11 Call Center Cost Reduction Tips That Protect Customer Experience

For many businesses, the call center is the heartbeat of customer service, where relationships are built and trust is earned. Yet, operational costs can consume up to 68%-77% of the call center’s budget, making funds allocation a critical priority for sustainable growth.

Call centers anticipate cost spikes for several reasons, including salaries, training programs, software licenses, and infrastructure. While cutting costs sounds tempting, where do you draw the line for quality assurance and satisfied customers?

Thus comes the adoption of advanced technologies to optimize call center costs. In this blog, we will dive into practical and proven strategies for you to achieve this balance. Whether running an in-house team or outsourcing call center operations, these insights will empower you to save money, improve efficiency, and delight your customers.

How to Calculate Average Cost Per Call?

Call center cost per call is a major KPI that estimates the amount spent to handle one customer support call. It provides valuable insights into the efficiency of your call center operations and the cost-effectiveness of your resources, such as software, personnel, and infrastructure.

The formula to calculate cost per call is:

Cost per Call = Total Call Center Costs / Total Number of Calls Handled

Step-by-step explanation

Identify Total Call Center Costs: This includes all operating costs related to running the call center, such as:

• Agent salaries and benefits
• Technology costs (e.g., software and hardware)
• Overhead expenses (e.g., utilities, rent)
• Training and development costs

Determine the Total Number of Calls Handled: Count all incoming and outgoing calls managed by the call center over a specific period (e.g., a month)

Divide Total Costs by Total Calls: Divide the total operating costs by the total number of calls handled to get the average cost per call.

Let’s understand this with an example

Let’s assume the following details for a call center’s monthly operations:

Total Call Center Costs: $50,000

• Salaries and benefits: $30,000
• Technology expenses: $10,000
• Overhead: $5,000
• Training and miscellaneous costs: $5,000

Total Number of Calls Handled: 10,000

Using the formula: Cost per Call = $50,000/10,000 i.e., Cost per Call = $5

Result: This means the average cost of handling one call in this call center is $5.

11 Smart Strategies for Call Center Cost Savings Without Compromising Quality

Achieve exceptional call center performance with practical strategies designed to enhance customer support while optimizing costs and minimizing operational call center expenses.

1. Improve First Contact Resolution (FCR) by Training Agents

First contact resolution is a key metric for call center operators as it helps them address how often customer inquiries are resolved during the first call. This assessment helps eliminate the need for follow-up calls, reducing call volumes.

You can achieve this ability by effectively training your agents, providing access to better customer details, and allowing them to make timely decisions. Your employees must have exquisite problem-solving skills, product knowledge, and call center software understanding to traverse complicated settings more efficiently.

FCR is a direct indicator of customer satisfaction, and having agents with the most appropriate skills can help you reduce overhead per-call costs.

2. Reduce Inbound Calls by Enhancing Self-Service Support Options

Reducing inbound calls is one of the most effective ways to reduce call center costs while empowering customers to resolve their queries independently. Self-service options, such as interactive voice response (IVR) systems, chatbots, and a comprehensive knowledge base, can help customers find answers without speaking to an agent.

A knowledge base is crucial as it provides customers access to detailed FAQs, step-by-step guides, and troubleshooting resources. This centralized repository of information reduces average handling times (AHT) and provides a single source of truth for customer’s queries.

Implementing self-service options lowers call volumes and allows your agents to focus on complex inquiries that require human intervention. Eliminating the resources spent on routine queries can help you focus on more pressing customer support solutions.

3. Leverage AI and Automation

AI and automation have transformed how call centers operate, enabling businesses to reduce costs while maintaining high service quality. AI-powered chatbots and virtual assistants can handle routine queries like account balances or order tracking.

For example, a company using an AI chatbot on its website can effortlessly assist customers with routine inquiries, such as order tracking or account updates. This allows human agents to focus on resolving more intricate or sensitive issues.

You can also consider the following strategies to leverage AI and automation for call center cost savings. Here’s what you need to know:

• Predictive Analytics: Forecast call volumes to align staffing with demand, avoiding overstaffing. Use AI for dynamic scheduling based on agent skills/availability.
• Smart IVR Systems: Upgrade IVR with NLP to route calls, reducing misdirection and wait times accurately. Integrate with CRM for personalized responses.
• Scaling Down Human Resources: With automation taking over routine tasks, you can potentially scale down the number of human agents needed for peak times, although maintaining a balance is key for customer satisfaction.

Leverage AI and automation to streamline operations, reduce costs, and empower your call center to provide efficient and personalized customer support at every touchpoint.

Also Read: Call Center Challenges: Solutions Backed by Experts

4. Use Cloud-based Software to Make Calls

Cloud-based phone software can be a game changer in reducing call center expenses. All customer data is stored in the cloud, eliminating the need for physical infrastructure and costly hardware equipment for storage purposes.

Moreover, cloud technology helps you work remotely as a call center service provider, further reducing office expenses. Agents only need a browser and Computer Telephony Integration (CTI) to work efficiently, saving on maintenance costs.

Cloud-based VoIP softphones protect your operations from breakdown and provide digital access to customer information from any region. Since the software provider handles updates and support, they also reduce IT expenses.

5. Evaluate KPIs Regularly

There are many KPIs that businesses must overview regularly to lower call center costs and maintain an effortless customer experience. These include:

• Occupancy Rate: This measures the percentage of an agent’s time spent handling calls and performing after-call tasks compared to idle time. A balanced occupancy rate ensures agents are neither overburdened nor underutilized.
• Call Abandonment Rate: It tracks the percentage of customers who hang up before their call is answered. A high abandonment rate indicates long wait times, which can impact customer satisfaction.
• Average Handling Time (AHT): It measures the average time it takes to resolve a call, including talk time and after-call work. Lower AHT signifies efficiency, but it should not compromise service quality.
• First Contact Resolution (FCR): It tracks the percentage of issues resolved on the first call, reducing the need for follow-ups, enhancing customer satisfaction, and lowering operational costs.
• Customer Satisfaction Score (CSAT): This KPI reflects customer satisfaction with the service provided. Achieving a high CSAT score ensures loyalty and reduces the need for repeat calls.

