8 Ways to Reduce Customer Service Costs

High levels of service quality and improving the customer experience result in more loyal customers, higher turnover, and better profits.

But customer care professionals tasked with delivering these greater levels of service quality also feel pressure to reduce service costs while justifying the return on investment.

The holy grail is reducing customer service costs while simultaneously improving the service quality of the contact center. We’re here to show that this goal is not only achievable but that the steps involved are a virtual requirement for companies that want to remain competitive.

How to Reduce Customer Service Costs

Manage All Your Support Channels from the Same Platform

As businesses evolve, they often add new modes of communication with customers. It’s quite common for small businesses to perform telephone support alone at first, then add other channels like email support, live chat, social media, and forums as they expand.

Unfortunately, this often leaves companies with a multitude of different platforms to work with. Usually, getting all these systems to work well together is a huge drain on time and resources. Agents are often required to do double work, entering customer information twice. They’re required to learn how to use all different systems, so training takes longer and more mistakes are made. Instead, use omnichannel helpdesk software.

Omnichannel Helpdesk Software

Using a single omnichannel helpdesk software platform for all your customer support, therefore, has tremendous advantages. All support can be made using a single system, whether the customer emails, calls, or makes a social media post.

When a contact request comes in, agents can immediately see all the interactions your company has had with the customer through all channels. And when they update the data, it’s reflected in a singular, central system that everyone can access.

Encourage Self-Service

According to research by Nuance, two out of every three customers would prefer to help themselves through self-service support. Embracing self-service support kills two birds with one stone—we’re able to offer the customer experience people want while also reducing contact volume. Let’s look at some ways you can implement smart self-service solutions for customer support.

Chatbots & AI

AI in customer service was initially controversial because of its relatively basic implementation at the time, but now that technology has caught up, the benefits of artificial intelligence in customer service when implemented correctly can be profound.

89% of consumers stated in a Nuance survey they would prefer to engage in a conversation with an intelligent virtual assistant instead of searching through web pages or a mobile app for a solution.

Online Knowledge Bases

A Coleman Parkes survey found 91% of people would prefer to use a knowledge base if it’s available to them before contacting customer support. Online knowledge bases offer proactive support, affording customers a way to find the information they need on your products and services.

Online knowledge bases should be written accessibly for customers. Avoid jargon and separate basic introductory content from more technical information.

Community Portals

A community portal, like an online knowledge base, works as a first port of call for a customer looking for assistance on your products or services. As many people prefer to find answers to simple issues themselves rather than contact a support agent, this can take pressure off your call center, reducing the number of agents you need manning the phones.

Moderated community portals are also excellent for building loyalty in your brand. Ambassadors for your products and services on the community portal who help others can be rewarded, making them see your company even more positively and bringing in new customers with their enthusiasm.

Community portals also give your company an air of authority. If new customers see many people are discussing your products and engaging with your brand, it’s excellent social proof you’re a company worth dealing with.

Interactive Voice Response

Interactive voice response (IVR) provides a recorded message with options for all callers. Its principal use is for customers to specify the type of query they have so they can be automatically routed to the customer support team best capable of handling their query.

IVR can improve the customer experience by directing callers back to the last consultant they spoke to, or routing them to a CSR that speaks their chosen language, for instance. Optimized intelligent routing reduces abandon rates and queue times.

Self-service IVR can take some of the pressure off your agents by allowing customers to check the details of their accounts, make payments, and get updates on order status without needing to speak to a human. If they need to speak to a human, the agent will already be able to see the customer’s details on their screen, speeding up the service and improving the experience.

Focus on Agent Training and Retention

Your agents are the heart of your call center as one of the few human touchpoints your customers will experience. Yet, often, not enough is done to train agents and keep them on board.

High turnover negatively impacts performance, as callers often deal with new customer service representatives (CSRs) that leave customers dissatisfied. This has knock-on effects, even on your more experienced agents, as they feel more rushed and frustrated at having to deal with irritated customers.

Two things crucial to retaining a strong, experienced team that works together well are agent training and agent engagement.

Agent Training

Initial agent training is highly important as it sets the tone for what’s expected of new hires. New agents shouldn’t be thrown in at the deep end, as may immediately begin to resent their position and become disengaged.

This is just the start of agent training, though, as it must be an ongoing process. As your products, services, processes, and focus inevitably change, you must give agents the relevant training to keep up.

Effective training allows agents to field calls more quickly, improving KPIs. They can handle more types of calls, perfect if you employ skills-based routing, as it reduces costs. Soft-skill training leads to agents offering service, resulting in higher customer satisfaction.

The benefits of agent training go on and on, so don’t consider it an expense when you need to take an agent off the floor to train them. Consider it an investment.

