7 Tips to Reduce Customer Service Costs Without Hurting Your Service Quality

Last Updated: April 6, 2021

Customer service is more than a cost center. As competition and customer expectations compound, customer service turns out to be the key differentiator to propel business growth. Providing the best customer experience does not mean splurging on it. In the long run, the lack of cost-effectiveness can hurt your business growth.

Reducing costs does not mean reducing quality either. It is the sweet spot where you are able to provide a better experience not by cutting down on resources but by driving more efficiency into the existing resources. 

So, how to reduce customer service costs without hurting the quality of service? Let’s take a look.

7 Tips to Reduce Customer Service Costs

  1. Integrate Support Efforts With Omnichannel Strategy
  2. Reduce Support Volume With Chatbots
  3. Reduce Operational Costs With Helpdesk Automation
  4. Simplify Support Team Effort With Self-service
  5. Improve First Contact Resolution With Agent Training
  6. Track Essential KPIs and Seal Cost Gaps With Business Intelligence Software
  7. Organize Ticketing System With an Effective Help Desk software

1. Integrate Support Efforts With Omnichannel Strategy

Besides allowing for fast responses, using social media channels for support can bring down your customer service costs by 30%. Customers today expect a company to provide multiple channels for engagement. They switch between devices during communications, place service requests in whichever channel they find suitable, and reach out to you whenever they are free. Setting multiple channels has become simpler and cost-effective due to the advent of social media in the consumer industry. The challenge, however, lies in integrating the communication across various channels to provide a unified experience. 

Omnichannel Strategy to Integrate Support Efforts

Omnichannel support strategy is the solution you’re looking for. Omnichannel software helps you provide contextual customer support on all touchpoints by integrating the communication made across various channels. Omnichannel support increases efficiency, flexibility, speed of resolution, and as a result, reduces the overall customer service costs. 

2. Reduce Support Volume With Chatbots

Chatbots to Reduce Support Volume

Customer service agents are the cogs that ensure the smooth functioning of a support function. Any day, human agents are the ones well-versed with the dynamics of your customer relationship. Direct labor cost is thus the major cost component of customer service. Luckily, there are ways to save labor costs without reducing agent headcount or resorting to smaller budgets. With a combination of inside talent and cutting edge automation, you can build a powerful service solution that is also cost-effective.

Far from a fad, 85% of customer service interactions is estimated to be automated by 2021.

Chatbot is one such AI-powered automation solution that answers customer questions with pre-written responses. They can handle frequently asked questions that are imposed directly and deflected by ticket-routing, thereby leaving agents with a relatively low support volume. No more hiring to pitch in for that frequent ticket backlog.  Automation of this sort can make a huge cost difference particularly when you regularly receive a huge volume of service requests and subsequent backlogs. Chatbots are a win-win for both customers and businesses, as they enable instant, real-time, 24/7 support without the need to recruit support agents for late shifts. 

3. Reduce Operational Costs With Helpdesk Automation

Helpdesk Automation to Reduce Operational Costs

Helpdesk Automation lets you automate repetitive tasks and multi-step processes to enhance productivity across customer service. Process automation helps reduce cost by optimizing the existing resources for better operation. Once installed and configured for business use cases, Workflow Software can reduce processes as redundant as ticketing and data entry to a matter of minutes.

While Chatbots handle simple requests and Workflows handle simple tasks, agents will only have to focus on fewer complex tasks that indeed require human expertise. Agent productivity has a direct correlation with cost reduction — Mckinsey found that using technology in customer service can reduce operational costs by up to 40% besides boosting customer satisfaction and customer retention rates.

4. Simplify Support Team Effort With Self-service

We are at a tipping point in customer service where customers prefer guidance to indulgence. When customers face an issue, they no longer want to pick up the phone and wait for answers. Customers want companies to provide a self-service knowledge base with the option to access human support if needed. A knowledge base is a collection of information about your products or services. It typically consists of FAQ articles, how-to guides, discussion forums, and a help center.

Self-service to Simplify Support Team Effort

Creating a knowledge base for self-service is a real money (and time) saver for obvious reasons. It avoids monotonous, time-consuming service requests from arising in the first place. By reducing the overall inbound call and ticket volume, self-service options can make a huge difference in your service costs. 

5. Improve First Contact Resolution With Agent Training

Improving First Contact Resolution Agent Training

In the past 5 years, the average cost per call has gone up to $4 or even $6 to $11 for technical support. Early startups rely on outsourcing to compensate for the lack of a structured customer service department while also saving some money. When they grow, so does the need for an internal team. Unlike others, call support has no alternatives. When customers encounter a complex issue that Chatbots and Self-service can’t solve, they are going to call a customer service representative. Pushing for less on-call time or fewer responses per interaction won’t work either, as hurrying customers towards closure will reflect poorly on your service. As per the contact center industry, it takes 1.4 calls per query to arrive at a resolution. If a customer gets a resolution on the first call, you won’t get a call regarding the same issue again. And naturally, a low repeat volume means lower costs. 

To be able to provide First Contact Resolution, you need agents who know the ins and outs of your product. To set your customer service team for success, provide them a fundamental knowledge of your product along with regular in-depth training sessions. As discussed earlier, enhancing agent efficiency is the way to reduce support costs while maintaining the same support standards.  

6.Track Essential KPIs and Seal Cost Gaps With Business Intelligence Software

Customer service cost is too crucial a metric to leave up to chance and hope it works. Analytics is the key to make any scalable improvements in your customer experience as well as cost optimizations. It is only when you understand your business and calculate customer service costs regularly, you will know what investment will pay off and what won’t. Business Intelligence Software will help you gain visibility into your expense pipeline, thus fuelling data-driven decisions and realistic financial goals. Proactive tracking of metrics like customer feedback is the key to happy customers as well as a cost-effective strategy.

7. Organize Ticketing System With an Effective Help Desk software

Help Desk software to Organize Ticketing System

An effective ticketing system will ensure your customer service operations are friction-free by being organized and fail-safe. Anytime when a customer interaction goes wrong, when internal communication fails, or when the processes are innately inefficient, you lose money. Invest in a robust Help Desk software aimed at bringing order and efficiency in your day-to-day operations. Now, that is a surefire cost-saving strategy you can rely on.


Companies started placing a high emphasis on customer service when they realized the potential of retention over acquisition. The core purpose of customer service is not just to delight customers. The right cost strategy can reduce your customer service costs and even contribute to your bottom line by making your operations smarter. Sign up for a HappyFox Demo to learn how to provide good customer service at competitive pricing.