How to Reduce Call Center Costs

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Managing call center costs, and customer service demands, is a requirement for a successful project outcome. Contact center expenses differ based on numerous factors, with technology, service protocols, labor, and quality standards as the most prevalent. Businesses must focus on cost containment without negatively impacting customer experiences. For tips on how to successfully reduce call center costs while maintaining an effective campaign, keep reading below!

7 Ways to Reduce Call Center Costs

1. Use the Latest Technology

There are many call center software options to choose from. Take the time to properly define your needs, current and future, before beginning the process of vetting your options. Take advantage of cost-saving options like VoIP for your communication needs, and if you want to remain competitive,  make sure your technology provides omnichannel or multichannel options –  phone, email, chat, and SMS – for your customers to use. Allowing customers to choose how they interact with you does affect the bottom line. For example, not everyone can express themselves as well verbally as they can in writing. Forcing someone in this situation to communicate via telephone will undoubtedly result in a prolonged handle time and increased cost per contact.

2. Reduce Agent Attrition

According to various research, the cost of attrition for one call center agent can range from $3,000 to $10,000. It is arguably the most expensive cost of operating a contact center. A Cornell University study indicates that replacing one agent costs a company approximately 16% of the agent’s annual salary. Therefore, an agent who is paid $18.00 per hour, or roughly $36,000 per year, results in a potential attrition cost of $5,760. This fee is to replace just one agent! Successful practices focused on reducing agent attrition include targeted recruiting, practical training, daily management by tenured staff, flexible schedules, constructive development of skills, and providing a career path. 

3. Maximize First Contact Resolution Rate

If agents can address customer requests during their initial contact, you save money in reducing the number of touches required to handle a specific need. The most easily measured benefit of this is that you decrease your cost per resolution by eliminating multiple interactions. Second, you reduce the demand for personnel, since fewer overall contacts require fewer resources to serve them, both on an agent and management level. A benefit of maximizing first contact resolution rates beyond saving money is the positive impact on CSAT scores. Proper training and access to knowledge-based resources required to provide appropriate support are critical components to building a program that maximizes first contact resolution rates and reduces handle times.

4. Provide Self-Help Options

Employing technology with self-help options, such as IVR, saves money by reducing the demand for human support. In any eCommerce business, for example, customers often contact support to request the shipment date on their order, a request that can be answered without a live agent. When you design a program, identify all opportunities for self-help. Once live, you should monitor reports reflecting the reasons customers are contacting customer service and focus on identifying additional needs that can be satisfied through the self-help option. Consider this a fluid component of a successful program.

Reducing live agent demand saves money per contact. The reduction of live staff is significant since we understand that the cost to replace agents due to attrition is quite expensive, as previously noted. The fewer agents needed, the better when it comes to attrition costs.

5. Allocate Sufficient Management Personnel

Companies must budget for sufficient management staff. The investment in labor costs for trainers, supervisors, team leaders, quality assurance analysts and client service staff is essential to the success of programs and ultimately reduces costs. Without support and training, agents can’t do their jobs properly. Communication is critical in providing the mentoring that agents require to succeed, and your management staff is central to the agenda. Agents who leave contact center jobs frequently cite a lack of training and feedback as reasons for doing so. The cost to replace agents is high, and management staff plays an integral part in retaining their team members. Ensure your program budget includes funds for enough managers to drive successful program results while developing agent skills. 

6. Analyze KPIs to Manage Agents

Constant monitoring of KPIs is a must to understand where managers should be focused. There is a lot of data available on every program, no matter what type. You should monitor primary data such as agent’s availability, occupancy, and abandon rates. Additionally, program-specific metrics such as handle time, first contact resolution rate, sales conversion rate, and transfer rates should be measured against goals established at the program’s outset. 

Even the most experienced agents can make mistakes and may require additional assistance to be their best. KPIs serve as the starting place for understanding where opportunities exist for improvement. They provide management with the insight needed to understand where additional training and mentoring should be focused, the outcome of which should be better results and lower costs.

7. Employ Virtual Staff

The brick-and-mortar office model is no longer the norm. The pandemic demonstrated how companies can effectively maintain, if not increase, both production and quality, using virtual staff. There are many benefits to employing remote agents. Employers benefit by accessing qualified staff in labor pools they otherwise couldn’t access. There is also less attrition amongst virtual agents, a significant victory when managing call center costs. 

What Are Inbound Services?

The current labor market has been undeniably tough on employers, especially those in the customer service space. According to the U.S. Chamber of Commerce, the professional and business services industry (which includes call center support) has only been able to fill 65% of its vacancies. 

If you’ve tried hiring a support agent recently, you know firsthand just how scarce the talent pool is, but thankfully, outsourcing inbound calls can help you alleviate your hiring woes and deliver better service to your customers. The question, however, regards how much it will cost you.

With that in mind, join us as we take a deep dive into inbound call center outsourcing pricing, benefits, and knowing how to choose the right vendor for your business. 

Inbound services primarily focus on handling incoming calls from customers. These can be support calls, sales inquiries, product information requests, or even complaints.

Instead of having an in-house team answer these calls, many businesses outsource these services to third-party call centers, which also manage emails, reply to live chat requests, and engage in other types of customer communication. 

