5 simple but powerful ways to reduce customer contact costs



5 simple but powerful ways to reduce customer contact costs


If you want to reduce costs and save money, you must invest more in the customer journey.

Search online for just a few minutes and you’ll find loads of articles and blogs about how automation and new technologies can help you serve your customers’ needs more efficiently. It’s true that technology can help, but only if deployed in a strategic, holistic way. And only if a business thoroughly understands its customers’ needs first.

Even if you want to save money and reduce costs, you still have to have good customer journeys. In fact, a good customer journey is even more important, because if you don’t have that, you won’t achieve the cost savings at all.

In that scenario, spending on new customer contact technologies becomes a false economy because your customers won’t self-serve, your call volumes and total minutes will go up, and you’ll end up spending more on customer contact, not less. Believe me, I’ve seen this happen over and over again for more than a decade.

If you really want to reduce your customer contact costs in a significant and sustainable way, you need to focus on your customer journey. Here are five key ways to do that which in our experience will help most organisations reduce their contact costs within a surprisingly short time.

1. Understand that you cannot reduce contact costs unless you also improve customer service

This means reducing customer effort – in other words, making it as easy as possible for your customers to achieve what they want to. Focus on getting this aspect of your customer journeys right by reducing friction, eliminating potential sticking points, and getting your self-serve easy and low effort. Once you have this, the rest will follow.

Too often, organisations start from the point of view of:

  • Saving themselves time and money without thinking about customers’ needs at all
  • Assuming that offering customers self-serve options will result in adoption, without designing a customer journey that works
  • Assuming that by making it difficult to contact a call centre, customers will be forced to self-serve
  • Believing that offering customers a multi-channel experience is what they want, without actually researching why they contact the business in the first place or what specific challenges they want to solve by doing so

This always ends in higher contact costs. The more companies try to save money as a priority, the more it ends up costing them in the long run.

2. Realise that however much you spend on moving away from live support, some of your customers will always want – or need – to call you to resolve an issue

With live calls costing an average of £4.27 per call in the UK, it’s natural that many companies looking to reduce their cost of contact will start by seeing how they can reduce the cost of live calls by moving customers towards self-serve via digital channels.

But the lesson here is simple. However much you spend on moving away from live channels, some customers will always prefer to speak to a live agent and others will have no other choice. Others simply do not believe a chatbot or FAQs page on a website will be able to give them the information they need. At the same time, there are people with accessibility challenges who won’t be able to use your website or app at all, for a variety of reasons they can’t do anything about.  

On top of all that, from my 12-plus years in this industry, I know that the more you try to put barriers in the way of your customers, the less likely they are to acknowledge them. In other words, the minute they sense you’re trying to stop them from calling you, they’ll do everything they can to find a contact phone number and call you. And this time the call will take even longer because they are irritated. (More on this point below.)

3. Don’t just focus on average call handling times – look at total minutes to get the full picture

If you get your digital channels right, those customers who are able and willing to self-serve without using live support will do so. As a result, your total calls will go down.

The problem comes in the counterintuitive fact that the more successful you are in moving people into self-serve digital channels, the more your average call handling time goes up. That’s because you’re left having to deal with the more complex urgent or emotional calls that need to be taken by live agents.

By their very nature, these kinds of calls will be longer and your average handling times will increase significantly. This is a positive sign that you’re moving in the right direction. Keep an eye on your total minutes, and you will see those reduce – along with your overall cost of service.

4. Understand your customers’ CX needs from your customers’ point of view

Too many organisations make changes to their customer service journeys without first taking time to properly understand their customers’ motivations or reasons for contacting you. This almost always leads to failure.

Before making any changes, you first need to gauge what your customers’ needs actually are, and what their preferences are when it comes to contacting you. This means conducting some kind of survey, assessment, or audit from your customers’ perspective. Without that, you’ll never really understand what makes them tick, and this massively increases the chance of you making the wrong decision with your contact channels.

Let me give you a real-world example. One client – a large consumer business in the UK – came to us to assess the effectiveness of their chatbot. Chatbots can be a brilliant customer self-serve tool, but only when used well.

In this case, since deploying the bot, the company’s customer contact costs had increased. They didn’t know why this was, so they turned to us for help. We audited how the chatbot was working and discovered that more than 1 in 5 of the 16,000+ recorded interactions lasted under a minute – not enough time for most queries to be resolved successfully. We also discovered that over 40% of users asked to speak to a live agent during their chatbot journey.

When surveying the client’s customers, we found that the chatbot was set up to answer queries that customers didn’t have. We also found that for situations where survey respondents said they would be happy to use a chatbot, this particular bot was not set up to deal with those queries.

