9 Strategies to Reduce Your Customer Service Costs

Not every service issue requires high-touch engagement. The majority of these issues can be addressed through an AI chatbot or self-serve solution. These solutions allow you to increase efficiency. You get to scale up ops without linearly increasing the headcount on your customer support team.

This allows the customer service team to focus more on critical customer queries that need high-touch engagement, such as one-on-one customer interactions with an agent over call, chat, or video. Overall, your service becomes efficient without making any trade-offs with quality. It empowers the business to improve its bottom line.

Strategically, reducing customer service costs aligns well with the soaring costs of goods and services due to tariff uncertainties.

How to Strategically Reduce Customer Service Costs

Strategically, reducing customer service costs is all about precision. Eliminate waste while improving efficiency and CX. Below are some ways to do it intelligently.

1. Audit and measure your current customer service costs

Measure how much you currently invest in customer service. What’s the cost per ticket value?

Cost per support ticket = Total customer support spend ÷ Number of tickets resolved

Industry data show that the average cost per call in U.S. contact centers ranges from $2.70 to $5.60. If your analysis exceeds this range, strategic changes and automation can help bring it down. This analysis creates ample awareness about reducing costs.

According to research, 79% of companies don’t know their own cost per support ticket, lacking the baseline to make strategic optimizations.

Once you have identified the cost per support ticket value, go to the next steps. Break down expenses into three categories:

• Personnel costs for salaries, attrition, and benefits
• Operational costs for tools, outsourcing, and licenses
• Overheads for office space, hardware, and training

See which part of your team’s workflow consumes the most resources. This would be your baseline for prioritization. Auditing the service will ensure transparency while keeping you updated with the latest trends.

2. Consolidate tools into a unified communications platform

When your customer service tools are scattered everywhere, it increases costs and inefficiencies. Your team keeps hopping between incoming calls, live chat, social media, and email without achieving any customer or job satisfaction.

You need to merge all the channels. Nextiva, a unified communication platform, brings voice, SMS, email, chat, and CRM together in one place, eliminating any toggling required. Overall, the software lowers spend as you don’t have to pay for multiple tools for jobs that Nextiva can handle as a standalone product. It reduces your software spending. If the platform suits your user case well, you can sign a multi-year contract, which will help further optimize your software spend.

When all the tools come together, you’re empowered to reach conclusions and solutions faster. This shortens the average handling time (AHT), increasing the customer service agents’ productivity. Most importantly, when you scale or bring new people in, it’s easier for them to ramp up. They need to get their hands on Nextiva’s platform and try it out, instead of navigating the complexities scattered across different software.

Below are some low-hanging fruits when you’re looking to consolidate.

• Cut total communication costs: A cloud-based unified communication as a service platform enables you to reduce customer support costs by cutting hardware and maintenance expenses.
• Eliminate overlapping contracts: There are no unused or underutilized licenses of different software that cause overlapping contracts.

3. Expand and improve self-service options

Self-service is fast. Customers prefer it when they don’t need to rely on others for a solution. Around 67% of consumers prefer self-service over speaking to a rep. Customers can help themselves, provided the business supports them with the proper guidance.

Additionally, 74% of customers expect robust self-service tools, such as FAQ pages or chatbot support, yet many companies underinvest in these.

Even basic self-service, such as an interactive voice response (IVR), can reduce repetitive tickets significantly. If you want to create robust self-service for your business, here’s how you can do it:

• Build a comprehensive knowledge base (KB) of FAQs, how-to guides, and videos, and keep it easily searchable.
• Use chatbots or virtual agents for common queries, such as order status, password resets, and store hours. According to McKinsey, chatbots with speech analysis capabilities can save up to 30% on costs.
• Keep the self-service experience smooth by seamlessly handing off to an agent with full context if the bot or KB fails to resolve a problem.
• Set up IVR, allowing it to route calls to the right agent without requiring a human intermediary to analyze and connect.

Effective self-service helps your team deflect low-value work and keep experienced agents working on higher-value tickets. Naturally, a self-serve solution would save you money, and the cost per self-serve interaction would be in cents, compared to the cost per live agent interaction, usually in dollars.

Analyze your website metrics to discover what customers search for but don’t find. Then, add that knowledge and make it available and searchable for your customers.

4. Automate repetitive tasks across the customer journey

Multiple repetitive tasks in your agents’ workflow can easily be automated, for example:

• IVR routing: A contact center solution with an IVR can help you automatically route calls to the right agents based on keyword input or voice recognition.
• Ticket classification: AI allows users to automate tagging, triaging, and assigning tickets based on context.
• Follow-up reminders: Helpdesk or contact center software can automate triggered outreaches to check in after offering the required support.
• Canned responses: Keep a response ready for frequently asked questions in the form of a canned response to reduce typing while ensuring a consistent reaction tone.
• Predictive dialing: Automatically dials calls in an outbound call center to ensure agents only invest their time on connected calls.

These tactics reduce the repetitive workload, freeing up more agents’ time to invest in solving critical queries for a larger group of customers.

