How a Regional Retail Chain Optimized Its BPO Costs With Outsource vs. Insource Modeling
Retail (Pet Store Franchise) · Regional Multi-Location Chain · Outsourced Contact Center Operations · Appointment Scheduling via Text & Voice
The Challenge
A fast-growing regional pet store franchise had implemented a text- and voice-based system through multiple outsourced providers to allow customers to schedule in-store appointments. The model worked at lower volumes, but as the business expanded, cracks began to show in both cost efficiency and customer experience consistency across touchpoints.
The franchise was paying its BPO providers on a per-contact and per-appointment basis with no volume caps or cost reduction tiers — meaning that every new store opening and every spike in customer demand drove costs up linearly. Ownership was increasingly concerned that the current vendor contracts were not structured to support sustainable growth and that they were overpaying for a service that could potentially be handled more effectively in-house or through renegotiated terms.
The company needed a clear, data-driven view of how costs would scale over time under the current model — and a framework to determine at what point it would become more cost-effective to either renegotiate vendor contracts or transition to an insourced operation.
Our Approach
Blue Orbit Consulting was engaged to build a comprehensive cost analysis framework and deliver actionable recommendations for the franchise's contact center strategy. Our work spanned four key workstreams:
Multi-source data consolidation and volume analysis — Aggregated disparate data from calls, text interactions, website visits, and appointment bookings to establish a complete picture of contact volumes, channel distribution, and work allocation between the client's internal team and external vendors.
Unit cost modeling and current-state benchmarking — Built a detailed unit cost model for the existing outsourced operation, calculating true cost-per-contact and cost-per-appointment across all channels and providers to establish a reliable financial baseline.
Outsource vs. insource crossover analysis — Applied growth assumptions across multiple strategy permutations to model the financial crossover point — the volume threshold at which insourcing the multi-channel operation would become more cost-effective than continuing with external providers.
Business strategy review and vendor contract recommendations — Conducted model reviews and facilitated strategy discussions with ownership to evaluate timing, risk, and next steps — including recommendations for market-based contract terms that would better support the franchise's growth trajectory.
The Results
Scalable financial model delivered — The franchise received a comprehensive cost model illustrating how contacts, touchpoints, and appointments would scale financially as the retail operation expanded, enabling data-driven growth planning.
Clear insource vs. outsource crossover point identified — The analysis pinpointed the specific volume threshold at which transitioning from outsourced providers to an in-house operation would yield cost savings, giving ownership a concrete decision framework.
Market-based contract recommendations provided — Best-practice recommendations for restructuring vendor contracts with volume-based pricing tiers, caps, and market-aligned terms were delivered to support more sustainable growth under the current model.
Strategic roadmap for next steps established — Ownership gained a clear, phased action plan with defined milestones for when to renegotiate, when to begin insourcing preparation, and how to sequence the transition without disrupting customer service.
Related Resources
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