Understanding And Reducing Cost Per Contact
Cost per Contact (CPC) is a critical metric for the customer service industry, as it directly impacts the cost and efficiency of providing customer service. In today’s business environment, customers expect immediate and effective support, and companies must find ways to meet these demands while also controlling costs and optimizing resources. By reducing CPC, companies can provide top-notch customer services at a lower cost, ultimately improving customer satisfaction, loyalty, competitiveness, and overall business success. Let’s explore the importance of CPC in customer service and provide strategies for companies to lower their CPC and improve their customer service operations effectively.
How To Calculate Cost Per Contact And Examples
CPC measures the amount of money a company spends for every connection or interaction with a customer. The customer-to-business exchange in this context could be an in-person meeting, phone call, video meeting, email, or a chat conversation with a customer service representative. It is calculated by dividing the total cost of the customer service department by the number of customer contacts received. The formula is:
Cost Per Contact = Total Cost of Customer Service Department / Number of Customer Contacts
For example, let’s say a company has a customer service department with a yearly budget of $500,000 and receives 100,000 customer contacts in a year. The cost per contact would is calculated as follows:
Cost Per Contact = $500,000 / 100,000 = $5
This means that, on average, it costs the company $5 each time they assist a customer through their customer service channels.
For all companies, CPC is a crucial factor in assessing the efficiency and effectiveness of their customer service operations. Lowering its CPC indicates that a company can provide customer service at a lower cost, which can significantly impact its overall success.
Another way to calculate CPC is by individual customer service representatives. Divide the total cost of the representative’s salary and benefits by the number of customer contacts they receive.
Cost Per Contact = Total Cost of Customer Service Representative / Number of Customer Contacts by Representative
For example, a customer service representative has a yearly salary of $40,000, including benefits, and receives 10,000 customer contacts in a year. The cost per contact for that agent would be calculated as follows:
Cost Per Contact = $40,000 / 10,000 = $4
This means that, on average, it costs the company $4 each time this individual customer service representative assists a customer.
Top 9 Reasons Why CPC Matters In Customer Service
Here are 9 reasons why reducing CPC is essential for companies in the customer service industry.
- Improve customer satisfaction and loyalty by providing high-quality service at a lower cost.
- Enhance a company’s competitiveness by making connecting with customers in a crowded market easier.
- Increase the overall efficiency of a company’s customer service operations by reducing the cost of service.
- Lower customer service costs to free up resources for other business areas.
- Streamline processes to reduce the time it takes to resolve issues and provide more efficient customer service.
- Increase customer satisfaction, loyalty, and positive word-of-mouth recommendations.
- Help companies make informed decisions about improving customer service operations.
- Allocate resources more effectively, ensure customer service teams are staffed appropriately, technology is up-to-date, and processes are optimized.
- Improved employee morale by providing employees with the resources and support they need to serve customers effectively, improve employee morale, and reduce turnover.
– Customer Retention Strategies For Practical Profitability
– 6 Ways To Upgrade Your Customer Experience Strategy
– Top 10 Tips To Improving Your Customer Service Training
4 Strategies For Lowering CPC
There are a variety of strategies that companies can use to lower their CPC in customer service. These include:
- Investing In Technology: Utilizing technology such as chatbots, AI-powered virtual assistants, and customer service software can help to streamline and automate customer service processes, ultimately reducing the cost of providing service.
- Training And Empowering Employees: Providing employees with the necessary training and tools to handle customer inquiries effectively can reduce the time and cost associated with each interaction.
- Encouraging Self-service: Offering customers the option to resolve issues or answer questions on their own through online resources, such as FAQs, video tutorials, and how-to guides, can reduce the need for direct interaction with a customer service representative.
- Viewabo can help increase customer service representatives’ understanding of customer problems faster and better. When customers have to contact the business multiple times or spend a long time explaining their issues with customer services, it increases the overall CPC.
Viewabo is a great tool to allow both customers and representatives to skip verbally explaining things and help go directly to visually identifying the real issues. By enabling live video feeds, Viewable users have found a significant drop in misunderstandings and faster time to resolutions. Contact us to learn more about how we can help.
– Four must-have remote customer support tools
– Top 10 Tips To Improving Your Customer Service Training
– Why Text-Only Communication Fails?
5 Steps To Reduce Cost Per Contact
Reducing CPC starts with analyzing the current state of your customer service operations. This involves gathering data on the current cost of customer service, the channels, methods, and the volume of customer interactions. With this information, you can start identifying areas where improvements can be made.
Here are the steps to get started on reducing CPC:
- Gather Data: Collect data on the cost of customer service, including personnel, technology, and other expenses related to providing support. Also, gather data on the volume of customer interactions and the channels used, such as meetings, phone, email, chat, or self-service options.
- Identify Areas For Improvement: Analyze the data to identify areas where costs can be reduced, and efficiency can be improved. For example, are there channels or methods that are more expensive than others? Are there areas where customers frequently require multiple contacts to resolve an issue? Can solutions like Viewabo help reduce misunderstandings or increase effectiveness?
- Benchmark Against Industry Standards: Research the average CPC for your industry to see how your company compares. This will give you a sense of where you stand and help you set achievable goals for reducing CPC.
- Implement Process Improvements: Based on the findings from your analysis, implement process improvements to reduce CPC. This could include streamlining processes, automating tasks, providing employees additional training, or offering customers more self-service options.
- Continuously Monitor And Improve: Regularly monitor and evaluate the success of your efforts to reduce CPC. Schedule time to analyze and make changes as necessary to continuously lower CPC and improve customer service operations.
Start Saving Today
Managing CPC in customer service is crucial for companies looking to provide high-quality services at a lower cost or just trying to optimize their resources. By reducing CPC, companies can improve customer satisfaction and loyalty, enhance their competitiveness in the market, and increase the efficiency of their customer service operations. Utilizing technology like Viewabo, training employees, encouraging self-service, and continuously improving processes are only a few of the ways companies can successfully lower their CPC and provide outstanding customer service. Start today!