💡Nextiva AI can automate 90% of interactions. With a 50% increase in digital deflection and a 30% cost savings, isn’t it time to build your AI chatbot?

5. Train and retain agents more strategically

Agent churn is a hidden cost. High turnover means expensive recruiting and retraining. Terminating a call center agent costs $31,416 on average, including hiring and training a replacement.

Contact centers often see turnover rates of up to 45%, and those with poor retention spend disproportionately more on staffing. In contrast, investing in your people pays for itself.

Happy, well-trained agents work more efficiently and provide better service, preventing attrition expenses and assisting in cost reduction. This serves well for both agent and customer retention, as happy agents deliver better customer satisfaction, contributing to higher retention numbers.

The work environment you create within the organization plays a significant role here. If you have more new hires, it’s best to ensure they’re paired in groups with at least one or two customer service experts to handle tricky issues that come up. Moreover, empower these teams with AI tools to feel more supported, limiting the exhaustion from addressing repetitive queries.

When you’re training support agents, make sure you prioritize service quality instead of speed. The latter would be an outcome of AI, allowing the human element of service to focus on the quality and care that your customers expect and deserve. Keep service quality a top priority while coaching and training agents.

6. Prioritize first contact resolution

First contact resolution (FCR) aims to solve issues at the first contact. This is a critical metric for both cost and satisfaction. When FCR is low, customers call back or email again, doubling the work per issue.

When you work to improve FCR, every 1% improvement helps you save 1% on operational costs. It’s a one-on-one relationship. At the same time, customers love it, provided you’re offering it with customer satisfaction in mind rather than mindlessly rushing to ensure FCR.

To increase FCR, empower agents with knowledge and authority. Ensure they have access to customer history so they don’t have to go back and forth, asking customers to repeat information. There is AI contact center software that suggests relevant KB content or quick snippets from it in real-time, based on the actual context of the conversation. This feature is popularly known as Agent Assist.

7. Reduce time spent on each interaction (without rushing)

A lower AHT doesn’t always mean a good thing. However, it means fast and satisfactory resolution when the right tools and insights support agents.

Suppose your contact center agent gets a call from a customer, and the agent is well-equipped with the right technological interface. Here’s what will happen:

• CRM pop-up: A screen pops up with their information in the CRM, including details of the past interaction.
• Agent assist: The agent takes the call. Based on the conversation’s direction, their technological counterparts (AI agents) suggest relevant knowledge base articles or data, helping them address a customer’s issue promptly and confidently.
• Shortcuts: Agents have access to shortcuts for quick actions, such as processing refunds or placing a reorder.

The whole process was faster than usual, but it doesn’t rush a customer toward a solution. Such technological assistance ensures agents don’t trade off quality while striving to lower their average handle time.

8. Route calls smarter with AI and IVR

Intelligent routing ensures customers get to the right agent or resource immediately, cutting transfers and idle time. Configure your IVR and skill-based routing so calls aren’t stuck in a general queue. Modern IVRs use AI speech recognition or simple menu trees to steer callers. These technology solutions allow you to avoid costly routing mistakes.

AI helps these IVR and routing systems improve over time based on past interactions using natural language processing and machine learning capabilities.

Nextiva delivers a complete solution for contact centers, including real-time routing capabilities, IVR, and AI-driven recommendations. Most importantly, it’s compliance-friendly, freeing your team from IT headaches.

9. Proactively reduce ticket volume

Don’t wait for customers to call you when issues arise. Instead, turn a reactive approach into a proactive customer service strategy to reduce ticket volume. Use outbound communication and automation to reduce reactive instances.

Below are a few examples of proactive care. These are good food for thought to design tactics customized to your business case:

• Send proactive updates about order delays or outages: This keeps the customer informed and empowers them to be patient rather than panicking on the customer service front.
• Share tips and how-to content post purchase: This shows that you care. If customers have any doubts, you resolve them proactively, saving you from several urgent issues later.
• Send service alerts: Send service alerts across different channels like SMS, email, or push notifications. This keeps customers content that their case has been registered and prevents them from creating multiple tickets for the same issue due to a lack of communication.
• Send a bill reminder with relevant explanations: This is crucial because if an undisclosed bill comes out of the blue, it raises a concern from the customer, who is curious about what’s going on. If you share bill reminders with related context, it keeps customers aware. Any discussion related to this can happen proactively, rather than the customer clogging the support queue later.

This proactive approach to customer service not only reduces the load on support but also delivers a streamlined customer experience.

Build a Winning Customer Service Function With Nextiva

Cost savings in customer service don’t necessarily mean doing less; it means doing more with the required precision, with less. Nextiva supports this efficiency in customer service with a unified platform equipped with built-in automation and analytics.

It’s a best-in-class IVR provider with various omnichannel tools to relieve your team’s redundant load, helping them focus on cases that require their expertise. The platform suits the needs of businesses of different sizes and scales. Its pricing and feature set effectively accommodates all needs, including your customers’.

Try Nextiva. Add precision and efficiency to customer service cost-effectively.