This Is How Outsourcing Can Help You Reduce Call Center Costs and Free Up Valuable Resources

Today, staying competitive in business requires also considering the costs of operations. Most companies using the services of call centers are becoming increasingly aware of the expenditures associated with it. Therefore, brands look for strategies to reduce call center costs. While solutions vary depending on objectives and resources, outsourcing a call center can allow a business to free up some of its resources to maximize its capabilities. 

Calculating the Costs of Calls in Contact Centers

Although many calculations associated with cost savings vary, evaluating how much your calls might cost you is pretty straightforward. A common formula to do so is dividing your operational and capital costs by the number of successful calls within a certain period. 

Here’s the visualization of assessing call costs: 

Total OpEx and CapEx costs ÷ (calls taken – calls abandoned) = cost per call

An average cost per call varies from country to country and can differ significantly across industries. However, most recent researches offer a figure between $3 and $7. When analyzing your own expenditures, also include whether your business is new: at the beginning, operational and organizational costs can be extremely high. 

Why Call Centers Cut Costs

How can call centers reduce call center costs? These are the most common reasons that brands opt for such a strategy: 

Labor cost reduction. One of the key factors allowing for cutting costs is lowering labor expenses. Working with centers with professionals worldwide allows for a more flexible payment system compared to states with higher costs of living and considerably higher wages. Outsourcing call centers allow companies to pay less for services that remain on the same level. The pay decrease with outsourcing can be between 30% and 70%. Similarly, they connect clients with consultants who understand their concerns due to approximately similar residency. Another dimension of this factor is the lack of indirect labor costs that exist whenever a call center has full-time workers, including healthcare expenses, retirement money, or payroll taxes. 

Shift from fixed to variable costs. A brilliant way to reduce call center costs emerges when a company doesn’t need to offer high upfront investments in infrastructure and technology. Such costs are typically a part of the in-house call centers, and this choice isn’t always reasonable. The volume of the processes does not affect the costs, and oftentimes it leads to overspending. Unlike this approach, outsourcing a call center allows for paying for services without the extras. During the higher season, a business can increase its operations and increase the number of consultants processing their orders, while lower seasons won’t be painful with scaling down. This flexible system cuts costs significantly without compromising the business needs. 

Fall in overhead and capital expenditures. A range of overhead costs, such as rent for the physical space, utilities, office supplies, and maintenance of the facility, are often the cause of additional spending. Regular upgrades, including better technology and hardware or software updates, are also noticeably expensive. By outsourcing the call center, a company successfully transfers such costs to the outsourcing vendor, which is more capable of handling such costs as a part of its key activities. It frees a part of the finances for the business to invest in more prioritized objectives. 

Specialized skills and technology. With a focus on outsourcing, companies acquire skills from specialized vendors that have already well-trained and experienced consultants. This expertise reaches beyond what is possible for a company that doesn’t specialize in call centers and customer services. Training consultants in-house and regularly updating their capacities would lead to significant costs dedicated to labor growth and improvement. While still valuable, this approach makes it more overwhelming for a business trying to reduce its spending. Vendors can provide first-rate services with the best professionals, giving a business a chance to target its priority processes. Most often, vendors utilize advanced technologies based on their needs, including AI-driven call routing or data analytics tools. 

Streamlined operations. Better performance always drives a price fall. Underachieving teams might cause a business to lose its financial stability due to a need for compensation, searching for new marketing channels, or addressing clients’ complaints. As the information shows, outsourcing increases customer satisfaction by 20%-30%. Fortunately, outsourcing vendors are often better equipped to manage high call volumes, reducing wait times and increasing first-call resolution rates. With an increase in efficiency, vendors also decrease your spending as a result. The cross-industry experience of a reliable outsourcing vendor may also leverage the tools and techniques they already possess, bringing a competitive advantage to the company it supports. 

Aiming at core business activities. Spending too much time on non-core activities is costly and may inadvertently take the resources from the crucial aspects of business operations. Instead, the resources that your business spent on call centers before can now be concentrated on the tasks and activities necessary for business survival and growth. 

