The Outsourcing Model Nobody Wants to Talk About

There's a hard truth in customer service outsourcing that most people in the industry won't say out loud.

Most outsourcers aren't incentivised to fix your customer problems. Their business model relies on volume. More contacts, more headcount, more revenue. The worse your customer experience is upstream — confusing products, broken processes, unclear policies — the more work flows into their operation. And the more work flows in, the more they bill.

This isn't a secret. Everyone in the industry knows it. But it rarely gets said plainly because the entire commercial relationship is built on the polite fiction that both parties want contact volumes to go down.

They don't. Not really.

The AI version of the same problem

Here's where it gets worse. The outsourcing industry has spotted that AI is coming for their headcount model. So they've pivoted — not to fixing the underlying problem, but to selling a new version of the same thing.

Instead of selling you people to handle your contacts, they're now selling you bots to handle your contacts. The pitch is "efficiency." We'll automate 40% of your volume. We'll deflect these queries. We'll contain customers in self-service.

The language has changed. The economics haven't.

The revenue model still depends on volume existing. The bot needs contacts to process. The platform needs interactions to justify its licence fee. The outsourcer needs complexity to remain embedded in your operation. Nobody in that chain benefits from the moment a customer stops needing to make contact at all.

We're swapping agents for bots, but the underlying assumption remains: the more volume, the better.

Follow the incentive

This isn't about vilifying outsourcers. Many of them employ brilliant people who genuinely care about service quality. The problem is structural, not personal. When your revenue model is tied to the volume of problems customers have, your incentives are misaligned with the brand you're supposed to be serving.

Think about it practically. An outsourcer identifies that 30% of contacts are caused by a confusing returns policy. The right thing to do — for the customer, for the brand — is to fix the returns policy. But fixing the returns policy removes 30% of the outsourcer's revenue. So instead, you get a proposal to "optimise the returns handling process" and perhaps a chatbot that makes returns enquiries faster to process.

The problem persists. It just gets handled more cheaply.

And "handled more cheaply" is not the same as "solved."

The question nobody asks

If your outsourcer's revenue depends on your customers having problems, how aligned can they really be with your brand promise?

It's a simple question. Uncomfortable, but simple. And it applies whether they're staffing a contact centre floor or selling you an AI platform. The delivery mechanism changes; the incentive structure doesn't.

The brands that are starting to ask this question are the ones worth watching. They're not just renegotiating contracts or switching vendors. They're rethinking the model entirely. What if the goal wasn't to handle contacts efficiently but to eliminate the need for them in the first place? What if the commercial model rewarded the partner who reduced demand rather than the one who processed it?

Another way exists

There is a different model. One where the service partner's success is measured by the problems that stop happening, not the ones that get answered. Where AI is used to understand why customers are making contact and to feed that intelligence back into the business — into product design, into policy, into the moments where friction is created — rather than just automating the response.

It requires a different commercial structure. Different metrics. A different kind of relationship between brand and partner.

It's harder to sell, honestly. "We'll make your customers need us less" is a tougher pitch than "we'll handle your volume at a lower cost per contact." But it's the only model that actually serves the customer. And eventually, it's the only model that makes business sense — because the brands that keep generating unnecessary contact will lose to the ones that don't.

We're building for that future. Not because the current model is evil, but because it's exhausted. And everyone in the room knows it.