11 Strategies To Reduce Customer Service Costs Quickly

Running a customer support function effectively is costly. 

But not doing so can be even costlier as you might lose the customers who are the very source of your revenue.

So, as a growing business, how do you provide impeccable customer support while sticking to the budget? 

Compromising the quality of support is never an option, even when your inboxes are loaded with tickets and customer calls don’t seem to end. 

Thankfully, there are several strategies that can help you reduce customer service costs while keeping your Customer support quality top-notch.

From training your agents to creating a self-service help center for reducing customer support tickets, this blog has not one but 11 brilliant ideas to take your customer support to a whole new level without spending a bomb. 

Let’s learn how to maximize the return on investment while keeping the customer support costs as lean as possible. 

Why is good customer service critical to business success?

Even if your marketing and sales efforts are on point, it is eventually the quality of your customer support that keeps you ahead of the curve. 

Besides boosting your bottom line, good customer service improves your brand image through word-of-mouth marketing. 

You may have the best-in-class products, but what will make customers stick to your brand for long is the experience they receive every time they contact you for help. They would be happy to buy a good product and get VIP treatment in return, as opposed to buying an amazing product and feeling unvalued later. 

Investing in good customer service might feel like an added burden in the beginning. But being consistent with it will surely pay off in the long run in the form of repeat purchases, positive brand image, and improved customer loyalty. 

In fact, research by Microsoft revealed that for 96% of customers, superior customer service is crucial for their loyalty towards a brand. 

When loyalty improves, customer retention increases. And as research shows, even a 5% increase in retention can lead to a 25% increase in profit. 

In a nutshell, the quality level of your customer service determines the profit you generate and the loyalty you earn!

How to Calculate Customer Service Cost

Every business today wants to stay on budget and yet generate maximum returns. This rings true for every department, including customer support. 

If how to reduce the cost of your customer support is on your mind, you first need to understand how to calculate and monitor it. Once you know where your money is going, it will be easier to control unnecessary expenses and cut customer service costs. 

While there are multiple metrics to analyze customer service cost – cost per call, cost per ticket, average calls per agent, etc., we will be focusing on just one metric in this section. 

Here is a simple formula to calculate customer support cost per ticket: 

Let’s see this formula in action. 

To come up with the total customer support cost for a specific time period, add up all the expenses incurred during that period. The expenses can include equipment maintenance, software subscriptions, employee salaries, and the like. Next, add the total number of tickets your support team resolved in that period. 

For example, suppose your total support expenses for a month are around $4500. The tickets your team resolved in that month are 45. So, the cost per support ticket would be – 4500/45, i.e., $100 for every ticket. 

11 Strategies to Reduce Customer Service Costs

Now that you know how to calculate the cost of customer service, it’s time to explore the various ways you can adopt to reduce this cost and achieve customer delight. 

1. Train Your Agents to Provide Stellar Support 

While you work on long-term strategies to level up your customer support, your support agents do the real work on the ground. They are always on the frontlines, fielding customer questions and trying their best to keep customers happy. 

Since agents are the very foundation of your entire support process, it’s vital to train them on specific skills and help them put their best show in every interaction. 

For basic issues, most customers prefer a self-service help center, but when it comes to complex matters, they like to talk to someone knowledgeable via phone, email, or chat. Therefore agent training should be your top priority if you want to level up your customer support while saving money along the way. 

Before you start the training process, identify the unique skills your agents have and the ones they are lacking. Once you know the strengths and weaknesses of your agents, here’s what you should do: 

✅ Help agents hone specific skills. For example, if an agent is good at communication, give him the opportunity to handle premium clients. This will hone their communication skills even more. 

✅ Route tickets to the right agents. For example, tickets for technical support can be routed to agents with in-depth technical knowledge. 

✅ Impart the necessary soft skills in agents. Conduct training sessions on how agents can be more empathetic, patient, good listeners, and most importantly how they can deal with customers with the right attitude.

Read More: What is Customer Service Training? Types, Benefits and Skills

2. Integrate Communication Channels for Seamless Support 

Customers expect top-class support regardless of how they contact you and when they contact you. 

One moment they will be raising a query on social media, and the other moment they will want to talk to your agents about the same issue.

Now, if these two experiences – social media and phone call, are not connected, the resolution may take longer than expected. You might have to transfer customers from one agent to the next for a basic issue that could have been resolved in a single interaction. 

So, how can you keep such hassles away and make the life of your agents and customers easier? 

Omnichannel customer support holds the answer. 

Integrating all communication channels can help you deliver high-value, consistent experiences across all touchpoints while keeping agent efficiency up and support costs down.  

Let’s see how: 

✅ Agents can track the context of the issue and provide speedy resolutions regardless of the channel.   

✅ Agents can easily transfer customers from one channel to another, without losing the context of the conversation. 

✅ It helps agents understand a customer’s journey across touchpoints and cater to their needs in a better way. 

When agents have all the pieces of customer interaction in a single place, they don’t have to go back to the drawing board and start the conversation from scratch. Instead, they can fully focus on the issue at hand and give prompt responses. This increases agents’ efficiency at work and, most importantly, reduces your service costs.