Understanding Inbound Call Center Outsourcing Costs

While you are likely more than ready to put your customer support agent hiring woes in the rearview mirror, you can’t just adjust course without considering the cost of doing so. The good news, though, is that inbound call center outsourcing costs are very straightforward.

There are two predominant call center outsourcing pricing models in the industry, which are as follows: 

Per-Minute Pricing

In a per-minute model, your business is charged down to the number of minutes (sometimes even seconds) that a call center agent spends on calls. That can be beneficial if you manage a smaller business and have fluctuating call volumes. You only pay for what you use, so it is a very cost-effective approach.

Hourly Pricing

Here, your business is billed on an hourly rate for each agent. If you have a predictable call volume and require dedicated agents to be available during specific service hours, hourly pricing might be the better option for you. 

As you compare these pricing models, consider how many hours your agents spend on the phone. Look back over the past year to properly gauge your monthly costs and identify any seasonal spikes that may drive up your support expenses. 

Pay for Performance: A Unique Industry Model

While per-minute and hourly pricing are most common among contact center service providers, neither of these models accounts for performance. That means your business has to pay for service regardless of whether the contact center achieves the desired results, such as improved customer satisfaction scores.

In response to this, a new call center strategy is arising: pay for performance. With this model, the contact center works with the business owner to establish performance metrics against which they measure their success.

The contact center then uses those metrics as baselines for billing, ensuring that the burden of performance falls on the contact center, not the client. It also reduces money in the call center budget spent on services that don’t bring ROI.

If you’re wondering how to reduce call center costs, this is a viable model to consider.

Benefits of Outsourcing Inbound Calls

Many businesses are deciding to outsource inbound calls for some of the following compelling reasons: 

Predictable Costs

By outsourcing, you will often get a clearer picture of your monthly costs, and thanks to set pricing models, you can better forecast and manage your call center budgets. The heightened awareness of what you’re spending can help with call center cost reduction.

Conversely, the costs of managing an in-house support team are constantly fluctuating, and between overtime costs, training and onboarding, and attrition, it can be next to impossible to predict your costs from one month to the next. 


If your business experiences a lot of seasonality, you can easily scale up or down depending on your needs, thanks to outsourcing. You won’t have to let call volume spikes or the holiday shopping rush keep you up at night, as you can trust that your call center provider will have it all covered. During lighter times, you’ll experience call center cost savings since you won’t pay for time you don’t need.

No Training or Hiring Headaches

By leaving the tasks of recruiting, training, and managing agents to the experts, you won’t have to worry about the finer details of trying to find talent in the currently scarce worker pool.

Eliminating training and hiring hassles will also unlock significant cost savings for your business and free up your HR staff to focus on more dynamic tasks, such as upskilling your central workforce. 

Better Service Quality 

Call center agents are professionals: They have the knowledge, experience, infrastructure, and on-hand technology to deliver service quality that’s hard to match in-house. 

Your customers deserve the very best, and working with a reputable call center service provider is the simplest way to give them a support experience that nurtures loyalty and keeps them coming back for more. 

Choosing the Right Inbound Telemarketing Services for Your Business

Here are some factors to consider to help you choose the right vendor, along with a few tips to reduce call center costs.

Call Volume

Analyze your call volume to determine whether it is constant or fluctuates wildly each day. Knowing the sort of call volume you receive will help you pick between per-minute and hourly pricing models. Per minute may initially appear to be the most appealing, but if you handle a substantial volume of calls, an hourly approach will likely be cheaper. 

Be aware that a contact center may also offer a hybrid approach where you’re billed both by the hour and by the minute. This is most appropriate in situations where call volume is predictably heavy during one portion of the day and unpredictable or light during other times of the same day.

Your contact center will likely bill you hourly for dedicated agents during that busy shift and per minute for semi-dedicated (shared) agents during low-call-volume times.


One major advantage of outsourcing is its scalability. Be that as it may, you need to first ensure that the service provider you choose can handle the highs and lows of your business needs and that offers multifaceted support solutions on top of outbound calling, such as chat and email support. Even if you don’t need these services right now, it’s nice to know that your vendor can scale out their support if you want to include them later. 

Scope of Services

Ensure that your chosen provider offers a comprehensive range of services that align with the needs of your customer base. While you don’t need to offer support over every channel, you do need to communicate with customers over at least a handful of different mediums. In addition, determine whether your provider offers self-service solutions, as those can help remove friction from the customer journey as well.

Price Transparency

Hidden costs are a big red flag, so ensure your provider offers clear and comprehensive pricing so you’re not in for any nasty surprises when you receive your first bill. Ask about any add-on fees, surcharges, and other such expenses so you know the exact amount you are getting charged. 

Location of Support Agents (Domestic vs. Offshore)

Turning to offshore support agents might save you a few dollars on the front end, but the customer experience you provide is going to largely suffer, as consumers will have to contend with cultural misunderstandings, language barriers, and time zone differences.

Time to Act

The steps outlined above should provide you with action items that can easily save you money. Telecom, Inc. has been building successful, cost-contained solutions for our partners for nearly thirty years. Please contact us to discuss how we can assist you.

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