Agent Engagement

An engaged agent is more motivated. They feel an emotional commitment to the organization and its goals. They care about their work, and they exert extra effort without being asked to. Unfortunately, 64% of U.S. employees say they aren’t engaged in their work.

Here are some steps you can take to build agent engagement:

Recognize individual and team contributions
Have open communication channels for employees and encourage two-way discussions
Foster a culture of belonging where employees feel they can be their authentic selves
Have clear routes for growth and promotions within the company and help employees succeed
Give agents the tools and training they need to perform well, improving job satisfaction

Use a Skill-Based Routing System

A skill-based routing system directs calls to agents who are qualified and experienced to handle them. The different contact requests you receive are split into several skill sets and agents are similarly categorized based on their ability and knowledge to handle each type of request quickly and professionally.

Skills-based routing systems have several benefits as they:

Reduce call transfers between agents
Improve first contact resolution rates
Allow available agents to better utilize their time
Enable multi-skilled agents to handle several types of requests
Boost agent satisfaction, as every agent is better empowered to answer the requests they receive

All these benefits lead to higher agent retention, lower customer service costs, and a better customer experience.

Improve your First Contact Resolution Rates

Your first contact resolution (FCR) is important for keeping costs low. When a customer needs to contact your company multiple times, it is a huge drain on efficiency. Additionally, it also heavily affects customer satisfaction scores. First contact resolution has a direct correlation with customer satisfaction, so it should be one of your most important KPIs to work on.

Improve your first contact resolution rates by:

Accurately identifying when a customer’s issue has been conclusively resolved
Allowing a balanced call handling time long enough for issues to be resolved
Using skill-based routing
Improving agent training
Offering better self-service solutions

Prioritize Proactive Support

Proactive support is anticipating the type and amount of support your customers need. This approach allows you to offer customers the answers they want before they decide to contact you, reducing your inbound support volume significantly.

Proactive support can mean sending targeted messages to new customers explaining certain features of your products periodically or when they first use them. It’s also about setting expectations early, announcing key information like service outages or delivery delays in advance and clearly on your website.

Anticipate where your customers might first need support and offer it to them there. For instance, inventory management company TrueCommerce saw a 20% reduction in inbound call volume when it added self-service support and proactive support reminders into its app.

Choose Your Metrics and KPIs Wisely

Your key performance indicators (KPIs) are great tools for getting a high-level view of how your contact center operations are running. You can use your metrics to find where your call center is strong and where it could use improvement.

Some of the KPIs to keep track of, depending on your goals, are:

FCR (first contact resolution)—The percentage of issues that could be resolved on the first contact with the customer
Average speed to answer—The average time it took for a customer to speak to someone or get a response from an agent
AHT (Average Handle Time)—The average time it takes for a call to be handled in its entirety
CSAT (Customer Satisfaction Score)—How satisfied a customer was with an interaction
NPS (Net Promoter Score)—How loyal a customer is to your company and how likely they will be to promote it positively to others

If you choose a multi-channel approach, additional KPIs become relevant. You could consider the number of emails responded to within two hours, for instance, or the number of social media posts engaged with over a 24-hour period.

Listen to Customer Feedback and Act on It

Customer feedback is a vital part of understanding where you can best focus your efforts to improve the customer experience. Use customer feedback to:

Improve the products and services you sell
Identify gaps in agent knowledge
Inform feedback for call coaching sessions
Help design a streamlined, proactive support process

Getting customer feedback doesn’t need to be expensive or time-consuming. You can gather feedback automatically using surveys, with AI service data analyst software offering insights on service performance, quality, and value to help improve your decision-making process.

Personalize your KPIs

The important thing here is to pick and choose the KPIs that are relevant to cost and customer experience. Too many customer care professionals focus on industry-standard KPIs when those KPIs are too generic or not relevant to their business.

Another pitfall is to get bogged down in hundreds of KPIs so you can’t see the wood for the trees. Information is power, yes, but focusing on too many KPIs at the same time typically results in poor gains for all of them.

Ask yourself:

Which KPIs affect our customer service or costs the most?
How do we effectively measure these KPIs?
What must we do to improve on these KPIs?

Summing up

Savings can be made on customer service costs while improving the performance of your contact center.

Reduce the demands on your contact center by encouraging self-service through knowledge bases, chatbot AI, community portals, and interactive voice response systems.

Get the best from your agents by using a skills-based routing system, offering excellent ongoing training, and keeping agent engagement high.

Monitor your most important KPIs and have an ongoing plan to improve them. Use customer feedback to find holes in your customer service, and plug those holes. All these things can improve your customer service performance at little-to-no additional cost to you