Despite being one of the oldest forms of customer support, calls are still the most popular channel among customers. In fact, 76% of consumers prefer to contact a brand via , according to a study by CFI Group.
Offering support can reduce customer effort but also add costs you might be overlooking. If you want a clear idea of how your spending correlates with productivity in your call center, step one is calculating your cost per call.
Cost per call is a popular contact center KPI that measures how much money it costs a company to handle a single customer support call. This metric is essential to understanding your ROI on call center technology and the cost-effectiveness of your operations.
This article covers everything CX teams need to know about cost per call, including how to calculate it and reduce it (without sacrificing quality.)
5 Inputs You Need to Calculate Cost Per CallBefore you can calculate cost per call, you need to tally every expense for your call center. Here are five factors to consider:
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Labor is usually the biggest expense for customer support teams. This includes the cost of employing agents, supervisors, quality assurance managers, and directors.
To ensure you don&#;t overlook anything like employment taxes, it&#;s best to work with your CFO or accountant to get this information.
Factor in all expenses allocated to recruiting, hiring, training, and onboarding agents.
The biggest chunk of overhead comes from the cost of real estate for your call center. But even if your team is fully remote, don&#;t forget to factor in one-time setup costs such as hardware and servers.
This includes the fixed or per-agent license fees for customer relationship management (CRM) software, quality assurance software, learning management systems, helpdesk software, data warehousing, and systems.
Determine how many customer support calls your agents handled during a given time period. You can break this number down into calls per week, month, year, etc.
Organizing your expenses may take a while, but calculating cost per call is simple. Here&#;s the formula:
Total Call Center Costs ÷ Total Calls Answered = Average Cost Per Call
So, if your company incurred $75,000 worth of call center expenses last quarter and answered 22,000 calls, your formula looks like this:
75,000 ÷ 22,000 = $3.40 average cost per call
According to an analysis of 18 large companies with call volumes between 900,000 and 9 million, the industry benchmark for cost per call is between $2.70 and $5.60. However, that benchmark fluctuates depending on your industry.
For example, a brand with a small but loyal customer base that hires highly specialized agents might have a cost per call that exceeds the average. On the other hand, a retail company that handles relatively simple support calls with less experienced agents could have a lower-than-average cost per call.
If your cost per call is higher than average (or higher than what your budget allows), the issue usually boils down to two factors:
Here are five strategies to tackle both of those issues (without cutting corners in terms of quality).
Cost per call tells you if your agent interactions are cost-efficient, but it doesn&#;t tell you why. That&#;s where a customer service quality assurance (QA) program comes in.
Customer service QA is the process of reviewing agent interactions to see how well they follow your approved internal processes to resolve customer issues. During QA reviews, a QA manager listens to customer support calls and grades the agent using a scorecard (also called a rubric).
The grader assigns points for questions on the scorecard, such as, &#;Did the agent follow the approved escalation process?&#; Here&#;s an example of what a QA scorecard looks like:
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Conducting regular QA audits helps you pinpoint what causes long call times or frustrated customers. In fact, when monday.com increased their volume of quality audits, their average ticket handle time dropped from 24 minutes to 16.9 minutes.
Overstaffing during slow times or understaffing during busy times can drive up cost per call. Call center staffing is normally left to guesswork. But machine learning uses historical data to forecast future call volumes.
For example, you might discover that February and March are your slowest months, so you can reduce your staffing and therefore reduce your cost per call during that time period.
Sometimes QA data alone isn&#;t enough to help agents overcome roadblocks&#;you need to step into your agents&#; shoes to see exactly what they see during customer interactions. That&#;s where screen capture technology comes in.
Take tails.com, the pet food subscription company, for example. Their CX team noticed agents struggled to track down information to resolve support issues, leading to high Average Handle Times (AHT).
tails.com used MaestroQA&#;s Screen Capture feature to identify opportunities for improvement during calls, such as keyboard shortcuts, monitor configuration, and support ticket navigation. These small tweaks helped one agent reduce her AHT by 50%.
