Of course, if customer service is done in a third world country, it is definitely cheaper because their rate of pay is a fraction of what would be paid here. But even outsourcing it to a United States company that just does customer service probably saves the business money because it doesn't have to worry about the benefits and the promotions and such.
Of the several companies surveyed if outsourcing cuts costs, 44 percent claimed that their main reason for outsourcing their customer support was to actually reduce or control costs.
Cost savings are realized in terms of how the company saves on recruitment and training as well as costs associated with maintaining an in-house staff such as benefits and allowances. Moreover, it does not have to invest in high-end infrastructure and technology such as computers and other call center tools.
Although the hourly rates of outsourcing may often be lower the true savings come in the currency of time and operational logistics.
This capital savings can be invested back into the company. Also, internal resources can be freed up and assigned to other business-critical tasks.