Call centers can quickly become expensive due to the costs of employees, equipment, and technology. For stakeholders focused on cutting costs, like the 54% who prioritize cost reduction, an overpriced contact center is not an option.
So, how do you reduce call center expenses in an effective and employee-friendly way? Based on my own experience of over a decade in the contact center industry, in this blog, I have collected call center cost-saving strategies that I implemented, and you can follow them as well.
But first, you need to understand how much setting up a call center costs.
Cost Breakdown of Running a Call Center
If you plan on running a call center in-house, it’s important to consider the different costs involved. We have created a breakdown of various expenses involved that a business owner should be aware of, before voyaging on this journey.
- Average Salary of a call center agent: $40,000/year
- Training Costs: $85/month
- Call center software: ~$120 per user/month
- Business Internet: ~ $165 per month (depends on provider and package)
- Network infrastructure: ~$2,000
- Data security tools: ~ $60 per user/month
- Office Rent: $700/month (for a 150-square-foot office)
How I Increased Call Center Cost Savings
Before we get to understand the cost-cutting, the first thing that you need to measure is how much of the cost you are spending on each item.
For example, I have divided the cost brackets into 4 areas:
| Item | Costs |
|---|---|
| Salary costs | $400,000/year |
| Infrastructure costs | $178,800/month |
| Software tools | $74,400/year |
| Maintenance Cost | $40,000/year |
The total expense to run a call center in the USA is estimated to be around $693,200 for 10 full-time agents.
Now that you have measured different segments where your expenses are going in, let’s try to figure out the solutions in each segment.
Jump to Section:
- Problem: Salary Costs
Solution 1: Use AI-based Customer Service Chatbots
Solution 2: Outsource Call Center Operations - Problem: Infrastructure Costs
Solution 4: Try a Hybrid Approach to Manage Call Centers - Problem: Software Tools
Solution 5: Market Research for All-in-One Tool
Solution 6: Adopt Strong Quality Control Measures - Problem: Maintenance Cost
Solution 7: Incorporate Cloud Call Center
A) Salary Costs
The biggest expense bracket that I had on my sheets was the salary of employees, and I was running a call center of 10 people at that period.
Here’s the salary cost breakdown of in-house employees of my call center:
- Salary Cost per Agent= $40,000/year
- Hiring 10 Agents= $400,000/year
Note: My agents were working full-time for 8-hour shifts. You can expect lower rates for shared agents.
Moreover, this is the estimated salary of a call center agent in the U.S., and these rates vary depending on the experience and location.
How Did I Save on Salary Costs While Running a Call Center?
Solution 1: Use AI-based Customer Service Chatbots
These bots handle common inquiries and help route tickets, leaving human agents with fewer cases to manage. This reduced the need to hire more staff for backlogs.
Chatbots offer 24/7 service, cutting down the need for additional staff during off-hours, which benefits both customers and businesses. This provided us a good strategy leading to the road of call center cost savings in the long run.
Here are the top three AI chatbots for customer service that I took advantage of along with their respective pricing to help you:
- Guru (starting from $10/user/month)
- Zoho SalesIQ (starting from $7/user/month)
- Intercom ($74/month billed annually)
Let’s assume that you use Guru for its AI customer service. If you have 10 agents the cost will be $100/month which means $1200 per year. As compared to hiring a call center agent this is a significant cost reduction. You can expect to save 99.7% when opting for this method.
Note: AI chatbots can affect the customer experience and retention rate in an extremely bad way. It’s recommended to use an approach that is a mixture of both human and AI agents.
Solution 2: Outsource Call Center Operations
The second step that I did was to analyze the labor costs across the globe. I came to know that labor in under-developing countries is way cheaper than in the U.S.
I shifted my call center to these places, and it helped me to have massive savings. However, if you are a small company with 10-20 agents, it might be counter-effective to open a complete call center given a lot of operations costs are involved.
Enter HiredSupport – you can outsource your call center, and it starts from $7/hr
If you want your customer support to have a human touch and not completely rely on AI chatbots then outsourcing your call center operations to an agency such as HiredSupport is the right way to go. This agency offers its services starting from $7/hr.
- Pricing: $7/hr
- Working Hours: 672 per month
- Total Amount Spent: $56,448/year
A dedicated team would be provided that will assist customers 24/7/365 helping resolve issues without the uncertainty of power breakdown. With this method, you can save up to 85.8% of your cost dedicated towards call center operations.
Solution 3: Take Advantage of Self-Service Support
The primary purpose of the support is to answer the queries of the customers. Many times, the customer doesn’t really need to talk with a support agent if the information is already provided on your website.
