The call center industry is notorious for its high operating costs, making it imperative for businesses to find innovative ways to cut expenses while maintaining or improving the service quality. This comprehensive guide will explore the top 12 call center cost-reduction strategies to help unlock your business’s full potential. Implementing these tactics will save money and enhance customer satisfaction and overall business performance.
A great number of contact centers are struggling to make ends meet but are still reluctant to make the necessary changes to achieve a better cost to benefits ratio. This article is here to tell you that cost reduction needs to be a top priority for contact centers worldwide in the present-day crisis environment.
Failing to do so puts the business at risk and allows competitors to outperform. Companies must take concrete measures like automation, technology-driven service delivery models, and right-sizing staff numbers. As we will see, reexamining their operational processes and investing in new-generation technologies can enable contact centers to streamline operations and reduce costs while improving customer experience. Remember: cutting costs is often painful, but it’s necessary for business survival in these tough times.
Often, people associate cutting costs with damage control. But our experience of over 20 years in the Contact Center Industry taught us something else: the best form of damage control is growth. – Steve Bederman, President of NobelBiz
1. Optimize Workforce Management
One of the most significant contributors to call center costs is labor. To reduce these expenses, it’s essential to optimize your workforce management practices. Implementing an efficient scheduling system and workforce management software can help you avoid overstaffing or understaffing, ensuring you have the right number of agents available to handle customer inquiries. Additionally, offering flexible work arrangements and utilizing remote agents can further minimize labor costs.
How can workforce optimization help in managing call center expenses?
Workforce optimization is crucial in addressing the challenges of managing and reducing call center operating expenses. Call centers can maximize productivity and minimize costs by effectively scheduling agents, monitoring performance, and implementing targeted training programs. This process involves data-driven decision-making and using advanced tools such as workforce management software, which enables managers to accurately forecast call volumes and optimize staffing levels accordingly.
The advantage in a contact center is that as soon as you’re comfortable with a virtual environment and you see the benefits of cost reduction and the ability to manage, you’re going to feel that you don’t need to do anything but start hiring people all over the world. – Steve Bederman, President of NobelBiz
And that allows for a much more integrated broad workforce, allowing contact centers to take on more business worldwide.
2. Implement Call Deflection Strategies
Call deflection strategies, such as using self-service options like IVR (Interactive Voice Response) systems and chatbots, can help reduce call volume and call center costs. By providing customers with quick and efficient alternatives to speaking with a live agent, you can decrease your reliance on human resources and save money in the long run.
According to Gartner, Inc., by 2022, 50% of major enterprises would have failed to combine interaction channels, resulting in a disconnected and walled customer experience devoid of context. However, increasing the usage of digital channels presents a business opportunity for contact centers. They simplify agents’ and customers’ lives by streamlining the contact process. Nonetheless, maintaining many channels is complicated, and developing a smooth customer journey is a significant problem. Indeed, customer service’s major difficulty is creating a consistent experience across all touchpoints. As a result, call deflection plays a critical role in contact centers for this transition.
Learn more about Call Deflection Tools and Strategies for Contact Centers in this article.
3. Use Data-Driven Insights
Leveraging data-driven insights can help you identify inefficiencies and areas for improvement in your call center operations. By analyzing key performance indicators (KPIs) and call center metrics, you can pinpoint trends and patterns that could be contributing to higher costs. This information will enable you to make informed decisions on optimizing processes and reducing expenses.
By leveraging ‘data’ as a strategic enterprise asset, companies can accelerate or scale digital transformation and contribute to high revenues and business growth. According to McKinsey, high-performing organizations are 3X more likely than others to report data and analytics initiatives contributed at least 20% to EBIT (from 2016–19).
4. Invest in Training and Development
While investing in training and development might seem counterintuitive when cutting costs, it can lead to long-term savings. By ensuring that your agents are well-trained and knowledgeable, you can minimize call handle times, increase first-call resolution rates, and reduce the need for additional staffing. Moreover, continuous training helps agents stay up-to-date with industry best practices and improves overall customer satisfaction.
Call Center Training should not be a process that only occurs during the onboarding process but should be ongoing, with repetition and reinforcement. The ever-changing environment inside a corporation should allow for the efficient conveyance of information to frontline personnel. – Michael Tamer, CEO of Proponisi
Find out more about Michael Tamer, CEO of Proponisi, and his perspective on “The Need for Ongoing, Consistent, and Repetitive Training.”
