A lot has changed since the first contact centers were formed in the late 20th century. Technology has introduced new channels. Customers have increased their expectations. And global events have fundamentally changed how contact centers operate.
But despite all these changes, one priority has remained steadfast: Cost Per Call.
Cost Per Call (CPC) can be defined as the total operational and capital expenditures needed, on average, for a contact center to complete a customer service call. Today, that formula has been expanded to include new channels like chat, email, and text in a total Cost Per Contact metric.
Both measures of CPC provide an indicator as to how much a brand spends on customer service, and how associated costs rise and fall over time. An above-average CPC may suggest customer service is weighing down a brand’s bottom line, or that customers are experiencing too many unresolved requests. On the other hand, an abnormally low CPC may suggest a contact center is operating with outdated tools or resources, and needs greater investment.
In either case, calculating and monitoring a contact center’s Cost Per Call can be a valuable exercise. But a nuanced approach to the metric can help further modernize how brands view the value of their contact center.
Calculating Cost Per Call
It’s easy to define CPC as simply the total cost of running a contact center divided by the total number of customer interactions over a given period. But the complexity of modern customer service requires a widened definition of “cost.”
The all-up investment brands make in customer service starts with the cost of hiring, training and retaining agents. This may include recruitment campaigns, outsourcing premiums, and incentive-based compensation. To enable agents, brands also spend on hardware and software, management teams, training, and operational costs both for on-premise workers and remote employees.
According to CXToday, industry benchmarks suggest that an acceptable CPC could range anywhere between $2.70 – $5.60, including direct labor, indirect labor, and operational expenses.
However, the biggest pitfall of the CPC metric is that it runs the risk of oversimplifying the goal of contact centers. While benchmarks and averages can provide helpful guidelines as to what a “good” CPC is, the truth is there is no golden number.
CPC metrics vary wildly across contact centers, depending on their industry, value proposition, size and even time of year. As such, contact center leaders shouldn’t spend too much time trying to find out what their magic number is or should be.
Instead, they should divide the “cost” portion of the formula into specific investment buckets and define clear goals for each. In doing so, contact centers can gain a clearer picture of where their operating costs go, and whether or not they’re helping them find their sweet spot.
The Cost Per Call sweet spot
For an individual contact center, a healthy CPC is one that can demonstrate an improving return on investment – no matter what that number is.
If that number is higher than in previous periods, it should be verifiable that your agents are better resourced with top-of-the line tools and that customers are receiving improved service. A higher CPC can also be backed up by improved revenue generation metrics for each call, or lower customer churn rates.
Any additional CPC cost should target these priorities:
- Improving service (and thus lowering churn or increasing revenue)
- Increasing agent retention/productivity
- Lowering a secondary or associated cost
- Improving operational efficiency
These investments may include those that make it easier to offer customers upsells, or increase the speed at which you follow up with prospective customers. In competitive industries like insurance or travel & hospitality, missing these opportunities can add up to millions of dollars of unrealized revenue each year.
In industries like retail or subscription-based commerce, where customer experience is often a key differentiator for brands, a single poor service experience can be enough for customers to cancel an order or change brands. Any investment made into a contact center should first have a clear path to increasing or retaining customer spend.
Additionally, any investment that increases employee retention or lowers hiring costs can lower the overall investment made in recruitment, thus balancing out a contact center’s total budget.
Many of today’s modern solutions have the potential to decrease CPC by lowering long-term spend in several areas. Those solutions and strategies are discussed below.
How to lower Cost Per Call without sacrificing service:
- Invest in automation. Contact Center Automation allows companies to automate their most common customer service calls while empowering agents to focus on more complex and nuanced customer challenges. It has been proven to slash staffing costs up to 50% while returning CSAT scores on par with those of live agents.
- Focus on omnichannel. Just as CPC should encompass more than just the voice channel, contact centers should invest in their omnichannel future holistically. When they do, they can avoid the costly pitfalls associated with a siloed approach to customer service channel improvement.
- Personalize based on customer history. Personalized omnichannel experiences can delight customers, lower Average Handle Time, decrease abandonments, and improve upsells and renewals. Contact centers should ensure their systems can identify customers and interact with them based on their personal history with your product or service.
- Gain real time analytics. Unlocking the black box of contact center interactions can pay huge dividends. Contact Center Automation collects CSAT in real-time for every conversation, as well as granular data based on conversation transcripts. Managers can map customer dispositions to automation outcomes and A/B test scripts to ensure constant improvement.
- Plan for unpredictability. As the last few years have demonstrated, the contact center environment can be shaken by global challenges in an instant. Adding flexibility to your operations helps avoid costly events like outages, seasonality, or health crises, and can be accomplished in just weeks with pre-trained automation solutions.