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&#;We&#;re able to see what goes on in a typical agent&#;s day in a big, new way,&#; said Daniel Jensen, quality and training team leader at tails.com. &#;Every second adds up when multiplied across the course of a day, week, month, and year...It could be the difference of thousands of tickets.&#;
Routing calls to the agents with the right expertise keeps your call center operations as efficient as possible. For example, agents who specialize in product demos shouldn&#;t field questions about return policies. However, manually routing calls is time-consuming and prone to human error.
To streamline your call center workflow, implement Interactive Voice Response (IVR) technology. This allows customers to connect to a specific support department via voice prompts, e.g., &#;Press 2 for account services.&#;
Ideally, when customers call, they should only be one degree of separation away from the agent who can answer their questions.
When agents are bogged down with tedious tasks, it creates a bottleneck in your support queue. Putting those tasks on autopilot gives agents more breathing room and reduces your cost per call.
For example, at the onset of the COVID-19 pandemic, ClassPass noticed their agents spent way too much time chatting with customers who wanted to cancel their subscriptions. ClassPass fully automated their cancellation process, saving them more than 6,000 days&#; worth of chat time.
Cost per call is one of the oldest and most popular call center metrics, but don&#;t make it your CX team&#;s sole focus. Exceptional customer experiences require a balance of efficiency and high-touch service.
Think of it like a restaurant: rushing customers through their meals might get you more people in the door, but they won&#;t come back (or advocate for you) if the experience was sub-par.
Ready to get 360-degree insights into your call center&#;s interactions? Request your demo of MaestroQA today.
Starting a virtual call center requires both upfront costs that you pay once and recurring fees you pay each month. First, let&#;s detail each of the initial and ongoing costs.
Initial setup costs run between $1,850 and $12,750. Increase these estimates if you&#;re purchasing hardware for more than one agent.
Ongoing costs run between $1,200 and $7,600 per month. Increase these estimates for larger teams since the price of many of these software fees is per user.
Like any business, opening a virtual contact center requires some startup fees and initial purchases. Here&#;s a rundown of the setup costs to expect.
To build a successful call center business, you need a solid foundation. With reliable legal advice, you can ensure your business is registered correctly. Legal experts can also provide you with service agreements for clients and contracts for talent.
Sites like ZenBusiness and LegalZoom connect you with professionals who can register your business in your state, prepare operating agreements, and even file for an employer identification number (EIN).
Costs vary based on the level of service you want, so budget between $199 and $2,000 for legal consulting fees.
Before you open for business, verifying you&#;re operating legally is also essential. In many states, call centers need a business license. Fees vary from $0 to $6,000, depending on the state.
A professional website is crucial for establishing your call center business and giving potential clients an easy way to contact you. When planning website costs, account for the domain registration, hosting, and development fees:
Budget about $550 to $1,200 altogether for your initial website setup.
As a call center owner, you have several options for getting your first clients. For example, you can respond to requests for proposals (RFPs), network within your industry, or do cold outreach.
However, one of the fastest ways to reach potential customers is by using Google ads. With search campaigns, you can get your business in front of prospects when they search for your services.
To run an initial Google ad campaign, plan to spend at least $500 monthly. If your keywords are particularly competitive, budget up to $2,000 to land clients.
Whether you hire experienced or novice agents, expect to spend at least some time on onboarding and training. Naturally, you must show agents how to use your call center&#;s tools and processes and familiarize them with your clients.
A team distributed across multiple regions or countries needs a cloud-based solution. With platforms like TalentLMS, you can upload training resources and create custom courses for your team.
TalentLMS plans start at $89 per month and support up to 40 users. For up to 1,000 users and more complex course setups, plans start at $569 per month.
Contact center agents need the proper hardware to implement their training and do their jobs well. Generally, the most critical items for call center agents are a reliable laptop and a noise-canceling headset.
Sometimes, you may also need to provide agents with mice, keyboards, and other accessories. Plan to spend about $500 to $1,000 on essential hardware for each agent.
From salaries to software to insurance, contact centers have plenty of ongoing costs. Here&#;s a list of what to expect each month.
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A successful contact center needs a reliable team. Typically, you start small and scale up as you sign new call center clients. That means your total salary costs increase as your team expands.
So, how much can you expect to pay each employee? Average salaries depend on agent location.
To hire a call center agent in the United States, you can expect to pay an average monthly salary of $3,000 to $3,500. The average monthly salary for a call center agent in the Philippines is about $450.