So what impact does employee training have on call center operating expenses?
Investing in employee training is a long-term strategy for reducing call center operating expenses. Well-trained agents can handle customer interactions more efficiently, leading to higher first-call resolution rates and reduced average handling times. Additionally, comprehensive training programs can help improve employee satisfaction and reduce turnover, a significant cost factor in call centers. By focusing on continuous learning and development, call centers can ensure their workforce remains skilled and adaptable to changing business needs.
5. Embrace Automation and AI
Integrating automation and artificial intelligence (AI) technologies into your call center can save significant costs. Implementing AI-powered tools like chatbots and virtual assistants can help you handle routine tasks more efficiently, allowing your agents to focus on more complex issues. Additionally, automating repetitive processes can reduce human error and improve overall operational efficiency.
According to an analysis by Boston Consulting Group, A.I. can reduce conversion costs by up to 20 percent, with up to 70 percent of the cost reduction resulting from higher workforce productivity. But A.I. is also expensive, time-consuming, and out of the question for many small businesses and bootstrapped startups.
According to a study by BotsCrew, implementing chatbots can save businesses up to 30% on customer service costs by deflecting calls to self-service options. Let’s say you have a team of 15 customer support agents.
The average customer service rep salary in the US is around $35k per year. So, your customer service team salaries cost you nearly $525k/year (35000*15).
By implementing chatbots, you can save around 30% or more, giving you $157k in savings per year. By providing customers with quick and efficient alternatives to speaking with a live agent, you can decrease your reliance on human resources and save money in the long run.
To learn more about AI and its impact on the contact center space, listen to Steve Bederman On the Engati CX Podcast here.
What role does technology play in reducing call center costs?
Adopting advanced technology is pivotal for call centers looking to minimize operating expenses. Cloud-based solutions, AI-driven chatbots, and advanced analytics tools can significantly reduce infrastructure and staffing costs while improving customer support quality. For instance, integrating AI-powered chatbots can handle routine queries, freeing up agents to focus on more complex issues. Moreover, leveraging analytics tools can help identify patterns and trends, allowing managers to make informed decisions about staffing and resource allocation.
6. Optimize Call Routing
If you’re running a call center, you know that good call routing is the difference between keeping your customers happy and having them hang up on you. The first thing to know about call routing is that it takes inbound calls and directs them to the people or teams who can best handle them.
Call routing lets you ensure that every customer gets their questions answered quickly and efficiently while making it more likely that they’ll return to your company in the future.
Efficient call routing is crucial for reducing call center costs. By implementing skills-based routing, you can ensure customer inquiries are directed to the most qualified agents, reducing call handle times and increasing first-call resolution rates. This not only lowers costs but also improves customer satisfaction.
Learn more about Call Routing: Functionalities, Advantages, and Strategies for Contact Centers in this blog article.
7. Utilize Cloud-Based Solutions
Adopting cloud-based solutions for your call center infrastructure can save considerable costs. Cloud-based platforms offer scalable, pay-as-you-go pricing models that allow you to only pay for the resources you need, eliminating the need for costly on-premises hardware and maintenance.
Recent studies have shown that companies can save 15-40% on infrastructure costs by migrating to the cloud. Migrating on-premise or legacy application workloads to the cloud can be extremely transformative for helping your business update IT infrastructure more efficiently.
This is where NobelBiz steps in. We have over 20 years of experience offering comprehensive and personalized solutions to contact centers worldwide. Our telecommunication services and cloud contact center solution can meet the needs of any contact center, regardless of size, industry, or activity (Inbound, Outbound, or Mixed).
NobelBiz provides round-the-clock technical support with a dynamic shift system and a well-structured on-call program, ensuring prompt responses to all inquiries. Unlike other CCaaS vendors who charge extra for premium 24/7 assistance, NobelBiz offers this service as standard. Moreover, every contact center we serve is assigned a dedicated representative responsible for seamless operations at all times. With time, this approach helped us to become known as the promise keepers of the contact center industry.
Hidden costs always grow behind broken promises.
The sad truth is that many contact centers end up paying more than they bargained for with their telecom, software, or CCaaS providers. Being stuck in long-term contracts with subpar providers, contact centers pay big in terms of business friction and mental anxiety.
