Customer service is an important business process that firms carry out to ensure satisfaction and retention of their customers. Though it is a non-core activity of an organization, it helps in creating goodwill of the company since the company caters to the wants and needs of its customers.

Customer service is a key parameter that differentiates a company from its competitors. Earlier, companies used to carry out customer service in-house, but due to benefits such as focus on core competency, cost savings, quality and flexibility, which are applicable for business process outsourcing as a whole, many companies are outsourcing customer services now. Today, a call made to a British credit card company is answered by an Indian on one day and by a Malaysian on another day.

Customer service outsourcing, also known as call center outsourcing or contact center outsourcing, is a part of <a href="business/outsourcing/bpo/report.php">Business Process Outsourcing (BPO)</a>. It is an established industry with a market size of USD 8.4 billion in 2004, according to research firm Gartner.

Gartner expects the market size for customer service outsourcing to grow at a Cumulative Annual Growth Rate (CAGR) of 13.2 percent and reach USD 12.2 billion in 2007. Research firm, Datamonitor, has also predicted robust growth in customer service outsourcing. The research firm expects the onshore customer service outsourcing market to grow faster than the offshore market.