How Do You Reduce Contact Center Costs?

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August 15, 2022
Aug 12, 2022
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How Do You Reduce Contact Center Costs?

It’s the question we hear whenever we speak to leaders about AI-Enabled Customer Service: how do you reduce your contact center costs?

Customer service and contact centers are expensive operations, and digital customer service - over channels such as voice/phone, webchat, email, and text - has only become more prevalent since the start of the Covid pandemic. And we can expect things to continue in that direction, with 82% of consumers now more comfortable using self-service and digital channels than they were before the pandemic, according to CCW Digital.

Despite this, CIOs are still under pressure to find cost savings in their contact centers. So how do you reduce customer service costs? Here are the main options, along with the pros and cons for each of them.

Reduce Number of Customer Service Representatives

Simply reducing the number of customer service representatives (CSRs) is the easy answer. It creates immediate, measurable savings, and with many businesses spending $1 per minute for each service interaction with a live agent, the costs stack up.

If you’re a business that doesn’t care about customer satisfaction, then this may be an effective solution. But that’s only if the customer experience truly doesn’t make a difference to your business.

Even if you think your customer experience can take a hit, there are major trade offs in reducing headcount. Firstly, you’re not reducing the number of customers that are trying to contact you. You’re simply reducing your ability to serve them and may leave them waiting longer than before. And while this initially saves on expenses, it can cost you revenue in the long run.

According to CCW Digital, 70% of customers note that speed is essential to the success of a customer experience. Furthermore, research from Coveo shows that 76% of consumers would stop doing business with a brand after three negative customer service experiences, while 12% would do so after just one. The experience likely still matters to your customers.

In essence, this means this option is a short-term fix that could ultimately cost you money in the long run. You also haven’t created any efficiencies in order to save costs, putting even greater pressure on the IT organization to find efficiencies that you couldn’t find before should you need to reduce costs in the future.

Secondly, in addition to the customer experience, you’re setting up your remaining CSRs for a terrible experience as well. Your agents will have to deal with customers who’ve been frustrated by long wait times with even more pressure to resolve requests as quickly as possible. As a result, agent turnover will skyrocket. 

Reduce Focus On Innovation

Instead of removing costs from the call center by removing agents, you can cut expenses through the IT organization by focusing its efforts purely on maintaining your current channels.

This won’t immediately impact your customer service, which means your customers shouldn’t notice an initial change. However, it will show when your competitors make improvements and deploy features that you can’t match.

Your customers will notice the difference then too. Hubspot’s State of Service found that 90% of leaders believe customer expectations are at an all-time high, while 65% of companies now place a higher emphasis on customer service than they did before the pandemic, according to CCW Digital.

So while sacrificing innovation may not seem like a problem initially, it will bring the same issues as reducing your call center staff in the long run.

Funnel Customers to Chosen Channels

The digital channels of today mean customers have options. Some channels are live, like those we call conversational - voice/phone, webchat, and text - while some, like email, are asynchronous, and others, such as chatbots, may not even involve a real person at all. And while many businesses try to use all of these channels to help customers depending on their preferences and needs, others have tried to reduce those options and push customers from high-cost channels (like live agents) to low-cost ones (like chatbots or web self-service) in order to cut expenses.

I’m sure you can remember a time when you called a business only to get told about all of the wonderful services they have on their website. Sometimes you can still get the help you need over the phone, but other times, you’re told that you simply must visit the website to get help.

The savings here are obvious because these businesses are replacing their most expensive live interaction with one that requires no person whatsoever. However, the trade-off is also obvious: the customer experience is terrible, and the website alone may not be able to resolve the customers’ more complex needs. 

Some businesses have applied a lighter touch. They try to direct people to their webchat by displaying it prominently on their website and suggest using it wherever possible. People still have the option to reach out however they choose, but businesses are trying to attract them to a lower cost option that still involves potential help from a real person if necessary.

This is more tolerable for customers, but you still need to keep people’s preferences in mind - and accept that you may not be able to redirect them. For instance, more than 38% of customers prefer to call a company to resolve most or all issues, according to CCW Digital research, and in fact, over 52% of Baby Boomers will drop a brand if they can’t speak to a person. Redirecting your customers can be a potential solution, though, if the conditions are right.

Unify Customer Service Channels

If you’re looking to reduce costs and potentially improve your customer service, unifying your customer service channels is a great option, though it requires some initial investment to achieve those long-term payoffs.

Most businesses are currently paying for separate platforms and/or vendors for each of their customer service channels. On top of paying for all of that, they need different skill sets and thus different teams to maintain and improve each channel, and the systems are likely siloed - meaning they’re either working hard to integrate and combine data across them, or they’re missing out on that potential business value.

Unifying your customer service issues would resolve all of those issues. So why not unify them?

The answer used to be “well, we can’t because the technology isn’t available” but that’s no longer the case.

Tools such as Amazon Connect, Lex, and the associated technologies mean you can combine the conversational customer service channels onto a single platform and use AI to enable customer self service - or route them intelligently when a live agent is required - to create significant efficiencies and cost savings. As an AWS Select partner, we use these tools to build our Unified Conversational Customer Service (UCCS) Platform, which is our approach to unifying customer service channels and data into a consolidated, intelligent platform.

It’s worth noting that unifying your customer service channels isn’t the right option for every business. If you have a smaller volume of customer contacts or if you only need to use one or two channels to serve customers, then it’s likely not a wise investment. However, if you’re an enterprise that places importance on the customer experience and you have a large contact volume, it is the direction we recommend.

To learn more about our Unified Conversational Customer Service Platform and its benefits, view our presentation from Gateway to Innovation, Customer Service Is Broken - It’s Time to Fix It.