Bad infrastructure paired with slow and heavy servicing protocols can take a heavy toll on ANY contact center’s short- and long-term performance. The effects of inefficient and outdated infrastructure can be disastrous, leading to long wait times for customers and agents. This results in customer dissatisfaction and negatively impacts operational efficiency, leading to increased costs, reduced productivity, and revenue loss.
Therefore contact centers must adopt a system that provides robust infrastructure paired with streamlined servicing protocols optimized for today’s ever-evolving market demands. By doing so, they can improve overall performance while ensuring customer satisfaction through shorter waiting times, personalized interactions, and issue resolution at the first point of contact – ultimately saving both time & money!
Here’s the alternative.
NobelBiz is committed to keeping these hidden costs in check by designing and deploying one of the best-performing servicing systems as a contact center telecom and software provider.
Cutting costs in a smart way is probably the most important management skill of all. This is true, especially in times of crisis. And for contact centers, there are two ways to look at this. You either reduce personnel – which implies reducing operations – OR you consider a new provider with better overall costs & ideally, better service – which implies the possibility of expanding operations. – Brad Butler, Contact Center Software Consultant @ NobelBiz
NobelBiz designed its Telecom services and Software solutions to drive growth while significantly reducing costs.
The NobelBiz Voice Carrier Network
The ways in which a smart telecom contractor can help you reduce costs are much more straightforward. But if you are dealing with any type of calls, inbound or outbound, you probably know how crucial this aspect is:
Cost-per-minute: This is probably the highest cost when running a call center. At NobelBiz, we confidently affirm that we have the best cost-per-minute in the entire contact center industry. Do you have any doubts? Get in touch and find out!
No long-term contracts: The NobelBiz Voice Carrier Network is designed with the sole purpose of serving the contact center industry. Our telecom solution is so good that we don’t need fishy tactics to retain clients. Instead, our contracts are straightforward and subjected to a healthy dose of common sense. You will be surprised.
Service quality: Because our goal is to become the ultimate provider for the contact center industry, service quality is at the top of our priority list. We will guarantee crystal clear voice quality, legal backup, smart routing, 99,999% up-time, high-grade security, and easy setup.
The most important thing you need to know about our Telecom services is that we offer the best cost-per-minute and a redundancy network made of more than carriers across the world, plus a host of performance-enhancing features:
- Smart Routing to PSTN numbers or SIP
- On-demand toll-free and local numbers provisioning
- Web-based admin tools
- Local Caller ID features
- Carrier-level compliance rules and filters
NobelBiz OMNI+ Cloud Contact Center Software
Most people associate omnichannel with a completely virtual (cloud-based) contact center. And yes, a complete virtual solution will eliminate your office-related costs. But there is so much more than meets the eye…
NobelBiz Omni+, our Omnichannel Contact Center Solution, can integrate all contact channels (phone, social media, webchat, and SMS) into a single, unified platform. This will ensure that your consumers have a pleasant and memorable customer experience.
Incorporating all the latest technologies in terms of online communication and customer experience, the NobelBiz OMNI+ platform is a real gateway to the online communication niche trending in the contact center industry.
Besides reducing costs, the main advantage of using an online omnichannel solution is that your contact center can access new and exciting internet-wide business opportunities.
- Virtually limitless integrations in terms of channels and platforms
- Highly compatible with the Voice Carrier Network
- Your entire team can work from home in a productive and secure online platform
- A breathtaking number of customizable features to enhance productivity and boost efficiency.
If you have ever considered cutting costs, join us for a chat and see how we can help you.
8. Focus on the First-Call Resolution
Improving first-call resolution (FCR), rates can lead to significant cost savings by reducing the need for follow-up calls and callbacks. By providing agents with the right tools, resources, and training, you can empower them to resolve customer issues more effectively during their initial interaction.
FCR is a measure of customer experience (CX), providing insight into improving a company’s CX strategy. It is also a good indicator of how responsive a company is and its operating cost efficiency. FCR drives other customer service-related metrics, such as customer satisfaction (CSAT), customer effort or the amount of effort a customer has to put in to interact with a business, customer interactions, and average spending.
Read more on How to Fast-Track Your First Call Resolution FCR in 9 Easy Steps in this article.
