How to Reduce Customer Support Costs: Guidelines to Follow

Here is a quick quiz for you as a business owner: what is the most pivotal issue you should focus on to bring your company’s ship to the bonanza harbor of success? The quality of your products? The strategy of expansion? The revenue increase? The development of your company app? The launching of a contact center? Cost-saving policy implementation? All of them are certainly of paramount consequence, but any big-time executive will tell you that the first thing you should invest in is providing adequate customer support. Thus, the correct pick is setting up a contact center, a prerequisite for reaching your ultimate goal of satisfying your clients.

Why do you need customer support service?

Customer satisfaction comes from people's rewarding experience when dealing with your company. You are deeply mistaken if you think marketing high-quality products is enough to win and retain clients. Surveys maintain that over 70% of consumers will likely disrupt cooperation with companies if their customer service is poor. Conversely, 86% of people are ready to pay more (up to a quarter of the product price) to get a good service.

What customer service would anyone like to experience? It is quite evident: the one where employees understand your needs and want and go out of their way to help clients. A good service team treats customers respectfully, handles complaints efficiently, accepts returns gracefully, and acts on client promises. Perfect customer service does all that plus exceeds customers' expectations.

What makes good customer service indispensable?

• It represents your company’s brand and image. Customer service is your only means of direct communication with the customers. It is the channel through which your agents can tell them of your mission and values as well as of your advantages over competitors.
• It is a competitive edge in itself. Trying to be the best in your niche is the coveted dream of any company. Good customer service gives your business a prodigious boost which will eventually let you snatch away a fair share of your rivals' audience.
• It is a source of direct income. As customers confess, half of them increase their purchasing if a company’s service was a part of their positive experience. Thus, by prioritizing customer service you will enhance your revenues.
• It fosters customer loyalty. Naturally, purchasing more from you means staying longer with you. Why should clients seek elsewhere if you deliver? Contacting your service team spells interacting with real-life humans – the activity customers trust more than communicating with machines or surfing the internet. And trust is a foundation of loyalty.
• It wins you new clients. If customers have had a good shopping experience three-fourths of them will recommend you to their family and friends thus expanding your client base. This word-of-mouth, in turn, attracts other customers triggering a landslide chain reaction.
• It provides insights into customers’ experiences. Your service team can furnish abundant information about the way clients feel purchasing your products. Instead of wasting your time and money on holding regular surveys, you can charge your employees with asking some probing questions. As a result, you will get plenty of tips on how to improve your strategies, in general, and your individual products, in particular.
• It allows you to stay proactive. Having top-notch customer service means not waiting for clients to report issues. Adopting a proactive approach you can reach out to customers to make sure they are satisfied with the product. In case trouble has been detected you can call people who bought the problem product from you (even if they aren't aware something is wrong with it) and offer a solution. Thus, you will show your customers that you are permanently engaged in troubleshooting and upgrading your goods.
• It saves you money. The chief cost-saving asset of customer support is explained by a simple truth: keeping clients is invariably cheaper than acquiring new ones. According to experts, if you manage to raise customer retention by just 5%, your profits will soar by a quarter. So investing in customer service will lower your total operating costs.

The financial reason was mentioned last but in fact, it is foremost in any business owner's mind. So how much does it cost to start a customer support service?

A pretty penny: Calculating the cost of customer service

Typically, support service is affected at a call center, which sounds expensive. For any thrifty businessperson, optimizing expenditures is a bread-and-butter issue, so they approach customer service costs in the same way. Yet, before making plans to reduce call center costs, you should realize what the constituents of the sum that you will have to fork out are.

There are several metrics that are used to tally the cost of customer service but to figure out any of them; there is a basic calculation to be performed. It all starts with summing up all expenditures within a certain time span on the staff salaries, operational costs (including management, rent, utilities, and the like), software and IT infrastructure expenses, business tools and telephony costs, and all other smaller items you will need to set up a call center. Got it? This total cost is the first factor you will use in further calculations. Other metrics include:

• Cost per call. It is the principal parameter used to fathom the efficiency of customer service. To reckon it, you should divide the total cost by the aggregate number of calls processed within that period.
• Average calls per agent. This index is instrumental in gauging the involvement of employees in handling calls. To determine it, you should divide the total talk time of agents within a certain period by the number of answered calls per agent. This ratio may fluctuate depending on the type of calls an agent receives, the average time necessary to handle a call, and even the season (for instance, after holidays, a great number of returns is typically imminent).
• Abandon rate. This percentage is measured when you divide the number of abandoned calls (that is the cases when a customer hung up never talking to the agent) by the total number of calls. Typically, an acceptable abandon rate doesn’t exceed 5%, although the figure may differ depending on the industry standards. To keep it low, call center employees should offer a callback to give customers a choice between waiting on line and being reached by the support service when it is convenient for them.

