9 Strategies to Reduce Your Customer Service Costs

Tariff uncertainty is driving up the cost of goods and services in 2026, and businesses can no longer afford inefficient support operations. High customer support costs can eat into profit margins. To protect margins without sacrificing quality, you must decouple headcount from growth.

Customer support is seen as a cost center, but with strategic approaches, it can become a great value driver. Not every service issue requires high-touch engagement. AI chatbots and self-service tools can resolve most routine customer queries. These solutions improve productivity, cut customer service costs, and let teams scale operations without adding agents at the same rate as demand.

This shift allows customer service teams to focus on complex, high-impact issues that require one-on-one interaction over calls, chat, or video. The result is a more efficient support operation that maintains service quality while strengthening the bottom line.

How to Strategically Reduce Customer Service Costs

Strategically, reducing customer service costs is all about precision. Understanding customer service cost drivers is the first step to managing them effectively and finding opportunities to reduce costs. Eliminate waste while improving efficiency and CX. Below are some ways to reduce customer service costs while offering good customer service:

1. Audit and measure your current customer service costs

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

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

Industry data for 2026 shows that the average cost per call in contact centers now ranges from $2.70 to $5.60. If your analysis exceeds this range, it indicates a high level of operational friction that can be solved through better tool consolidation.

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 and 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 customer service tools are scattered, it increases the toggling tax — the hidden cost of agents jumping between different apps per interaction. Nextiva, a unified communication platform, brings voice, SMS, email, and CRM together in one place. This reduces the average handling time and ensures that when you scale, new team members ramp up faster because they only have to learn one interface.

Nextiva 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 fruit 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 no longer just a way to save money; it’s what customers prefer. Around 67% of consumers now choose self-service over speaking to a representative for routine tasks. Effective self-service helps your team deflect low-value work.

The cost per self-serve interaction typically sits at just a few cents, compared to the cost per live agent interaction, which is measured in dollars. Analyze your website search metrics to see what customers are looking for but cannot find, then build that content into your knowledge base.

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 customer support team deflect low-value work and keep experienced human 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 massive hidden cost. High turnover means expensive recruiting and retraining cycles. In 2026, replacing a single contact center agent costs an average of 31,416. Investing in better tools pays for itself by reducing the frustration that leads to burnout.

When agents are supported by a unified platform, they spend less time on repetitive data entry and more time on high-quality service, which directly improves both agent and customer 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

Send a bill reminder with relevant explanations before the payment is due. This is crucial because undisclosed or confusing bills are a primary driver of urgent support tickets. Sharing bill reminders with related context keeps customers informed and allows them to discuss concerns proactively rather than clogging the support queue once a payment has already been processed.

Below are a few examples of proactive customer service. 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 customer support 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.

How to Cut Customer Support Costs (Without Cutting Corners)

Here’s how to reduce customer service costs.

The hidden cost crisis in customer support

Customer support costs keep climbing, but the real problem goes beyond the obvious of rising expenses. It’s about invisible waste. Most businesses focus on obvious costs like salaries and software licenses, but miss the operational friction that burns money on busywork.

The hidden culprits? Agents jumping between multiple systems, customers repeating information across channels, and teams duplicating work because data lives in silos. These inefficiencies compound quickly, turning every support interaction into a more expensive operation than it needs to be.

The solution isn’t cutting staff or limiting channels, but instead eliminating the operational friction that makes everything cost more.

The four-pillar cost reduction framework

1. Strategic deflection (not basic self-service)

Basic FAQs are no longer the standard. High-performing customer support teams use contextual help widgets and proactive chat triggers that appear exactly when a customer shows signs of confusion. The goal is a dynamic knowledge base that learns from every successful resolution, ensuring customers can solve problems on their own timeline without ever needing to open a ticket.

2. Eliminate ghost work through automation

Ghost work is the invisible administrative labor between customer touchpoints — like manually copying data or scheduling follow-ups. By 2026, the target is zero-entry support. Automation should handle ticket routing based on customer history and synchronize data across all touchpoints instantly, allowing agents to focus on meaningful customer interactions.

3. Data unification (the 86% problem)

Siloed data is the primary driver of high AHT. When 86% of CX leaders report fragmented data, the cost of every interaction compounds. A unified platform eliminates the context gaps that force customers to repeat themselves, making training faster and resolution immediate.

4. Intelligent capacity management

Traditional scaling assumes you need more agents for more volume. Modern capacity management uses AI-first triage to route simple issues to automation, while matching complex, high-emotion cases to your most experienced agents. This hybrid workflow allows you to handle more volume without a proportional increase in headcount.

Why unified platforms are cost multipliers

The real value of unified platforms isn’t just consolidating tools but multiplying agent effectiveness as well. When everything lives in one place, the benefits compound.

Immediate operational improvements:

• Agents stop wasting time switching between systems
• New team members onboard faster with one platform to learn
• Customer context follows across all support channels automatically
• Automation handles routine tasks while humans focus on complex issues

Long-term cost advantages:

• Lower agent turnover when systems actually help instead of hindering
• Scalable operations that grow efficiently
• Predictable costs with fewer vendor relationships to manage

💡 94% of CX leaders report ROI from CX investments – unified platforms make that ROI both measurable and sustainable.

The Nextiva advantage: all-in-one cost optimization

Nextiva’s unified customer experience platform addresses every cost factor simultaneously:

• Operational efficiency: Voice, SMS, email, chat, and CRM in one interface eliminates system-switching waste
• Intelligent automation: AI handles routine tasks, smart routing, and repetitive workflows
• Data continuity: Complete customer context across all channels prevents duplicate work
• Scalable infrastructure: Cloud-based platform handles growth without linear cost increases
• Measurable impact: Built-in analytics show exactly where efficiency gains come from

The result? Businesses can handle more volume with existing teams while improving the customer experience.

Beyond cost cutting: cost transformation

The most successful support cost strategies don’t just reduce expenses. They transform how costs scale. Instead of paying proportionally more for every additional customer or channel, you build systems that handle growth efficiently.

Smart cost reduction creates a positive cycle: better tools reduce agent frustration, which improves customer interactions, which reduces costly escalations and repeat contacts. It’s about building support operations that get more efficient over time, not just cheaper in the short term.

That’s the difference between cost cutting and cost optimization. One weakens your operation, and the other strengthens it while controlling expenses.

Build a Winning Customer Service Function With Nextiva

To reduce customer service costs, that doesn’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.

Nextiva’s unified platform addresses every cost factor simultaneously by eliminating the toggling tax and providing data continuity. When voice, SMS, and CRM live in one interface, you aren’t just cutting costs — you’re changing your cost structure. CX leaders report a sustainable ROI from these types of unified investments because they make growth efficient rather than expensive.

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