Risk mitigation and security. Paying for challenges associated with legal ramifications and security failures can be overwhelming. Due to the peculiarities of managing a call center, businesses not specializing in this can risk legal consequences and have to pay for their missteps. Outsourcing to a reputable vendor transfers much of this risk to the provider, who is responsible for ensuring compliance with relevant laws and standards.

Additional Tips to Consider to Cut Costs on Call Centers

Aside from outsourcing, here are other actions you can take to decrease your spending on a call center. 

Shift to the Cloud 

Today, cloud solutions are gaining momentum. Unlike the on-premise call centers that require significant upfront costs, a change to a cloud-based center is a benefit for your quality and costs. In particular, you don’t need to spend money on putting upfront costs or paying for a large building and its maintenance. Cloud-based platforms will give you the same capabilities without additional investments. Shifting to the cloud can help you cut up to 40% of costs, according to recent data. Although even small companies will benefit from this move, larger ones can do even more with cloud cost optimization strategies and utilizing professional cloud cost management tools.

Enhance Call Center Forecasting

Both overstaffing and understaffing can get costly because you’re either losing customers or overpaying for the number of consultants. Accurate call center forecasting can be a smart and practical step to balance these two variables. You can choose a suitable forecasting method, from triple exponential smoothing to neural networks, and pick the available amount of historical data. Understanding your forecasting, you can reassess your needs in terms of staff and scheduling needs. When you do so, consider turnover and time off. 

Identity Relevant Metrics

Your strategic objectives and their achievement in many ways depend on the relevant metrics of success and tying your assessment strategies with your business goals. You may have your own metrics to assess your call center efficiency, but these are the most common: 

Average Handle Time (AHT): This metric calculates a consultant’s time on a call. It includes hold time, talk time, and post-call tasks. 

First Call Resolution (FCR): This one helps a call center assess how many calls were resolved on the first attempt without repetitive calls and follow-ups. 

Customer Satisfaction (CSAT): To measure this, you’ll need to see the customers’ satisfaction level after the contact with a consultant. 

Net Promoter Score (NPS): It calculates how likely the clients are to recommend the call center to others. 

Service Level: It analyzes the percentage of calls that were answered within a specific timeframe. 

Hone Your Call Routing Approach 

Improving your call routing strategy can maximize the returns from your investments by improving the processes in general. In particular, such advanced methods as skills-based routing or predictive behavioral routing focus on readjusting algorithms when directing the calls. Some factors that can enable you to do so are the location of the client, history of past experiences and interactions, and agents’ skills. This customer-based routing will help you connect the right person with a proper request. 

Profit From Artificial Intelligence and Automation

Nowadays, the use of AI in business is one of the main trends, and this isn’t surprising: it’s one of the technologies that not only reduce call center cost but also boost operations and quality of services. By 2025, up to 80% of call centers will be using AI technologies. For example, agents may avoid performing repetitive tasks through automation which improves their job satisfaction and decreases costs. 

Auto dialer software performs the task without the need for consultants to dial in the numbers; due to human error, when a person does it, it often leads to human error, delays, and inefficiencies. Auto dialers connect the agents with live answers only, avoiding disconnected or busy lines. 

Aside from that, AI can be used to process information faster without wasting someone’s time on it. Assessing clients’ data or creating flexible self-service contact channels such as chatbots can similarly contribute to efficiency and save costs. Analyze your business capabilities and priorities: there are lots of solutions that can be a good fit for you. 

Main Errors in Outsourcing Call Centers

Despite the highly promising opportunities for outsourcing a call center, certain roadblocks and mistakes can sour the process of cutting costs. 

Poor communication. An inability to set specific KPIs and communication channels may harm the processes and even the profits produced by outsourcing. A lack of transparent communication generates misunderstanding and process disruptions. Even though the outsourcing vendor is responsible for regularly keeping in touch with a business owner, business leaders should prioritize this approach nonetheless. 

Cultural misalignment. Outsourcing your customer support services to a vendor that doesn’t fit your client’s culture may foster a misalignment during communication. This misstep can make your buyers feel misunderstood. Remember that aside from language similarity, understanding the user is vital even more. 