This is called self-service support. I used the following self-serving support to minimize the load of my agents:
- FAQs
- Support forums
- Knowledge bases
As a business owner or support manager, your goal should be to collect the common queries asked by the customers and then formulate an FAQ out of it. This will help you to minimize the workload of the present agents, and the costs as well.
B) Infrastructure Costs
The next cost that a call center has to go through is infrastructural costs. I went through the following costs while running my call center:
| Item | Costs |
|---|---|
| VoIP System: | $50 per line |
| 10 Agents10 Agents | $6000/year |
| Computer Devices | $1900/device |
| For 10 Agents | $19000 (fixed price) |
| Office Rent | $12,500/month (California) |
Total Estimated Infrastructure Costs: $14,900/month (including both fixed and variable costs)
Note: Due to privacy reasons, I have listed the accurate costs that I went through. However, I gave a rough estimation of my expenses while running these operations.
How to Save on Infrastructure Costs When Running a Call Center?
Solution 4: Try a Hybrid Approach to Manage Call Centers
Moving from an in-person setup to a fully remote call center can save costs significantly. On average, businesses see a 27% reduction in expenses. Plus, virtual call centers experience 35% less downtime.
By opting for this strategy, I saved on the utilities costs since I opted for hybrid work. The other expenses remained relatively the same.
However, if you are going totally virtual, It is estimated that you can save up to 83.4% when working alongside a virtual call center.
C) Software Tools
To make the call center function effectively, you may need a subscription to different software to achieve the best results. While it depends on your needs, I have gathered the most used software in the industry and have come up with their pricing structures:
| Software | Price | Agents | Yearly Costs |
|---|---|---|---|
| Intelligent Call Routing Software | $150/user/m | 10 | $18,000/y |
| IVR Software | $150user/m | 10 | $18,000/y |
| Outbound Calling Software | $200/user/m | 10 | $24,000/y |
| Call Monitoring and Recording Software | $120/user/m | 10 | $14,400/y |
| CRM Software Integration Software | $150/user/m | 10 | $18,000/y |
Total Annual Expense: $74,400/year (for a team of 10 agents)
Solution 5: Market Research for All-in-One Tool
I ran through the market research and came up with the following solution:
- Automate the tasks using our internal processes
- Only buy the subscription for software that we cannot afford to sustain without.
- Try using the all-in-one tool for your needs (normally they are cheap)
Using this methodology, I saved somewhere between $20,000 on my software costs
You should choose software that can provide you with all the above-mentioned features and avoid going for them on an individual basis.
I would suggest extensive market research and taking quotations from different vendors to see what best matches your business needs. Once shortlisted, negotiate the price and you may end up saving thousands of dollars.
You can expect to save somewhere between $20,000 through implementing an all-in-one tool.
Here are some call center software I would recommend that have all-in-one features:
- Zendesk
- RingCentral
- Freshdesk
Solution 6: Adopt Strong Quality Control Measures
Using strong quality control methods, such as regularly monitoring calls, holding feedback sessions, and providing training, helps reduce costly mistakes and boosts customer satisfaction.
Keeping service quality high lowers the chances of calls being escalated, which leads to better efficiency and lower costs.
D) Maintenance Cost
Following are the maintenance costs that my office has to bear while running the operations:
| Item | Costs |
|---|---|
| Utilities | $20,000/month |
| Maintenance and repair of equipment | $10,000/month |
| Customer data storage and security measures | $10,000/month |
Total Maintenance Cost: $40,000/year (almost)
Solution 7: Incorporate Cloud Call Center
Cloud call center reduces the need for IT support since maintenance and upgrades are included, leading to significant cost savings. A report shows that companies can cut infrastructure costs by 15-40% by moving to the cloud.
A low-income country such as Pakistan is a good place to set up a cloud call center. You can outsource this entire operation to agencies such as HiredSupport.
This call center has its head office in California and a back office in Pakistan which means they can help you hire resources starting at just $7/hr. They have a Clutch rating of 4.9/5 stars which means that they are trusted by businesses across the world.
Conclusion
Establishing and managing the costs of a call center in-house can be difficult for business owners who are exploring this idea. If you are still confused about reducing your call center costs, you can talk to me directly.
I created a company called HiredSupport in 2016. It is a call center based in California, with operations spread across the globe, giving business owners the chance to work with talented bilingual agents starting from just $7/hr.
You can also opt for a free trial, with no strings attached, and commit only if you are satisfied with their services.
You can also request a quote from their sales team (1 (800) 655-5891, email: [email protected]) to measure how much you can save by outsourcing to HiredSupport.
