Customer Service Outsourcing: Pros and Cons for Auto Lenders

Auto lenders are now busier than ever. As their businesses expand, the need for customer service outsourcing becomes more urgent. What are the pros and cons? What should lenders look for in an outsourcing company, and what should they avoid? We will discuss customer service outsourcing pros and cons and how businesses can benefit.

Even if you currently believe you can continue to handle all of your own customer communications without outsourcing, a time will come when the responsibility grows onerous. As your auto lender service business expands, you’ll need to hire more customer service staff. This becomes problematic in a lot of ways, including:

• It’s more expensive to employ in-house staff than it is to pay for customer service outsourcing.
• Your team may become overwhelmed whenever you add a new service or gain more customers.
• It’s hard to keep all of your staff on the same page and control the quality of their work.

Inevitably, something will slip through the cracks. You don’t want to lose a customer due to poor communication. Letting experts handle it will free up your staff and give your customers what they need.

Auto lenders face complex processes. From application through underwriting, approval and funding through loan or lease payoff, collection or lease return, titling or remarketing lender staff is often stretched thin, particularly in a high-volume market.

When considering customer service outsourcing pros and cons, it is important to remember all of the other services outsourcing offers that current employees may behandling:

• Specialized auto loan management and servicing software.
• Dedicated support managing both inbound and outbound contact.
• Call centers staffed with highly trained representatives.
• Staff available to welcome new clients and to initiate a positive relationship.
• Data analytics tailored to auto lender objectives.
• Collection oversight and compliance standards.
• Loan and lease maintenance.
• Multilingual operators to assist non-English speakers.
• Easily accessible online help centers.
• Sales and lead generation.

The staff needed to handle the above and provide the best service possible to customers, requires a robust workforce and significant investment in training.

Sparse or undertrained staffing may lead to missed opportunities. A small employee pool may be sufficient during slower times, but in busy conditions like those currently facing dealers, the likelihood of overlooking new buyers and repeat business is too great to risk.

Inevitably, something will slip through the cracks. You don’t want to lose a customer due to poor communication. Letting experts handle it can free up your staff and better provide your customers with what they need.

When auto lenders elect to outsource, they’re assured of service consistencies. From initial call center introductions through the complete loan maintenance cycle, every aspect of the customer care process is well managed. The best providers offer far more than simple call center resolution duties.

Modern outsourcing services provide white-label customer service that matches your brand and your specifications and uses the most up-to-date technology to enable the best possible experience for your customers.

Using an end-to-end solution, the process is seamless. Typically, once a loan application is approved and funded, or for some lenders just before funding, a highly-trained outsourcing customer representative will reach out, confirm the details of the loan and payment terms, and be available through the means you decide (call, email, text) to answer your customers’ questions, no matter how complex. Customers will find it easy to get the answers they need without long waits or redirection to another arm of the lender’s business.

The most current call center technology offers lenders and buyers improved response times and digital interactions:

• AI-powered messaging that simulates human conversation through voice or text commands.
• Natural Language Processing (NLP) with Interactive Voice Response (IVR) for hands-free menu responses.
• IVR payments that are accepted anytime, from anywhere without agent interaction.
• Virtual assistants that automate and personalize the customer experience.
• Instant access to customer account information to inform and improve the conversation.
• Click-to-call integrations that streamline agent interaction.
• Callback for IVR offers an option for a callback while keeping the caller’s position in the queue.

With these efficiencies, callers’ questions and concerns are answered quickly and thoroughly, with minimal hold time. While most queries are easily handled by AI, customers who require an agent are able request a convenient callback time, eliminating wasteful and frustrating sessions “on hold.” Customer satisfaction rises. Loyalty is earned.

The result? Enhanced trust that grows from excellent service.

Outsourcing services can also handle collections. When a buyer falls behind on payments, outsourcing services are able to reach out and enact the specific strategy a lender prefers  to avoid costly repossessions. And, given the chance repossession is the only option, the right provider will assist with reclaiming, reselling, and recouping costs associated with defaults.

When discussing customer service outsourcing pros and cons, it is important to be aware of the cons. So, what are the potential downsides?

Poor Communication

Choosing a discount BPO doesn’t always result in comparable savings. Establishing a strong communication pipeline is the most critical aspect of outsourcing. Poor communication between lenders and BPOs impedes good service, causing confusion and damaging trust. Unless both lenders and servicers are well-aligned, implementation activities are delayed, causing frustration. Business relationships are damaged.

Security Risks 

Lenders may hesitate when granting access to a third party. Sharing customer details along with business, financial, and performance data may feel intrusive. Outsourcing providers must ensure security and discretion. This is where transparency matters most: BPOs unwilling to share detailed reports of their activities and their security enhancements will leave lenders dissatisfied.

Ceding Control

Engaging a BPO organization to manage your loan cycle processes may be initially challenging. Lenders often delay the necessary transition for fear of potential risk. This results in a no-win situation for any lender’s most important asset—customers and their ongoing satisfaction.

Inquiries promoting transparency between a BPO and a lender should be welcome. Here are some of the most basic considerations.

Q: Are their staff as well-trained as they claim?

A: Ask for details. What’s their training process? Are they ISO certified? Are you able to meet with the training team lead? Who are some of their other clients? Is the BPO familiar with the needs of a company your size?

Q: Is the company truly capable of improving my loan program?

A: Data Analytics should provide the answer. Any BPO that offers data analytics may easily compile:

• Customer satisfaction rates
• Increased end-user productivity
• Data aggregation and quality assurance
• Rapid data analysis
• Full data access available for examination and clarification

When considering a prospective BPO provider, do some research. Are other lenders part of their portfolio? What’s their customer retention rate? How long have they been in business? What’s their client satisfaction track record?

These details should be readily available to all outsourcing prospects through Customer Satisfaction (CSAT) scores, First-Call resolution metrics (the one and done rule), Net Promoter scores, or other data the provider collects that showcase their performance. This information should be immediately available for presentation.

The best providers offer far more than simple call center resolution duties. When customers inquire about a loan application, they expect excellent and immediate service. Experienced outsourcing providers will answer your customers’ questions, no matter how complex. And with all outsourcing services housed together, customers will find it easier to get the answers they need. The result? Enhanced trust that grows from excellent service.

Auto lenders in a tight market may wish to maintain in-house loan maintenance, but will it best serve their customers? Offering borrowers the most seamless, accessible system for submitting and confirming information details results in the greatest satisfaction. Professional outsourcing not only pleases customers but also frees lenders to concentrate on their core competency—approving loans.