Keep in mind that salary is just one cost of hiring employees. Depending on your employment contracts and the location of your team, you may also need to budget for taxes and benefits like health insurance and paid time off (PTO).
Platforms like Deel can help you process payroll, pay taxes, and manage benefits for international employees.
One of the biggest perks of running a virtual call center is that your team can work from almost anywhere. With the right cloud-based contact center management software, you can manage your team&#;s work remotely while still ensuring a good customer experience.
Is specialized software necessary for call centers? In short, yes. Contact center software manages automatic call distribution and callback queues for more efficient handling. It can also automate cold calling for sales teams.
Which virtual call center software should you choose? Look for a solution with these features:
How much should you expect to pay? Plan to spend between $50 and $200 per agent per month. Platforms like Zendesk cost $25&#;$149/agent per month for outbound and $69&#;$149/agent per month for inbound call centers.
If you plan to offer more than just call center services, you may also need customer support software. Rather than routing or recording calls, these tools create support channels on your website.
With a tool like Intercom, you can manage a variety of tasks, such as:
Intercom pricing starts at $74 per month when billed annually. This base price includes two seats and 1,000 customers reached. You may need to budget more if you have a large team or far more customer interactions.
Contact center management and customer support software can help you efficiently handle chat and systems. However, if you need to track agent analytics and improve team productivity, you want employee time tracking software.
A tool like Time Doctor can handle everything from scheduling and time cards to payroll and productivity. Here&#;s how it can benefit your workflow:
How much should you budget? Time Doctor starts at $7/user per month for the Basic plan and increases to $10 for the Standard plan and $20 for the Premium plan. Time Doctor also offers enterprise pricing for large teams.
Most contact center software automatically creates records of customer interactions. However, since you can&#;t always sync data between these tools, you could end up with multiple records for the same customer across platforms.
To consolidate your customer data and keep complete records, use a CRM. Most major CRMs sync with customer support and contact center software, so you don&#;t have to worry about updating multiple records.
The HubSpot CRM Suite starts at $30 per month, which includes two users and supports up to 1,000 marketing contacts. The Salesforce Sales Cloud CRM starts at $25/user per month and requires an annual contract.
No matter what type of call center you run, you&#;re likely to have a lot of numbers to crunch. While free tools like Google Sheets can certainly track expenses and revenue, they aren&#;t true accounting tools and can&#;t process payroll for you.
Budget instead for dedicated accounting and tax preparation software. These platforms may cost a little more than free tools, but they save lots of time and hassle&#;and help you avoid tax and accounting oversights.
Time Doctor supports integrations with Gusto and other popular payroll tools. Using both platforms, you can monitor employee timesheets and process payroll much more efficiently.
If your virtual call center relies on a distributed team, you won&#;t need an office space to manage. However, you likely need lines and high-speed internet to oversee clients and agents. You may also need data packages for agents.
When uptime is a priority, a reliable internet connection is essential. In most cases, you need a business package that supports multiple lines, high-speed data, and video.
Internet costs often vary based on location. However, options like the Comcast internet package for small businesses start at $45 per month for the first line.
Ideally, you&#;ll retain most of your initial contact center clients. However, you need to plan for at least some client churn. Once you&#;ve built a great team of virtual call center agents, you may be ready to scale up your business.
By running always-on marketing and advertising campaigns, you can continue to boost awareness around your business. These campaigns can also help you connect with potential customers.
Where should you market your call center? Networks like Facebook, X/Twitter, and LinkedIn are ideal for organic social media marketing. Expect to pay $300 to $1,000 per month for marketing.
For advertising, Google ads can also be a wise investment. Plan to budget a minimum of $10 per day or about $300 per month on each network.
The types of insurance a typical business needs depend on the location of the company headquarters and its agents, plus the kind of work the company does. For example, virtual businesses like call centers may not need as many types of insurance as a business with a physical presence and tangible goods.
However, it&#;s still essential to protect your business with general liability and data breach (also known as cyber liability) insurance. General liability insurance costs around $30 per month, while cyber liability insurance costs around $125 monthly.
Get started with employee time tracking software
You can set your virtual call center up for success with thoughtful planning and the right tools. Book a Time Doctor demo to see whether our employee time tracking and workday analytics software is right for your business.
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