• The average speed of the answer. This parameter is related to the previous one and shows how long it takes the support team to answer a call. In the digital world of today, this ratio may relate not only to telephone calls but to web chats, text messaging, and other communication channels. To figure it out, one should divide the total wait time of answered calls by the total number of such calls.
• Average handle time. This is the most complex factor associated with the meantime that elapses between the actual call and the completion of the tasks related to it. To gauge it, you should first add the total talk time, the total wait time, and the total wrap-up time and then divide the sum by the abandon rate. The optimization of this parameter is affected by automating the processes involved in the task solution.

All these parameters are important for detecting how cost-effective your call center's work is. However adequate the customer service cost may seem, business owners are likely to look for ways to curtail such expenditures.

How to reduce customer support costs: Effective steps to take

When searching for appropriate ways to reduce call center operating costs, executives must realize that this optimization is not to be implemented at the expense of service quality. Instead, such measures should seek to balance an impetus for staying lean with the aspiration, which never means that customer support quality should be prioritized. With this aim, the following steps are considered the most expedient.

Step 1: Hold an audit

This is what you should start your optimization with. Analyze the above basic metrics to see where your team gets on, like one o'clock, where a band-aid would suffice, and where severe problems are in evidence. It is those pinch points that will require most of your attention. Besides, by performing an audit, you may discover that you are still paying for services that you no longer need.

Step 2: Focus on staff training

Qualified employees are your chief asset. But it would be naïve to expect such people to appear one day on the threshold of your office and offer their services. Competent staff should be fostered within the organization. To eventually have such personnel at your disposal, you should hire people who are a good fit for the job, train them adequately, and provide them with regular coaching to keep them well-honed for accomplishing the necessary tasks.

The key to success in creating a proficient team lies in adopting effective training plans that emphasize on-the-job training. This will both cut down on rev-up time for new hires and accelerate the learning process, which will ultimately reduce cost per call.

Step 3: Institute agent activities monitoring

There is no other way to ensure your agents' service quality. By monitoring calls, you will clearly understand your employees’ performance and discover how the clients respond. Besides, you will be able to control the staff schedule adherence. According to a study, just 20 minutes “short” on schedule adherence by one agent translates into 1,000 neglected calls a year – a prodigious figure!

However, while carving out a job for supervisors, don't overdo it with their number. After all, being overstaffed with supervisors is the wrong solution if you aim to reduce call center costs.

Step 4: Leverage digital communication tools to the maximum

An effective call center should keep abreast of the latest IT advancements and utilize integrated software designed for this purpose. It presupposes employing regular telephony, automatic call distribution, interactive voice response, skill-based routing, and call queuing. Business tool integration is a big plus for such software since it will enable receiving additional information about the caller (like previous purchase history and contacts with the company) to improve the service and make it more personalized.

One software solution rapidly gathering momentum is CTI (computer telephony integration), which links together computers, telephones, text messaging, fax, live chat, and other communication media. Experts claim that utilizing this tool allows for reducing the cost per call by a third.

Step 5: Outsource customer support

Delegating customer support to a third party is the most sensible financial solution. Taking this step will relieve you of the necessity to implement all or some of the above-mentioned strategies for reducing the cost of support services. Now, it will be the outsourcer’s headache.

Outsourcing customer support services: A budget-saving perspective

Of course, hiring an outsourcer will cost you money. But in this case, the investment is better placed than if you opt for an in-house call center. You won’t have to splurge on rent, software, utilities, salaries, and stationery piecemeal (which is always more expensive). Moreover, you can forget about the nuisance of hiring and training the personnel (which incurs paying the recruiter and coaches to do that), and waiting for the educational process to be completed before the staff can actually get down to work. Addressing an outsourced call center, you receive a competent team that, with a little fine-tuning, is ready to tackle the job head-on.

A huge boon of such an option is upward and downward scalability opportunities, which is hardly possible with an in-house support service. The latter's personnel may experience peak hours when they are overwhelmed by a deluge of calls and can't react to all of them. Sometimes, a shoulder season finds a huge part of them minding their own rather than business-related errands. Yet, you keep them on your payroll no matter how busy they are. The outsourced call center will always keep the lines manned, and you will only pay for the job.

You should find one that will deliver to maximize the benefits of an outsourcing call center. By employing the services of Simply Contact you will have a qualified team of experts in the field at your disposal. Our competent personnel possess sufficient skills and technologies to handle clients’ complaints and provide all possible assistance customers may require. Besides, our services won’t cost you a fortune, so by cooperating with us, you will receive West-European quality at an East-European price.

Conclusion

Keeping the clients loyal and aspiring to win new ones are the cornerstones of any business focused on expansion and financial success. A call center is an essential tool that is utilized to that end but keeping one within your company is rather expensive. By outsourcing customer services, you can adopt a cost-saving approach to maintaining a close rapport with your clients, allowing you to provide them with a comfortable experience of cooperating with your company.