Three outstanding ways to cut costs in customer service
Three distinct areas can become part of a strategy that achieves cost-cutting in customer service: data, time and resources, says CEO of Inovo, Wynand Smit.
In business, product pricing and service delivery go hand-in-hand when it comes to driving down costs and increasing profitability, but the question remains, how to cut costs without compromising on service? Wynand Smit, CEO of Inovo, is convinced that three distinct areas can become part of a strategy that achieves those goals: data, time and resources.
"A business analyst will look to the various business units and gain insights about which processes are cost-heavy, a great business analyst will take a company-wide approach to ensure that reducing costs in one silo doesn't negatively impact the other, and that efficiencies are leveraged across departments," says Smit.
Data and voice costs
People remain the biggest cost factor in the contact centre environment, so reducing the time spent on calls (without compromising on service quality), or the amount of after call work for example, will all boost profitability.
Likewise, a multi-channel customer service centre has different weightings to each channel relating to how much those are used and how labour-intensive each is to manage. When it comes to examining customer communication channels, SMSes (for example) are fading in popularity owing to the costs it takes to communicate vs. the cost of data it may take to interact over other channels (such as chat).
Another important consideration is efficiency: one contact channel may be more cost-effective and convenient, but is it the best channel to use to effectively resolve queries according to the service levels required, and to the customer's satisfaction?
Closer examination of each channel, in terms of the staffing requirements to manage it, it's effectiveness in resolving queries, and the operational costs involved in interacting, can provide the big picture view needed to streamline your customer communication strategy. This will ultimately help your business identify ways to integrate channels, as well as optimise supporting systems and processes to enhance CX and reduce costs.
Using customer data effectively
Businesses store a wealth of customer profile and interaction data, yet few of them use this to optimise their processes and enhance the customer experience. If, for example, a credit card customer phones a financial institution, the customer can be automatically identified by their phone number and directly routed to the credit card department.
Instead of navigating lengthy (and often irrelevant) menus for other products or services, the customer will be serviced quicker, with less frustration and potential aggravation. This also means fewer customers will be waiting on hold to be routed to the right department, and a more efficient use of an agent's time. Often additional processes result in extra costs, and a more tedious experience for the customer.
The ticking of the clock
"Why have your best agents tied up on simple tasks when self-service options or a chatbot could be more efficient and cost-effective for your business and the customer? Carefully aligning business and customer needs can easily be a win-win for both parties," Smit comments.
In addition to using self-service channels or chatbots, the automation of certain administrative or manual processes such as reporting, updating of spreadsheets and more can free up agents for more complex tasks. Furthermore, automated processes such as running day-end updates can be performed out of office hours and without the direct involvement of personnel, resulting in a significant cost saving.
Resources: a deal-breaker
Capex and Opex are two major factors to consider in contact centres: high Capital expenditure on hardware could be prevented by shifting to a cloud or hybrid contact centre to offset those costs. Capex items are recorded on the cash flow statement under "investments", tying up the company's liquidity. As technology is always in flux, a large upfront investment is not always the best choice, depending on business requirements.
Shifting to an Opex (operational expenses) model incurs a regular, reduced fee for a fixed contract period. The fee may include hardware and infrastructure, software, and additional services (such as support). This is often a much more affordable and flexible option as software licences, for example, can be increased or decreased depending on seasonality, changing requirements or peaks in demand: this is crucial for reducing costs in contact centres.
"Cost-cutting in the contact centre should be done with the long-term view in mind to ensure that processes are optimised and that customers will continue to benefit while the company delivers on service level expectations. A more seamless customer interaction doesn't just improve service, but it more often than not contributes to your bottom line," Smit concludes.