Lack of oversight. When you plan to reduce call center costs by outsourcing, it doesn’t mean an entirely laissez-faire management model. Only you as a business owner can understand what exactly you need, so introducing regular assessments and performance reviews with detailed feedback are crucial to ensure that your vendor and you are on the same page. This would also ensure an alignment of standards and expectations. 

Choosing the wrong vendor. A common error is picking a vendor that isn’t the right fit for you. For instance, if you’ve been driven by the idea “How much does it cost to outsource a call center” and not “How can I find the outsourced call center to meet my needs,” this challenge can arise. A misstep in this process can lead to subpar service and damaged customer relationships. Don’t focus solely on the costs when choosing a company based on the prices because many other factors also come into play. 

Insufficient training. Although every agent is trained by a vendor, business owners also have certain responsibilities that include helping their consultants adapt and learn about the company. Try not to rush an onboarding process even if you’re in a hurry. Businesses should invest the necessary time and resources in training the vendor’s team on their products, services, and customer service protocols. 

Overlooking data security and compliance. When outsourcing operations to call centers, businesses may need to disclose sensitive client data or specific information about their inside operations. If the vendor or even someone from your team mishandles this information, it can cause severe issues with risking customers’ information or non-complying with the legal standards. As we’ve mentioned above, legal repercussions do matter. So if you’re interested in protecting yourself both from financial and moral standpoints, pay attention to how the data is handled and what expectations you set for your vendor. 

How Much Does It Cost to Outsource a Call Center? 

Now that you are aware of the most suitable tactics to decrease your spending, you can be interested in this: How much does it cost to outsource a call center? 

In fact, it can be difficult to evaluate the prices of outsourcing due to such factors as the industry, company size, your demands, and the level of support needed. Regardless, these are the primary components affecting the costs: 

Per-minute or per-hour charges. Typically, outsourcing vendors charge for hour/minute worked, but it can vary. If your business needs help with handling high volumes of data or operates in a highly complex environment, the price can get considerably higher. 

Setup fees. Integrating outsourced call centers into your system may require resources, so many vendors charge for this process once. This integration of one’s staff into the clients’ system and covering the adaptation to a novel infrastructure is necessary but not always a cheap procedure. 

Variable costs. Some other spending you might want to prepare for are charges for after-hours support or multi-language support. 

Still, evaluating the costs of any outsourcing requires working closely with vendors and asking them about the potential prices and plans that they might have in mind. Some of them are pretty flexible while others might have already prepared but affordable plans. Doing your research and comparing at least a few options will give you a much better knowledge of it. 

What to Expect From Outsourcing 

If you’ve decided to go ahead with outsourcing, here’s what you can expect once you successfully adapt your operations. 

Better focus on main business objectives. You don’t just reduce call center costs. When you shift from an in-house to an outsourced call center, you achieve more than a financial advantage. Regardless of your business focus, you have time to approach your business strategy, production or services development, marketing, any any other action that you couldn’t do previously. 

Access to niche expertise and a specialized skill set. Outsourcing isn’t just about delegating routine tasks; it’s also a strategic way to tap into niche expertise and specialized skills that may not be available in-house. Unless you perform highly specific hiring that can burn your time swiftly, you won’t have the same in-depth knowledge of the specific industries or cutting-edge methodologies typical of call centers. If you’re working on complex projects, this talent pool can be an advantage you’ve previously overlooked. 

Innovation and progress. With outsourcing, you inject new ideas and energy into your business. External teams that are unfamiliar with barriers or cultures existing in your company can be more daring and have a fresh perspective on your execution and methods. 

Employee morale boost. It’s common to misinterpret the potential of outsourcing for staff satisfaction. Nonetheless, this choice has multiple promising opportunities in terms of morale improvement. Offloading repetitive or low-value tasks to external partners can make your employees more satisfied and aimed at meaningful tasks. This, in turn, would cause better engagement and lower turnover. 

Wrapping Up

Outsourcing call centers is a key decision to reduce call center cost with additional benefits as a result. Once you carefully select your outsourcing partner and integrate your systems, you will build your novel competitive advantage on top of affordability and smart spending strategies. Keep in mind the long-term value of this strategic shift; this way, you will drive innovation and support your business agility.

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