Cost Optimization: How to Do More with Less

6 minute read, posted on 08/08/2023, by VXI Marketing

Banner - Cost optimization strategies for doing more with less.

“Do more with less” is often an unspoken (or overly spoken) directive from business leaders. And in the contact center world, it has become increasingly relevant as companies strive to deliver exceptional customer experiences (CX) while optimizing their existing resources.

But are contact centers truly optimizing their costs, or simply striving to reduce them?

You know what cost reduction looks like: caps on Average Handle Time (AHT) caps and quicker After-Call Work (ACW) are common tactics to reduce costs. And while lower AHT and less ACW are worthy target KPIs, they are far from the most effective ways of improving the customer (and employee) experience.

That’s where cost optimization comes into play. When contact center leaders cut back on continuous improvement initiatives, neglect channels in favor of more cost-effective ones, and focus on reducing the cost of customer fallout instead of preventing it in the first place, short-term savings can have long-term consequences. So, if you’re looking to improve the bottom line without sacrificing the services your customers rely upon, you need to truly start doing more with less.

Cost Optimization vs. Cost Reduction

Before diving into the “how,” we must distinguish cost optimization and cost reduction. Whereas reduction focuses solely on cutting expenses, optimization takes a more holistic approach — it involves assessing costs and spending, identifying areas that can be streamlined or eliminated, and reallocating those savings to fuel further growth. As companies trim their excesses, it’s important to focus on optimizing costs and not just cutting them.

Optimize Your Costs While Unlocking Customer Value

When you strike a balance between trimming costs and driving organizational growth, you can transform cost-saving measures into opportunities for unlocking customer value. Begin by understanding customer lifetime value (CLV) in your contact center. Some segmentations of your customer base will likely drive more value over time than others. By analyzing their pain points and behaviors, you can begin optimizing the areas of your business that will keep them around for longer. Of course, the results of this may push back against traditional contact center metrics. But if less stringent AHT caps lead to higher customer value, isn’t the newly optimized expense worth it in the end?

Of course, your customers are unique, and the value they drive will vary. But there are tried-and-true ways to unlock CLV, stay competitive, enhance customer satisfaction, foster long-term relationships, drive sustainable growth, and maintain a positive brand reputation. And don’t worry – they’ll also help your business streamline operations, reduce wasteful expenditures, and improve your overall efficiency. Here are four important tips on how to do more with less.

#1: To Optimize Costs, Know Your Customer

Only through a better understanding of what customers really want, need, and value, can brands strike the right balance between experience and efficiency.

As a starting point, take a critical look at your top contact drivers – what percentage of your calls, chats, or text-based communications warrant live support? How many of these contact types are low-value touchpoints that can be automated or addressed earlier on in the customer journey, mitigating the need for customer support in the first place?

For example, we found that over 80% of fallout for one of our brand partners in the technology industry was due to billing, subscription, and refund-related issues. Many customers were calling in confused about their subscription charges and the billing descriptors used on their credit card statements – in other words, issues that could be resolved earlier in the customer’s journey or through self-help. Our team calculated that by leading with self-service and reconfiguring digital workflows, allowing customers to access self-help tools without logging in, the client could reduce 50% of its customer fallout.

Once you understand what’s driving the majority of your customer interactions, you can reevaluate the tech stack, the channels you’ve implemented, and whether your KPIs truly paint the full picture. Then, you can identify both areas for improvement within the customer journey alongside opportunities to lower costs.

#2: Improve Processes & Cultivate Centers of Excellence (COEs)

By adopting a standardized and efficient approach to handling customer interactions, contact centers can reduce errors, enhance overall proficiency, and optimize costs in the process.

Most brands have more than one contact center and leverage multiple outsourced partnerships. Starting with a centralized governance model to make sure knowledge is being disseminated accurately and consistently is key and can increase productivity, lower handle time in a meaningful way, and prevent unnecessary callbacks.

Info card highlighting a cost-savings tip: 'Surface the right answers faster with knowledge management.

Beyond ensuring process excellence, establishing Centers of Excellence (COEs) can significantly contribute to cost optimization by serving as centralized knowledge hubs, which foster collaboration, serve as a platform to share best practices, and provide ongoing training and development. This not only improves employee performance but also empowers agents to deliver exceptional customer experiences, ultimately driving customer satisfaction and loyalty.

#3 Optimize Digital Channels

Digital enablement can significantly contribute to cost optimization by automating processes, enabling omnichannel support, and supporting continuous improvement. AI-powered chatbots and interactive FAQs can empower customers to find answers to their queries independently, reducing the volume of incoming contacts.

Info card titled 'Are You Right Channeling the Right Way?' featuring a VXI channel guidance case study.

#4: Automate Contact Center Operations

 Finally, one of the most effective ways of optimizing costs is by automating certain operations. By leveraging Quality Assurance (QA) automation, process automation, and digital workforce solutions, contact centers can automate repetitive and time-consuming tasks, giving more time back to your agents to deliver world-class customer experiences.

Info card presenting VXI's QA Automation Tool, IQAA™, for streamlined quality assurance processes.

Achieving cost optimization is essential for driving growth while delivering exceptional customer experiences for your business. Your company’s overall CX strategy can be enhanced by reallocating resources to customer service initiatives, such as hiring, training, and upskilling agents, implementing advanced technology solutions, and improving service channels — this leads to shorter wait times, quicker issue resolution, and a more seamless and satisfying customer journey. By adopting these approaches, contact centers can successfully navigate the path of cost optimization while maximizing customer value.

Legendary starts here. Ask us anything.

Real people.

Real experiences.

Real emotion.

Your customers' lives are busy, we’re here to make them easier.