In other words, there was a complete mismatch between functionality and customer need. All because the company had deployed this piece of technology without first assessing their customers’ needs and then checking to see whether the technology would solve those needs. The result was not only a waste of money, but also a rise in overall contact costs.

A customer audit – when carried out well – will massively reduce the chances of making this kind of mistake.

5. Create customer journeys that engage customers – only then can you positively influence their behaviour for your mutual benefit

Once you have carried out your customer audit or survey, you need to design and build customer self-serve journeys that engage your customers. Here’s another quick example. A few years ago, I worked on a project for a financial services company. Their voice recognition software was not working to deal with people’s queries, and instead customers kept asking to be put through to a live agent.

They were bypassing the company’s intended journey because that journey had failed to engage them. Without that engagement, the company could not influence those customers to behave in the ways it wanted them to.

We changed the tone of voice, the wording, and some of the structure of the voice recognition software. Now it asked callers to tell them what they wanted to do on the call. Say the person responded with a request to change the date of a direct debit. The next phrase was: No problem, I can take care of that for you now.

This was all automated, but it was:

  1. Designed to answer queries customers were most likely to have
  2. To answer those queries in a friendly and engaging tone

This gave the caller confidence, who then went on and self-served using the automated service instead of bypassing it to go to a live agent. Cost for a self-serve call: approximately 20p rather than £4.27 for an agent answered call. A huge difference by paying attention to the small details at the start of the journey that customers appreciate.

It’s helpful to look at customer journeys in terms of the emotions within the customer. The more you can stimulate positive emotions:

  • Calm
  • Relaxed
  • Engaged

The more you can engage customers and influence them through a self-serve customer journey.

By contrast, a badly-designed customer journey will generate negative emotions, for example:

  • Frustration
  • Stress
  • Irritability
  • The feeling of being under time pressure

The result? You create the customer behaviours you don’t want, and which lead to higher contact costs: abandoning chats, refusing to go online for basic information, calling contact centres for basic information, and taking much longer to resolve queries once on a call.

Another chatbot client experienced this. Because the client had a very loyal customer base and high customer lifetime value, they were shocked at the negative feedback they received once they had deployed a chatbot. The comments from customers were vicious and indicated a real lack of alignment between the chatbot and what customers expected from the brand. Here are a few example comments from the survey we conducted:

  • “My query was ignored. I felt that the use of a chatbot is indicative of the company’s lack of interest in its customers.”
  • “I would rather speak to a human over a chatbot.”
  • “A person can find out more information regarding specific queries and come back to discuss.”

Understanding your customer needs leads to designing journeys that engage them emotionally, so you can influence them to self-serve when appropriate, and to easily get through to a live agent where appropriate. The result of this is a reduction in contact costs, often in under six months.

Change your mindset

When it comes to reducing your customer contact costs, don’t look at it through a technology lens. Look at this through a customer lens first, and then look at what technology will serve those customer needs.

In the chatbot examples above, companies had deployed bots as a cost-saving measure as a directive from head office, with no regard at all for customer needs. The focus was 100% an internal operational focus: technology first, people second.

It’s common for customer service professionals today to go to market thinking they need some new piece of tech to save them money or improve their efficiency. They’ve come down with a nasty case of FOMO (Fear Of Missing Out) on the latest innovations. But, as we’ve seen, this approach most often leads to failure.

If you feel this way, resist the temptation to act. Instead, you should stay calm, focus on the fundamentals, and be clear about what it is that you need to give your customers and how you could do that better. Focus on that and find the right technologies to help you do it. That will make you more efficient and more productive. That’s how you save money.

In short, looking at this problem from the starting point of cost reduction is counterproductive. You have to look at it from the customer end. Only then, by improving and refining your customer journeys, will that lead to more self-serve behaviour and the kinds of efficiencies that lead to significant cost reductions.

Building a business case for a new paradigm

If you’re a contact centre operations manager and you go to Finance and say, “I know we’ve got a cost reduction target here, but I need to spend some money on our customer journeys,” they will likely have a hard time accepting your argument.

That is a natural reaction because the way to success in reducing customer contact costs is counterintuitive. However, we’ve done this dozens of times for clients large and small, and in multiple sectors.

Read our case study on how we helped a home insurance claims department cut its cost of contact dramatically.

You can check out our business benefits calculator, to help you work out your potential savings from improving your customer journeys.

Most of all though, if you need help, get in touch. We’ve got the evidence and the numbers to show a clear return on investment on every major CX improvement. We can help you put together a business case that reflects your industry and your challenges and show how you could expect a positive ROI typically with 6-9 months.

Drop us a line to talk through your CX challenges


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