How can you calculate the cost of customer service per contact?

Customer service is a vital part of any business, but it also comes with a cost. Knowing how much you spend on each customer contact can help you optimize your resources, improve your efficiency, and measure your performance. In this article, we will show you how to calculate the cost of customer service per contact using a simple formula and some key factors.

1 What is customer service per contact?

Customer service per contact is a metric that measures how much it costs your business to handle one customer interaction, such as a phone call, an email, a chat, or a social media message. It is also known as cost per contact, cost per resolution, or cost per case. It is calculated by dividing the total customer service expenses by the total number of contacts in a given period.

Add your perspective

2 Why is customer service per contact important?

Customer service per contact is important because it helps you understand how efficient and effective your customer service operations are. It can help you identify areas where you can reduce costs, improve quality, or increase customer satisfaction. It can also help you benchmark your performance against industry standards or competitors. By tracking and analyzing your customer service per contact, you can make better decisions and optimize your customer service strategy.

Add your perspective

Jeremy Hyde

Senior Director Of Customer Service at Sun Country Airlines
Report contribution
One of the most important reasons for calculating a cost per contact is to understand your “unit cost” as the size of your organization changes. If you are growing, you want to know if you’re scaling efficiently. As you implement process improvements and cost savings initiatives, you want to see year over year impact. This isn’t necessarily about determining what your cost per call “should be”, it’s about seeing how it changes over time.

Like

3 How to calculate customer service per contact?

To calculate customer service per contact, you need to know two things: your total customer service expenses and your total number of contacts. Your total customer service expenses include all the costs associated with providing customer service, such as salaries, benefits, training, software, hardware, overhead, and other miscellaneous expenses. Your total number of contacts include all the customer interactions that your customer service team handles, regardless of the channel, duration, or outcome.

The formula for customer service per contact is: Customer service per contact = Total customer service expenses / Total number of contacts For example, if your total customer service expenses are $100,000 and your total number of contacts are 10,000, then your customer service per contact is: Customer service per contact = $100,000 / 10,000 Customer service per contact = $10 This means that it costs you $10 to handle one customer contact.

Add your perspective

Jeremy Hyde

Senior Director Of Customer Service at Sun Country Airlines
Report contribution
Ask yourself a couple questions when determining what should be included in your calculation: - If you no longer had a customer service team would you still have this expense? - Can I accurately and without unreasonable difficulty access this expense detail? - If an expense is difficult to estimate or quantify, is excluding it impactful? If you only need the number to be “directionally correct” deciding if an expense should be included becomes a lot less complicated. Include the major things that you know you can always access and just be sure you always calculate it the same way.

Like

4 How to improve customer service per contact?

There are many ways to improve your customer service per contact, depending on your goals, resources, and challenges. For example, you can reduce the number of contacts by providing self-service options or clear and accurate information. Additionally, you can increase the number of contacts resolved on the first attempt by improving customer service skills or utilizing tools and processes. To reduce average handle time, consider automating repetitive tasks or using templates or scripts. You can also reduce the cost of customer service by outsourcing or using cloud-based software. Finally, increase the value of customer service by upselling, cross-selling, or generating referrals.

Add your perspective

5 How to measure customer service per contact?

To measure your customer service per contact, you need to collect and analyze data from your customer service channels, systems, and tools. You can use a customer service software, a spreadsheet, or a dashboard to track and calculate your customer service per contact. You can also segment your data by different variables, such as channel, team, agent, issue, or customer, to get more insights and compare your results. You can also set goals and monitor your progress and performance over time.

Customer service per contact is a useful metric that can help you optimize your customer service operations and deliver better value to your customers. By calculating, improving, and measuring your customer service per contact, you can enhance your efficiency, effectiveness, and profitability.

Add your perspective

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

Add your perspective

How can you calculate the cost of customer service per contact?

1

2

3

4

5

6

1 What is customer service per contact?

2 Why is customer service per contact important?

3 How to calculate customer service per contact?

4 How to improve customer service per contact?

5 How to measure customer service per contact?

6 Here’s what else to consider

Customer Service Operations

Rate this article

Thanks for your feedback

More articles on Customer Service Operations

More relevant reading

How can you calculate the cost of customer service per contact?

1

2

3

4

5

6

1 What is customer service per contact?

2 Why is customer service per contact important?

3 How to calculate customer service per contact?

4 How to improve customer service per contact?

5 How to measure customer service per contact?

6 Here’s what else to consider

Customer Service Operations

Rate this article

Thanks for your feedback

Explore Other Skills