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Comparing the cost-effectiveness of outsourcing versus in-house customer service in property management.
June 6, 2024

Is Property Management Customer Service Outsourcing Cheaper Than In-House?


Macy Lyka Mamauag

Lyka is STAFFVIRTUAL’s Senior Content Editor. She oversees the content team and ensures all ma...

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Did you know that around 69% of people are willing to pay more for goods and services when the customer service is excellent? This shows that customer service plays a big role in a company’s reputation and success. 

Choosing between outsourced or in-house customer service depends on various factors, but there are general indications that one may be most suitable for your business.

In-house offers transparency but requires resources. Property Management Customer Service Outsourcing, on the other hand, offers flexibility, cost savings, and expertise. Let’s dive deeper into the comparison between these two.

How To Determine Cost Analysis of In-House Customer Service

It’s crucial to have a cost analysis of your business and the outsourcing service to determine the most convenient provider. This allows you to make accurate comparisons and informed decisions for your growing business.

Calculating in-house customer service costs involves dividing them by working hours, considering recruiting costs, paid vacations, and insurance. Comparing in-house costs with outsourcing options requires understanding the outsourcing service’s coverage — not only agent salaries and equipment.

Direct and Indirect Costs of In-House Operations

The process of establishing and maintaining an in-house customer service team involves a comprehensive cost analysis, including direct and indirect expenses.

Direct Costs:

Here are three examples of direct costs:

  • Salaries and Benefits: The most significant expenses for in-house customer service are employee salaries, paid leaves, insurance, and other employee benefits and/or incentives.
  • Equipment and Software: When setting up your in-house customer service, think about the cost of acquiring and maintaining necessary tools and equipment. Costs might include the initial investment, regular maintenance, and potential upgrades or replacements.
  • Training and Development: Continuous training is crucial for a powerful customer service team. Additionally, workshops, certifications, and skill development programs contribute to overall direct expenses.

Indirect Costs

Four indirect costs property managers might encounter are:

  • Overhead Expenses: Having your own in-house customer service team entails additional utilities, general office maintenance, and rent.
  • Administrative Costs: With an in-house team, there are management-related expenses, including supervisors, team leaders, managers, and similar roles. 
  • Risk Management and Compliance: To prevent potential legal and financial risks, companies have to comply with property management industry standards. Allotting a budget for this area can help prevent needless legal disputes or issues in the future.
  • Downtime Costs: Unplanned service downtime can lead to lost productivity and revenue: Its financial impact can be a notable indirect cost. Small businesses could stand to lose hundreds due to downtime, and larger companies can face even headier numbers. Forbes suggests that one minute of unplanned downtime can cost up to $5,600.
Understanding the financial benefits of outsourcing

What Are the Financial Benefits of Outsourcing Customer Service?

According to the Forbes Business Council, famously recognizable United States companies like Target and Bank of America have outsourced customer service call center operations to the Philippines and India, saving labor costs. 

An outsourcing customer service team may not be as familiar with your company’s culture and processes compared to an in-house team, but they possess experience in customer service. Luckily, part of their training is to absorb company culture extremely quickly. Outsourcing providers are typically able to hit the ground running, allowing your team to start immediately and reduce working hours and customer waiting times.

Reduced Operational Costs and Economies of Scale

Customer service outsourcing is a cost-effective solution for small to medium-sized businesses without the resources or capacity to build their in-house customer service teams. This service reduces start-up costs, offers significant savings, and allows instant implementation. With this, teams can bypass the unavoidable learning curve with a homegrown alternative.

Additionally, property management companies can cater to a higher number of clients as outsourced customer service teams are trained to provide efficiency. Business costs reduce as productivity increases.

Comparing Quality and Efficiency

Outsourcing customer service provides businesses with specialized expertise which enables the efficient resolution of customer queries. If you combine this with the outsourced company’s technical expertise and data analytics tools, it strengthens customer relationships, thereby boosting business growth and customer development. Property management companies can take advantage of this global talent pool.

You can still deliver top-quality services through your in-house customer service, but outsourcing wins when it comes to efficiency. When you outsource, you get a dedicated team to perform customer service tasks, which can result in higher productivity and a better customer experience

Service Quality and Customer Satisfaction Metrics

Aside from being an efficient choice, outsourcing delivers top-notch customer service. When you outsource, quality monitoring and assurance are included in the contract. They implement strict performance metrics and quality assurance processes to help ensure that they uphold your company’s standards, brand identity, and protocols. 

While some may believe maintaining quality is easier with an in-house customer service team since they have direct control, it may add to the daily burdens they face. This can lead to a longer time to address conflicts and challenges, which can eventually lead to unhappy clients and scaling difficulties.

Case Studies: Outsourcing vs In-House Success Stories

At STAFFVIRTUAL, we believe that every business should have access to the highest quality outsourced customer service. We want to help companies achieve their business goals and make their investment worth every penny. With our almost 15 years of experience, we continue to assist our clients with their customer service needs and deliver top-notch service. 

