OUTSOURCING CUSTOMER SERVICE: TOP ADVANTAGES FOR AUTO LENDERS

The defi Team Business Process Outsourcing, defi INSIGHT, Digitalization, Simplifying Processes, Technology

End-to-end auto lending is a lot like funambulism. What is funambulism, you might ask? 

Funambulism goes back to at least ancient Greece, though this isn’t how it’s usually referred to in English. In Greek, the words “funis” and “ambulare” mean “rope” and “to walk,” so in essence, funambulism is really just “tightrope walking.” 

The key to this analogy are two elements of funambulism—balance and the moment of inertia. A tightrope walker needs to maintain balance while moving across a very narrow path, with the physics behind the moment of inertia represented by the equation I=mr². This equation refers to the fact that the length of the rope must equal the mass it carries times the rope’s radius squared to keep the tightrope walker from falling. 

While moving from one end to another, a tightrope walker needs to resist any changes to the rope’s positioning while maintaining balance. As motion occurs around the rope’s axis, the tightrope walker must react immediately to any oscillations the rope makes to keep from falling. Balancing on a tightrope essentially just requires the walker to lower the body’s center of gravity. To help maintain balance, tightrope walkers often carry a very long pole, which causes any changes in equilibrium to occur more slowly while providing more time for adjustments to be made. The physics behind this are similar to why a slender vase is easier to knock over than a stouter one, as the mass of the latter vase is closer to the ground, which with tightrope walking is the rope’s surface. Now, getting back to end-to-end lending’s relationship to funambulism—or tightrope walking, if you will. 

Consider the end-to-end lending process as the rope, with the tightrope walker as the relationship between the lender and borrower. Any number of things can disturb this relationship, causing the tightrope walker to fall and resulting in catastrophic injury or death. In essence, falling symbolized the ruination of this lender/borrower relationship. While negative effects leading to falls could include wind, weather, noise, or other environmental factors, negative effects throughout a loan’s lifecycle could include revelation of a black mark on a borrower’s credit report, slow processing of the loan, nonpayment due to job loss or illness or any number of circumstances. In this analogy, the long pole symbolizes the lender’s customer service agents, who protect the lender/borrower relationship and make this harrowing journey across a loan’s lifecycle easier, from one end to the other. When outsourcing customer service, advantages include anything that keeps this relationship from falling off the rope and permanently destroying it. 

12 Outsourcing Customer Service Advantages for Auto Lenders

The estimated value of the customer service industry in 2020 was $75.1 billion, with nearly 54 percent of companies using outsourced customer support. As one of the most outsourced business processes for finance companies, it’s not surprising that the market looks set to rise in 2023 to $81.5 billion. Lenders who choose the right partner for outsourcing customer service will benefit from this relationship in countless ways. By putting the responsibility on an experienced outsourcer of customer service, lenders show that they care about their borrowers’ needs. 

Top outsourcing customer service advantages for auto lenders are: 

1. Increases Profits

Enabling lenders to concentrate on just the core function of loaning money allows them to make more loans and, as a result, increases profits. When auto lenders outsource services like customer care, this frees them up to build their loan portfolios, better research the needs of their customers, and provide other services that will increase revenue.

2. Improves Relationships

Using outsourced customer care experts helps strengthen the lender/borrower relationship. Savvy third-party customer service providers will collect feedback that allows lenders to meet the needs of their borrowers better. This will boost the number of return customers while spreading positive word-of-mouth advertising to make new ones. 

3. Expand Support Hours

We live in an age of instant gratification. Like any other customers, borrowers want to have answers to their questions as soon as possible, regardless of whether it’s outside regular business hours. Providing customer support is costly, and since it tends not to be part of many lenders’ core functions, it’s often better done by experienced professionals who understand the consumer vagaries. Hiring an outsourcing partner to train and manage professional customer care agents not only allows customers to access top-notch service after hours, on weekends, and during holidays, but it also enables lenders to reach an expanded customer base.

4. Scalability and Flexibility

Going to a third party for customer care isn’t just about cutting costs and reducing overheads. It allows lenders to be more flexible and quickly scale their capacity without recruiting workers, which inevitably would involve considerable time and expense.

5. Brings Specialized Knowledge 

Quality customer service representatives need months, or even years, of training to represent a company effectively. Building a solid customer service department takes considerable time as well. Outsourcing allows lenders to provide their customers with knowledgeable and responsive agents trained to deliver the best possible service. 

Trained customer care professionals can:

  • Contact new customers to welcome them and inform them about payment processes. 
  • Knowledgeably answer any questions relating to lenders’ products and services.
  • Provide guidance for situations with which a customer is dealing, such as financial issues or how to fill out specific information on digital forms.

Customer care requires knowledge about dealing with specific types of sensitive situations, for which veteran agents are well-prepared. The experienced outsourced customer care staff can become invaluable to a lender’s success. 

6. Cost Efficiency

In-house customer service personnel require lenders to pay full-time salaries, not to mention extra costs for health insurance and other benefits. When outsourcing customer service, advantages for lenders extend to areas like IT and other technical capabilities. This is particularly true when lenders want to provide customers with end-to-end loan solutions. 

7. Reduces Costs

Veteran customer service outsourcing companies offer many cost-saving advantages. Often these outsourcing partners have vast experience implementing and updating technology that supports efficient customer service operations, reducing costs while improving service. Achieving better service for customers at a lower cost is advantageous to any lender. 

8. Providing Innovative Technology

Companies that provide cutting-edge financial technology (fintech) can also offer enhanced support capabilities for lenders who are outsourcing customer service. Advantages of using such third-party providers include not having to continually invest in new fintech. A lender would be hard-pressed to match the technical capabilities and customer service expertise of certain leading outsourcing providers. 

9. Better Data Collection

With every borrower call comes information that needs to be captured and analyzed to improve the clients’ processes. Experienced customer service providers have the necessary technologies that include analysis platforms used to unlock valuable insights from large amounts of raw data.

10. Helps Improve Quality

Experienced outsourcing partners have tried and tested systems to maintain and improve customer service quality over time. Collecting and analyzing data from calls allows lenders to track such things as answer time, call resolution, and other performance assessments. By outsourcing customer service, advantages resulting from such monitoring can point to both the strengths and weaknesses of a lender’s offerings. 

11. Provision of Niche Services

Providing 24/7 customer service coverage internally can be extremely challenging, and even wasteful when the calls don’t come in, which is why so many lenders consider outsourcing customer service. Yet it’s not just about coverage, but other unique services. For example, customer service representatives can provide specialized technical skillsets or speak different languages, allowing lenders to better personalize services to their customers. 

12. Reduces Employee Turnover

Customer service can be highly stressful, with call center turnover often over 40 percent. One primary advantage of outsourcing customer service is limiting high employee turnover, an expense every employer wants to avoid. It also means a lender’s human resources (HR) department doesn’t need to hire and manage these workers directly. This allows HR to redeploy staff to better support a lender’s business strategy.

Getting Started

defi SOLUTIONS with over 30 years of experience, understands outsourcing customer service. Advantages from providing skilled and experienced representatives ensure a lender’s customers will always be responded to promptly and positively. For lenders struggling with providing their customers with in-house customer care, contact our team today.

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