Lately there has been a lot of discussion about the current market conditions and an impending recession. Business owners and leaders are making difficult decisions by reducing head counts, cutting costs, and working to lengthen their runways. In this article, we discuss how outsourcing can do just that and improve the position of your business despite the unfavorable economic factors.
Reducing Operating Expenses
The most obvious benefits to outsourcing, and especially outsourcing during a recession, is the reduction in operating costs. At Leverify, our average customer support resource is ¼ of the cost of an internal employee. When the cost of capital is high during a recession, reducing the spend on cost centers like customer support allows a business to reallocate that capital to their runway, customer acquisition, or wherever they need.
Improving Customer Retention
Customer retention matters all of the time, but is uniquely important during a recession. When companies are curbing the amount they are spending to acquire new customers, it’s especially important to retain customers that you’ve already paid for and improve their LTV. The average lifecycle for an in-house customer support representative is about 6 months. This creates a perpetual need for more training and having new representatives dealing with your customers which hurts retention rates. Additionally, training the new representatives is expensive. On the other side of the spectrum, customer support representatives at Leverify have an average lifecycle of 3 years — this reduces the cost of needing to constantly train and improves customer retention rates due to the skill and experience Leverify’s CSRs provide daily.
Creates flexibility within the organization
During a recession, businesses are faced with numerous existential challenges. Capital is more difficult to raise, consumers are less likely to spend, and businesses tighten their belts making B2B sales life cycles lengthen. This creates a difficult dynamic for businesses to lengthen their runways which makes flexibility in their cost centers immensely helpful. Leverify provides month to month contracts which allows our clients to scale up and down depending on their needs rather than having a static resource and burning more capital than needed.
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Let’s discuss how your business could benefit from outsourcing — reach out to us for a free consultation at sales@getleverify.com.
