidable.
However, once this period has passed, the optimization process begins, the main objective of which is to improve times and mechanisms in order to achieve the goals initially set.
But… What are the fundamental points to achieve optimization and guarantee success?
Here are some tips.
| Tip 1: Collaboration | Basically, it's all about teamwork. It is impossible to achieve ambitious goals if you do not have a team capable of responding to the needs and circumstances that arise along the way. The common goal above your own goal. |
| Tip 2: Expectations | Use expectation as the driving force to achieve the objectives. Also, establish the guidelines to follow and what will be the goals to achieve during a chosen period of time (3 months, 6 months, 1 year, etc.). |
| Tip 3: Problem management | Have a clear procedural manual that sets out the priorities to be followed for a given problem. What information will be provided to the customer, how the supplier will act through communication, what will we as a company do, etc. |
| Tip 4: Contingency plan | What will you do if it all goes wrong? You should take this scenario into account and act accordingly so that the damage is as little as possible. |
| Tip 5: Continuous improvement plan | If things are going well, how do you keep moving forward? Ultimately, one scenario will lead to the other, so you must also be ready to take action and make the right choice in case the company grows. A healthy ecosystem: Monitor, evaluate, analyze, optimize. |
After-sales service outsourcing case studies in ecommerce
We have already discussed all the theoretical aspects of ecommerce after-sales outsourcing. But now, let’s get to the specifics.
I’m going to show you 3 case studies of successful companies that have decided to invest in a service like this.
Banco Santander (Brasil) - Pega.com
Pega is an after-sales customer service with clients all over the world.
Its power of adaptability and solution to its customers’ needs has made it a leader in the United States, Latin America and Europe.
One of the most resounding success stories is the one it has had with Banco Santander in Brazil, more specifically, in the area of digital operations.
According to Leopold Martinez, director of operations of the bank, the outsourcing of Pega’s service has allowed it to “ensure growth and improve the digital relationship with customers”.
At the same time, from Pega’s website, they have reported that thanks to their work “the bank automated the technical support and back office processes in its seven business units”.
Air Europa (Spain) - Pega.com
In order to respond to competition from low-cost airlines, Air Europa has opted for Pega.com’s service to effectively complete the entire travel process for each of its passengers.
As a result, a customer service agent will be able to provide solutions to cancellations and rescheduling in order to optimize incident management and consequently increase the benefits of the company’s customer loyalty program.
Wireless Watchdogs (United States) - Unity-Connect.com
Unity-Connect has designed a unique process to maximize the productivity of Wireless Watchdogs, a leader in wireless service management.
As Unity-Connect states on its website, they developed “a customized service level agreement (SLA) that included a measurable key performance indicator (KPI) to track the efficiency and success of tasks with both the core team and a new offline team available 24/7.”
As a result, the company has been able to significantly increase favorable incident management with respect to the product.
Conclusion
Outsourcing after-sales services for your ecommerce business can be one of the great solutions to be able to scale the business to another level.
To do so, you must be clear about your company’s needs as well as take note of the experience, technical capacity and references of the company you are planning to engage.
In short, it is all about a cost-benefit evaluation.
Along the way, I have shown you how to define the terms with the supplier through a fundamental checklist so that all the work goes smoothly and for the common good of your company.
All in all, to choose the right company and achieve success, take into account each of the 5 tips I have given you and take the plunge.
2 thoughts on “Learn how to outsource after-sales service for an ecommerce company”
Sometimes the best decision for our business is to let other professionals manage some areas for us. Good article
Absolutely right, Josh. It is important to delegate in order to optimize our business processes.