Regularly evaluating these KPIs helps identify inefficiencies, improve agent performance, and optimize overall call center operations.

6. Mitigate High Volume Customer Support Using AI Chatbots

AI-powered chatbots can help call center operatives to shift routine queries on these machine-learning systems. These tools provide instant customer responses and are available 24/7 to improve overall efficiency in handling basic questions.

AI chatbots can also gather relevant customer details with demographics, name, age, query, and category type, enabling agents to personalize their support strategy.

7. Use Skill-based Routing to Support Customer Satisfaction

Transferring customers between agents can be frustrating, especially when their issues remain unresolved, and skill-based routing eliminates this problem. It directs calls to the most qualified call center agents based on their skill set and the customer’s specific needs.

Most call center software includes features to route calls using advanced algorithms, considering factors like the caller’s location, inquiry type, previous interactions, and demographic data.

The telephony software matches customers with agents with the necessary skills, training, or language proficiency. It helps effortlessly resolve customer queries.

Skill-based routing improves customer satisfaction and reduces call center costs by streamlining operations and avoiding unnecessary complications.

8. Analyze Calls Using Speech Analytics

Speech analytics can help businesses optimize customer interactions in real-time by interpreting voice data.

Speech recognition with artificial intelligence, natural language processing (NLP), and machine learning capabilities identify inefficiencies contributing to increased cost per call in call centers.

By using speech analytics, businesses can:

• Pinpoint common customer pain points or service gaps to address them proactively.
• Highlight areas where agents can improve, such as tone, language, or product knowledge.
• Ensure agents adhere to company guidelines and regulatory requirements.
• Understand sentiment to tailor responses and provide a more personalized experience.

Speech analytics streamlines operations by offering actionable insights, improving customer service, and helping to lower operational costs.

9. Hire Remote Call Center Agents and Outsource Call Center Operations

Hiring remote call center agents or establishing a virtual call center can significantly reduce overhead expenses. Without physical office space, businesses save on utilities, equipment, furniture, office supplies, and employee amenities.

Remote work also allows access to a broader talent pool, enabling businesses to hire skilled agents from cost-effective locations. Similarly, outsourcing call center operations to third-party providers can further lower costs.

Outsourcing reduces the need for in-house staffing, training, and infrastructure while leveraging the expertise of specialized teams. Both approaches enhance operational efficiency, reduce expenses, and allow businesses to focus on core functions.

10. Integrate IVR Automation

Automatically generated customer support menus and interactively designed IVR systems allow customers to access basic information such as guides, troubleshooting tips for digital products, instant resolvents to queries, subscription details, etc.

This strategy speeds up issue-solving and reduces the workload on live customer care operators. Using this technology, you can also handle routine inquiries, such as checking account balances, updating personal information, or scheduling appointments.

For example, integrating IVR systems into healthcare providers’ call support can help hospitals route calls based on callers’ inputs. It can route an appointment scheduling call to a scheduling specialist while billing inquiries to the accounts department.

11. Using IT Software Tools to Manage Tickets and Automate Repetitive Tasks

Help desk software allows tracking and prioritization of customer issues, enabling faster resolutions and reducing response times. Automation handles tasks like follow-up emails and ticket updates.

Centralized call support systems like Tragofone provide agents with access to customer histories, ensuring consistent and personalized support. This approach minimizes manual errors, improves workflows, and reduces staffing needs for routine tasks.

Reducing Your Call Center Costs With Tragofone

Reducing call center costs without compromising customer satisfaction requires strategic planning that can streamline call center operations, enhance the operational workforce, and effectively cut expenses.

Implementing strategies such as remote hiring, outsourcing, and skill-based routing further boost per-call productivity while reducing overhead expenses. You can leverage advanced tools like AI, IVR automation, speech analytics, and cloud-based calling softphone mobile apps to focus on end-user goals.

Tragofone offers a robust, white-label VoIP softphone solution designed to help businesses optimize their call center operations.

FAQs About Saving on Call Center Expenses

• What are the primary factors contributing to high call center costs?
  High call center costs stem from staffing, training programs, technology investments, infrastructure, and operational inefficiencies, all of which demand careful resource allocation to minimize expenses.

• How can technology help reduce call center expenses?
  Technology like AI, IVR, and automation reduces routine workloads, optimizes workflows, and minimizes reliance on extensive staffing, cutting operational costs significantly.

• What are some effective ways to optimize staffing costs in call centers?
  To optimize staffing costs in call centers, organizations can leverage advanced workforce management tools, hire remote agents, outsource non-core functions, integrate self-service options like IVR and AI chatbots, and invest in training. Adopting cloud-based technology and VoIP softphones like Tragofone reduces infrastructure costs and enables remote work.

• Can outsourcing reduce call center costs without compromising quality?
  Yes, outsourcing to specialized providers lowers expenses while leveraging their expertise to maintain or enhance customer service quality.

• How can training programs impact call center cost reduction?
  Training improves agent efficiency, reduces average handling time, and minimizes errors, directly lowering operational costs while enhancing customer satisfaction.

• What is the average cost per call for a call center?
  There’s no one-size-fits-all answer to this, as the cost per call hinges on numerous factors. The industry type, geographical location, and complexity of the service play pivotal roles. A tech-heavy support center in a high-cost region will naturally incur higher expenses than a simpler customer service operation in a more cost-effective area.