9. Monitor and Reduce Average Handle Time
Call Center agents’ main goal is to handle as many calls as possible effectively and without wasting time. However, it is obvious that insufficient training, incompatible interfaces, and other factors might increase the Average Handling Time. The AHT is a KPI that contact centers always strive to improve. Of course, there are rational answers to this organizational challenge, including reducing call center AHT while ensuring quality work and performance.
Reducing average handle time (AHT) is critical to lowering call center costs. By tracking and analyzing AHT, you can identify opportunities to streamline processes and improve agent efficiency. Providing agents with effective tools, resources, and training can help them resolve customer issues more quickly, reducing AHT and lowering overall costs.
AHT = DMC (length of a conversation) + MEA (mean duration of a call on hold) + ACW (after-call work or duration of back-office processing following the call)
10. Explore Outsourcing Opportunities
Outsourcing certain call center functions can effectively reduce costs, especially for smaller businesses or those with fluctuating call volumes. By partnering with a reputable outsourcing provider, you can access a skilled and experienced workforce at a lower cost than hiring and training in-house agents. This approach can also offer greater flexibility in scaling your operations up or down to meet changing business demands.
How can outsourcing contribute to lowering call center expenses?
Outsourcing call center operations to third-party providers is a popular strategy for businesses seeking to reduce operating expenses. By outsourcing, companies can take advantage of economies of scale, lower labor costs, and access to specialized expertise. However, choosing a reliable outsourcing partner who can consistently deliver high-quality service and maintain brand reputation is essential.
11. Analyze and Reduce Call Center Attrition
We all know that the turnover rate is a thorn in every contact center’s side. We also know that the more you complicate an agent’s life, the more likely they will leave. This is why using an agent-friendly platform will noticeably impact your workforce and overall attrition. Not to mention that the training is simplified and the process shortened.
High attrition rates can be a significant source of call center costs, as recruiting, hiring, and training new agents can be expensive. By analyzing the causes of attrition within your call center and implementing targeted strategies to address them, you can improve employee retention and reduce turnover-related expenses. This may involve offering competitive compensation packages, creating a supportive work environment, or providing opportunities for career advancement.
How to reduce the call center attrition rate?
Recruit the right call center agents, improve communication, provide continuous training, use a unified solution, and more.
When they come into my call center, if they have experience or not, I discuss fear, which is a morbid anticipation of something that hasn’t happened yet. – Richard Blank, CEO of Costa Rica’s Call Center.
Good training includes developing the soft skills required to handle challenging circumstances when dealing with a high turnover rate. Richard employs several basic but powerful tactics. Discover more from our podcast episode on The Engagement Toolkit to Fight Attrition.
Check out 8 Ways To Reduce Call Center Attrition Rate in this article.
12. Conduct Regular Cost-Benefit Analysis
Last but not least, conducting a cost-benefit analysis of your call center operations can help you identify areas where expenses can be reduced, and efficiencies can be gained. By evaluating the return on investment (ROI) of various technologies, processes, and strategies, you can make informed decisions about which initiatives to prioritize and where to allocate resources for maximum cost savings.
A cost-benefit analysis can help you determine the impact of your call center operations on customer satisfaction and loyalty. By measuring first-call resolution rates, average handle time, and wait times, you can identify areas where improvements are needed to enhance the overall customer experience. This type of analysis is essential for any business looking to optimize its call center operations while minimizing costs. With the right tools and strategies in place, you can achieve significant savings without sacrificing quality or service levels.
Reducing call center costs without compromising service quality is a delicate balancing act. By implementing these top 12 call center cost reduction strategies, you can optimize your operations, enhance customer satisfaction, and ultimately unlock your call center’s full potential. Remember, it’s essential to monitor performance continuously, leverage data-driven insights, and invest in training and development to ensure long-term success. Embrace innovation and stay ahead of the curve to create a more efficient and cost-effective call center.
Michael McGuire is a contact center industry expert with almost two decades of experience in the space. His experience includes roles as Director of Contact Center Digital Transformation at NobelBiz, and as Director of Operations at FLS Connect, managing multiple call centers. As President of Anomaly Squared and Targeted Metrics, Michael successfully transitioned companies into remote operations and significantly boosted revenues. With a strong background in customer service, leadership, strategic planning, and operations management, Michael excels in driving growth and innovation in the call center space.
Mike is also a proud Board Member for R.E.A.C.H Trade Group, promoting consumer protection and satisfaction and Co-host of the Off Skripted Podcast – a show about Life, Call Centers and everything in between.