Read More: What Is An Omnichannel Customer Experience?

3. Capture Customer Feedback & Act on It

Improving customer service without breaking your bank balance is a continuous process in which customer feedback has a crucial role to play.  

While you are taking every necessary step to keep customers delighted and agents productive, still it’s always a good idea to do a reality check from time to time. 

Read More : Delight Your Customers & Agents With Knowledge-Centered Support

By capturing customer feedback, you get valuable inputs around not just customers’ pain points and agent performance but also the overall quality of your support process. Agents can relay customer suggestions, points of confusion, and other useful insights to the relevant teams and work with them to rectify the situation. 

For example, if a lot of customers have complaints about a particular product feature, agents can share the same with the product team. They can give customers an estimate of the time it will take to resolve the issue. 

This is a win-win situation. On one hand, customers get to voice their concerns, and on the other, it helps you bring the product close to what customers desire. 

You can collect customer feedback in different ways, such as: 

• Create NPS surveys to measure customer loyalty

• Track customer ratings on the tickets resolved

• Share surveys after a chat session 

• Add online survey forms to your helpcenter 

Here’s a quick video on how you can create surveys to get customer feedback. 

4. Embrace Self-Service for Instant Issue Resolution 

There are strong reasons why self-service is considered the best service.

Besides being lightning-fast and incredibly convenient, it makes customers self-sufficient, at least for basic issues. That means they are saved from the drudgery of waiting endlessly to talk to an agent to get a simple issue resolved. 

What does this mean for your customer service and the related costs? 

By creating a knowledge base for self-service, you can:

• Bring down your support tickets and hence your support costs significantly. No more calls, emails, and tickets for trivial matters!
• Let your agents fully focus on complex matters that need a more hands-on approach. A productivity booster indeed!
• Manage the customer support process even with a small team. No more expenses of maintaining a big team!

A knowledge base can be of tremendous help for your agents too. 

Did you know that employees tend to spend 19% of their work time searching for information? Imagine the number of issues agents can solve in this time!

With a self-help knowledge base, agents always have a handy resource to get the information they need to provide prompt customer support

5. Employ an AI-Powered Chatbot for 24×7 Support 

AI-supported chatbots are now dominating the customer service landscape, thanks to the super-fast speed and unparalleled cost savings they provide. By using artificial intelligence and machine learning, Chatbots are capable of answering basic customer questions in a matter of seconds. 

Chatbots leverage all your existing resources such as knowledge base, website, and customer databases to provide the most appropriate response. 

But the question is, how much can Chatbots help in reducing your customer support cost? 

Research by Chatbots Magazine shows that companies can save a whopping 30% of their customer support costs by employing Chatbots.

What makes Chatbots your ultimate cost-saving solution? 

✅ Offers 24×7 conversational assistance – Customers can ask a question at 3 in the morning or 11 at night and get answers right away. 

✅ No more training expenses – AI-supported chatbots are capable of self-learning from the diverse customer questions they handle. This helps them continuously improve the quality of support they provide, that too, without any specialized training. 

✅ Reduces Staffing Costs – Hiring and retaining competent customer support professionals doesn’t come cheap. Unlike agents, a powerful chatbot can handle unlimited interactions all at once. So, you can manage your customer support process even with a lean team. 

6. Streamline Ticket Management With Help Desk Software 

If your agents manually handle every ticket as it comes, chances are they will get burned out real soon. 

One of the best cost-saving ideas for businesses to bring down their support costs is to streamline ticket management. For this, all you need is a dedicated ticket management system that brings tickets from across channels in a shared space and automatically assigns them to the right agents. 

A robust help desk tool automates your support team’s workflow and takes care of all manual tasks, so your agents can fully focus on resolving the tickets. 

Let’s see how this tool can make the lives of your agents easier and help them work on more tickets in less time: 

• Respond faster with canned responses – Modern help desk tools offer canned responses to help agents answer repetitive questions quickly. These ready-made answers can even be customized to suit a customer’s situation and needs. 
• Automate ticket assignment – Agents waste plenty of time organizing and distributing tickets, which leaves them with little time to actually work on customer issues. Help desk software automatically routes tickets to the right agents who have the required expertise to solve them. 
• Let agents collaborate and work efficiently – Collaboration makes even the most challenging tasks easier to accomplish. With help desk software, agents can internally collaborate with each other and solve serious customer issues in less time. 

Employing the right help desk software can help your agents rise above all manual, repetitive tasks, and make the most of their time. 

7. Monitor Agent Performance for Maximum Productivity

Customer service managers are always encouraging agents to be their productive best at work, in order to get more work done in less time. 

Asking agents to be productive is easy, but actually tracking how productive they are at work is a real challenge. 

How do you monitor who has worked on which and how many tickets? How do you track customer ratings and assess agent performance? 

A powerful help desk tool comes with a built-in reporting system that helps you measure agents’ performance, as a group or as an individual. It gives a bird’ eye view of all your new, pending, and replied tickets. Besides, you have customer ratings to track how successful your agents are at keeping customers happy. 