Here are some of our clients’ outsourcing success stories:

Erin Condren Designs

We couldn’t be prouder of our Erin Condren case study

Erin Condren Designs is a US-based lifestyle brand specializing in creating functional organization essentials. They sell their products through e-commerce and retail stores in the US. To provide consistent, high-quality customer service, they decided to outsource their customer rather than building one in-house. 

We helped them through the following:

  • Sign on customer service agents 
  • Hire quality assurance personnel for strict business procedures compliance and ensure customer interaction content is strictly implemented
  • Take on seasonal employees for additional support during their peak marketing seasons

Our customer service team has consistently provided high-quality service to clients, transforming from a stationery business to a leading brand in the organization space industry. They’ve also recently achieved an average positive CSAT rating of 97.9% which is higher than the industry average. 

Case Study: StripViewSuites

StripViewSuites, established in 2015 by Alex Kostushin, is a renowned property management firm specializing in short-term and vacation rentals, offering exceptional services to guests and property owners in the Las Vegas area.

Their goal is to have a dedicated team of experts who:

We stepped in and helped them achieve their goal through flexible outsourcing customer service. At present, STAFFVIRTUAL supplies the client with customer service representatives, a Rate and Revenue Specialist, and a Team Coordinator.

The STAFFVIRTUAL team consistently delivers exceptional results in property management, earning recognition for high show rate. They support StripViewSuites, providing almost 24/7 assistance.

Weighing the pros and cons before outsourcing

Making the Decision: Factors Beyond Cost

Both models have the potential to help your business grow. Sure, you can just easily decide based on which is cheaper and can save financial resources, but not every form works for every business. 

Here are some factors to ponder (beyond cost savings):

  1. Resources and Technology: Assess your ability to handle customer support needs and your technological proficiency, as customer service necessitates these aspects.
  1. Timeliness: Determine which is more likely to establish your customer service team faster. The idea of time being money is popular for a reason. 
  1. Team Management: Building and managing a customer service team is crucial. Whether managed in-house or outsourced, it can significantly impact the success of the team.
  1. Communication: Effective communication is crucial for in-house and outsourced teams. Take care to resolve issues, conflicts, or challenges that could pop up.
  1. Liabilities: Both processes have their fair share of liabilities that can take up your time and resources. Besides the cost, consider the liabilities. How much legal risk are you prepared to take on? Legal outsourcing can provide relief here and is one of the major factors to think about when deciding what makes the most sense for your organization

Strategic Considerations in Choosing Outsourcing or In-House

Still not sure which path is ideal for your property management venture? Ask yourself the following questions:

  • Review your long-term goals. Which business structure can help you achieve those goals?
  • Analyze where you spend your time and other resources. Does it contribute to helping your business grow?
  • Aim for consistency. Great customer service has to be consistent. Assess whether you can get that from having an in-house team or an outsourced one.
  • Choose highly skilled and qualified talents. When you have a competent team, it can help you a lot in achieving your business goals.

Next Steps: How To Transition to Outsourcing Smoothly

Have you decided whether to outsource or not? Great! Now comes the transition. 

It’s one of the most important steps that can determine the success of a customer service team. A well-executed and smooth transition can prevent negative impacts on productivity, employee satisfaction, and customer satisfaction.

Here are a few guidelines for switching to an outsourced model or optimizing in-house services:

  1. Establish Clear Metrics and Deliverables

When setting up your customer service team, determine what processes work or not. At the same time, gather the necessary reports or documents to ensure a seamless transition.

  1. Systems and Integrations

A smooth transition requires careful planning of systems, such as phone systems, ticketing systems, and organizational charts. A detailed description of these systems is crucial for successful integration.

  1. Communication

Effective communication is crucial for in-house and outsourced teams. Pr

omptly address any issues, conflicts, or challenges that may arise.

STAFFVIRTUAL is an expert in the outsourcing industry.

Conclusion: Talk to the Outsource Experts Today

In conclusion, to answer the question “Is Property Management Customer Service Outsourcing Cheaper Than In-House?”, it really depends on your unique financial situation and budget to decide which is the better fit. But keep in mind that outsourcing can bring huge cost savings, which can benefit small, medium, and large businesses. 

Additionally, you need to weigh all the pros and cons, especially when it comes to costs. While both blueprints offer a couple of advantages and disadvantages, think about other factors aside from the cost. An in-house team can handle problems due to proximity and parallel schedules, while outsourcing provides support for emergencies outside office hours and ensures business continuity (although they can also work traditional North American time zone work hours).

When deciding which business model to go for, it’s vital to balance cost-effectiveness, flexibility, scalability, and focus. This decision requires a detailed evaluation of all aspects of successful property management customer service.

STAFFVIRTUAL has almost 15 years of experience in customer service. Our clients are a testament to our expertise. If you want to know more about outsourcing vs. in-house, we’d be more than happy to jump on a call with you. Schedule an intro call today!


How To Guard Against The Cost Of Unplanned Downtime And Network Outages | Forbes

In-House And Outsourcing Customer Service: Key Differences, Pros, And Cons | Forbes

What is Customer Satisfaction (CSAT) and How to Measure it? | TechTarget

People willing to pay more for good customer service | WJAR

Erin Condren Case Study | HubSpot