Did you know that despite the rise of digital customer service channels, phone calls remain one of the most popular methods for consumers to reach out to brands? According to a CFI Group study, 76% of consumers still prefer contacting businesses via phone. While offering phone support can enhance customer satisfaction, it often comes with hidden costs. One of the most crucial metrics to understand in this context is cost per call.
This blog will guide you through everything you need to know about cost per call, how to calculate it, and strategies to reduce it without compromising on service quality.
Read More: Optimizing Your Call Center Database for Maximum Efficiency
What Is Cost Per Call?
Cost per call is a key performance indicator (KPI) that allows contact centers to measure the cost of handling a single customer support call. This metric gives businesses insight into how efficiently their call center operates and helps gauge the return on investment (ROI) of their call center technology.
Understanding this metric is crucial if you’re trying to balance operational costs while maintaining a high standard of customer service. Cost per call is not just a number; it is an essential factor in improving overall business efficiency.
To calculate cost per call, you need to divide your total call center costs by the number of calls handled during a specific period.
For instance, if your contact center spends $75,000 and answers 22,000 calls in a quarter, the average cost per call would be $3.40.
Why Is Understanding Cost Per Call Important?
- Helps evaluate the ROI of call center technology.
- Provides insight into operational efficiency.
- Allows businesses to identify cost-cutting opportunities.
Factors That Affect Cost Per Call
When calculating cost per call, several factors come into play. These components significantly influence the final figure and should be carefully accounted for when assessing your call center’s performance.
Employee Wages and Benefits
One of the largest expenses in any call center is the cost of labor. This includes wages for agents, supervisors, managers, and other staff members, such as quality assurance personnel. On top of salaries, don’t forget to account for benefits and employment taxes.
Ensuring that you accurately calculate these costs can be tricky. It’s recommended to consult with your finance or HR team to gather precise data on this aspect.
HR-Related Expenses
Recruiting, hiring, and training new agents is another significant cost to consider when calculating cost per call. HR expenses include the costs associated with advertising job postings, onboarding new hires, and ongoing training programs that ensure agents are up to date with the latest protocols.
Without factoring in HR costs, your cost per call calculation will be incomplete and potentially misleading.
Call Center Overhead
Whether your team works from a physical office or remotely, overhead is another major factor that impacts cost per call. For traditional call centers, this might include real estate costs, utilities, and equipment. In contrast, remote teams may require one-time hardware investments or subscription fees for essential software.
Regardless of your setup, calculating overhead ensures you’re getting a complete picture of your operational costs.
Software Subscriptions
In today’s digital world, call centers often rely on several software platforms to operate efficiently. These can include customer relationship management (CRM) systems, helpdesk tools, and call routing solutions. Many of these software services are offered on a per-agent or per-license basis, adding to your call center’s ongoing expenses.
Be sure to include every software subscription in your cost calculations to avoid overlooking crucial expenses.
Total Calls Handled
The final piece of the puzzle is the total number of calls answered by agents. This number can vary depending on the time frame you choose—weekly, monthly, or quarterly—but it serves as the basis for calculating your average cost per call.
Ensuring that you have accurate data for the total number of calls is essential to creating a reliable calculation of cost per call.
How to Calculate Cost Per Call
Once you have gathered all the required inputs, calculating cost per call is straightforward. The formula is simple: divide the total call center costs by the total number of calls answered during a given period.
For example:
- Total call center costs: $75,000
- Total calls answered: 22,000
The result would be: $75,000 ÷ 22,000 = $3.40 per call.
This simple calculation provides a clear view of how much you’re spending on each customer interaction. Monitoring this metric over time helps in evaluating how your call center is performing and where you might improve.
What Is a Good Cost Per Call?
The cost per call can vary widely depending on several factors, including the type of industry you are in. According to a study involving 18 large companies, the benchmark cost per call ranges between $2.70 and $5.60. However, not all businesses will fall within this range.
For instance, industries that rely on highly skilled agents, such as healthcare or financial services, may see higher costs due to specialized training and expertise. On the flip side, retail businesses that manage simpler customer queries may have a lower cost per call.
Why Do Costs Vary?
- Industry type and customer needs.
- Agent experience and specialization.
- Call complexity and average handle time (AHT).
Ways to Reduce Cost Per Call Without Compromising Quality
Reducing cost per call is a delicate balancing act. It’s essential to cut costs without affecting customer experience. Here are some effective strategies to reduce costs while maintaining service quality.
Implement a Quality Assurance Program
A Quality Assurance (QA) program can help identify inefficiencies and areas where agents can improve. QA reviews analyze how well agents follow protocols during customer interactions, identifying issues such as long call times or poor resolution rates.
Regular QA audits ensure that agents are operating efficiently, helping reduce unnecessary costs. For example, companies like monday.com saw a significant reduction in their average handle time by increasing the volume of their QA audits.
Use Artificial Intelligence to Predict Call Volume Peaks
Staffing is one of the biggest challenges in managing call centers efficiently. Overstaffing during slow periods or understaffing during busy times can inflate your cost per call. Artificial intelligence (AI) can predict peak call times by analyzing historical data, allowing you to staff appropriately.
With AI, you can better manage workforce allocation, ensuring you’re neither overpaying nor under-serving your customers.
Review Call and Screen Recordings with Agents
Sometimes, the key to reducing cost per call lies in understanding how your agents work during calls. By using screen recording technology, managers can gain insights into areas where agents struggle. Whether it’s navigating multiple systems or finding the right information quickly, screen recordings help pinpoint obstacles.
For example, tails.com used this approach to improve workflow, which led to a significant drop in average handle times.
Optimize Call Routing with IVR Technology
Interactive Voice Response (IVR) technology can direct customers to the right department, minimizing the time spent on irrelevant queries. IVR systems allow customers to be routed efficiently, ensuring that each call reaches an agent with the right expertise.
By optimizing call routing, your call center can reduce handling time and overall costs.
Automate Low-Level Tasks
Low-level, repetitive tasks can bog down your agents, leading to inefficiencies and increased costs. By automating simple tasks, like handling cancellations or resetting passwords, you can free up your agents to focus on more complex interactions.
ClassPass is an excellent example of how automation can improve efficiency. They automated their subscription cancellations, saving over 6,000 days of chat time.
Conclusion
Reducing cost per call in your call center is an essential step toward improving operational efficiency without sacrificing the quality of customer service. By understanding the factors that affect cost per call and implementing the right strategies—such as AI for forecasting, QA audits, and automating routine tasks—you can manage costs effectively while continuing to provide high-touch support.