The smarter way to cut customer support spending

Sara Yonker

March 13, 2023

Talk to a product expert

The cost of assisting every customer adds up. Answering every question and walking customers through every tech support issue requires a dedicated  team, no matter if you conduct customer support over the phone, via chat, or elsewhere.

But while you might view your department as a core business function, others in your organization might only see a cost center. 

If you’re feeling the pressure to streamline your operating expenses, it’s easy to cut costs the way businesses always have. But knee-jerk solutions like outsourcing and cutting staff can impact your customer experience long-term. Instead, learn how to cut spending in ways that actually improve your customer journey. 

Why are contact centers cost drivers for businesses?

Contact centers have long been cost drivers, not revenue drivers, for businesses. The cost of supporting current customers is a necessary expense, even if it’s not directly drumming up new business. 

Why do contact centers cost so much to operate? It’s more than just headcount. 

1. Agent turnover

High agent turnover rates can be incredibly costly for your business. It's estimated that the cost of replacing a single agent can be up to two-thirds of their annual salary.This cost stems from expenses affiliated with recruitment and training costs, as well as the loss of productivity during the transition period. When you consider that 45% of contact center agents quit in their first year, that adds up to a constant recurring cost.

2. Call volumes

The sheer volume of incoming calls can put a significant strain on your resources, and if not managed correctly, can lead to long wait times, dissatisfied customers, and increased operating costs. This is where advanced technology, like automated self-service solutions and chatbots, can make significant strides in reducing call volumes and freeing up agents to focus on more complex tasks.

3. Compliance and legal risks

Failure to comply with regulations can result in fines, lawsuits, and reputation damage. Ensuring that your agents are properly trained and equipped with the necessary tools and processes to stay compliant is critical to avoiding these costly risks.

Making sure they stay compliant often requires a complex call auditing process - which can also be a huge expense when you conduct call auditing manually.  On top of that, legacy quality assurance processes only audit 3% of calls or fewer, giving you little insight into actual risk. 

3 mistakes companies make when cut costs on contact centers

If you need to reduce your operational costs, the standard solutions that can turn into major mistakes for your customers. Here are three common mistakes companies make when reducing costs

1. Skimping on agent training

First on the chopping block: Companies cut corners on agent training. Properly trained agents give your customers the information they need, faster. If your agents struggle to understand the complexity of customer problems, they need more training.  When you don’t invest on that, your customer journey suffers. Cutting costs on training can result in poorly prepared agents, leading to longer call times, lower customer satisfaction, and ultimately, lost revenue.

Download Agent Coaching Kit

2. Outsource customer support

Outsourcing your customer support saves money. While outsourcing may seem like a cost-effective solution in the short term, it can have detrimental effects on your brand reputation and customer loyalty. Customers want to feel valued and understood, and that requires agents who are knowledgeable about your products or services and have a deep understanding of your company culture.

3. Lack of technology

Lastly,  when companies want to reduce costs they delay or neglect to invest in technology. Technology can help automate tasks, reduce wait times, and streamline operations. Failing to invest in the right technology can leave your agents overwhelmed and ill-equipped to handle the volume of customer interactions. This can lead to burnout, low morale, and ultimately, higher costs.

Cutting costs in these areas may seem like a quick fix, but it's important to consider the long-term consequences.Invest in your agents, your brand, and your technology, and you'll reap the benefits in the form of increased customer loyalty and long-term success.

3 contact center cost savings strategies that improve customer satisfaction 

However, it’s not hopeless. If you leverage advanced AI tools, you can actually improve the customer experience while simultaneously reducing costs.

Reduce unnecessary calls 

Do you know how often customers contact you when they don’t really need to? You can use AI-powered call center analytics tools to help identify unnecessary calls  so you can work to reduce them.

What qualifies as “unnecessary?” 

At Tethr, we consider unnecessary calls

  • Repeat contacts
  • Calls that ask for something that could be completed online or through another self-service channel
  • Calls routed to the wrong department 

Reduce long calls

The longer customer issues take to resolve, the more agents you need. You can shorten average handle time without imposing uniform expectations on your agents that hold them to unrealistic standards. Instead, use technology to reduce call times by:

  • Reducing agent confusion. (If agents know how to answer questions and solve issues, the conversation goes smoother)
  • Use call routing to reduce call handling issues, such as transfers and holds, that lengthen calls. 
  • Pinpoint negative, preventable behavior that extends call length (See how) 

Self service:

By now, most of us know that using AI-powered chatbots and self-service tools  can reduce the number of calls coming into your center. Simple queries and transactions can be handled by automated systems, freeing up your agents to focus on more complex issues that require human interaction. This not only reduces costs but also improves customer satisfaction by providing a faster, more convenient service.

You also can use AI to measure how well your self service channels work, curate ideas for more chatbot options, and measure if your chatbot frustrates customers with its responses. 

Start your free 30 day trial

Use AI to conduct QA and reduce fraud 

When you automate call auditing quality assurance processes using AI, you can not only gain insight to prevent fraud and compliance issues before they occur. This reduces the risk of costly fines and lawsuits while also improving the overall quality of customer interactions. 

Is it possible to reduce costs and improve customer service? 

As much as your customers love you, they don’t want to contact you. Increasing your self-service options with optimized knowledge base articles and chatbot responses, reducing unnecessary transfers, and cutting out agent confusing can improve your customer journey and reduce costs.

Jump to:

Most popular articles