Such insightful and comprehensive reports give a transparent picture of each agent’s performance. If you come across agents who aren’t performing up to the par, you can reach out to them, discuss their challenges, and find solutions for performance improvement. 

8. Be Proactive in Your Customer Service Efforts 

Being proactive helps you reach out to customers, even before they come to you for support. This gives you a definite edge as you can solve potential problems long before customers raise them and hence reduce your customer support cost.

Research shows that over two-thirds of customers want businesses to proactively reach out to them with solutions. This speaks volumes about customers’ need to not just get answers to issues but also to feel recognized and understood. 

Here is how you can reduce your customer support costs by being proactive: 

• Initiate conversations with customers via live chat. With live chat software, agents can monitor the activities of customers and initiate contextual conversations with them. For example, if a customer is browsing the pricing page, agents can start a conversation around pricing via chat. 
• Make the most of social media. Customers feel that social media is the #1 platform that businesses can utilize to connect with them. You can use social media to make announcements, share important updates, and build lasting relationships with customers. 

• Send automated emails and text messages. Being proactive also means you value your customers’ time more than anything else. Instead of waiting for customers to ask you for the status of an issue, keep them updated about the progress by sending automated messages.  

Doing these little things right can bring a world of a difference in how your agents work and customers respond. 

9. Hire the Right People With Relevant Experience 

One of the best ways to cut customer service costs is to hire the right people with industry-relevant experience for your team. 

Unskilled or inexperienced agents are nothing more than a burden on your team. They will not be able to handle as many customer tickets and will constantly interrupt their colleagues with trivial questions. In a nutshell, they will not be adding any value to your customer support team. 

That’s why hiring competent people is so crucial. 

Besides focusing on the new hires’ skills and experience, you should give due consideration to their long-term goals and staying potential. As voluntary turnover is costing businesses trillions of dollars, your aim should be to hire people who would stick to the team for a long time.

Moreover, you should also look at the soft skills agents possess and the willingness they have to learn and thrive. 

add highlighted part- Hire promising candidates, even if that means paying a little more than the market standard. A little investment in getting the right people on board who can do the job well, along with hiring tracking, will help you reduce customer service costs in the long run.

10. Let Customers Ask Questions & Get Answers in an Online Community

11. Focus on Your Support Staff’s Well Being

Customer service is a high-pressure job. How well you grow over the years depends largely on how excellent you are at customer service. That’s precisely why there is a lot of pressure on customer support agents to give their best shot, every single day and in every single customer interaction. 

But do you know how badly the exhausting process of attending to customer requests, day in and day out, can affect your support agents? 

In a bid to resolve tickets on time and prevent backlogs, agents tend to put in more hours at work. Overwork seems manageable for a few days when there are way too many serious concerns raised by customers. Left unchecked, it can kill productivity and even cause serious health problems. 

Investing meaningfully in your agents’ well-being today will help your agents be their productive best at work without burning out. Here are a few strategies you can adopt for your employees’ well-being: How to reduce customer service cost is a common question most businesses are struggling to find the answer to. More so, because customer support is seen as a cost center and not as a revenue generator. 

Well, we may have the solution you are looking for. 

Creating an online community or forum is one of the best ways you can reduce your customer service costs. Such interactive, question and answer platforms, give customers the opportunity to connect with fellow customers as well as prospects. They can post questions, discuss problems, and even share their experiences to help others. 

This means they can find help right away on the forum without approaching your support team. This decreases the ticket inflow and lets your agents focus on serious customer issues that really matter. 

Your agents can also keep a tab on everything that’s shared in the forum. Constant monitoring allows them to avoid any fake information to spread and identify the problems that concern customers the most. 

✔ Encourage your agents to take breaks. Ask them to take a little break after some hours of continuous work and then come back with renewed vigor. Short breaks make work seem light and keep the stress at bay. 

✔ Encourage them to take leaves – Taking a day’s break from work can do wonders for your agents. It gives them a respite from the daily monotony so that they can come back to work with more enthusiasm and positivity. 

✔ Offer perks to boost their morale – Improve your HR policies to include perks such as discounts on certain cafes, gift vouchers, or even a day off on their birthday. Such perks make them feel valued and appreciated. 

✔ Collect feedback from agents – Your agents may not be explicitly vocal about what they feel. You can create online surveys asking them about the challenges they face at work, the training they need to get better at their jobs, and the shift schedules they prefer. 

Give your support team the work-life balance they need and you will see them surpass all performance benchmarks. 

So, if you are thinking of how to reduce the business cost of your support process, remember that happy agents can lead to happier customers and lesser tickets. 

Save Money on Your Customer Service While Keeping the Quality Intact

Now that you have the answer to how to minimize the cost of your customer service, it’s time to take some action. 

You shouldn’t treat customer service as a cost center. Yes, it involves considerable expenses especially in the beginning, but isn’t it the same for all your departments? 

Your aim should be to reduce customer service costs without compromising on its quality.

Start by hiring the right people in your team and training them on various technical and soft skills. Collect customer feedback whenever possible and use cost-effective solutions like chatbots, knowledge base software, and ticketing tools to make customer support easier for your agents. 

Be consistent with your efforts and you will surely see your support costs decreasing over time!