8 Strategies to save customer service costs

8 Strategies to save customer service costs

Opinion ·

The eCommerce industry is expanding quickly. For many businesses, a website or eCommerce platform is an excellent tool for providing online products or services. But when it comes to cost-cutting or budgeting, do you know which department gets the axe first? Customer service. Customer service teams are constantly pressured to cut expenses and adhere to "the budget", much like sales or marketing teams.

Even though it's true that "you have to spend money to make money," the money you spend shouldn't put additional strain on your finances. The key to operating a successful business is making sensible financial decisions while providing excellent customer service regardless of your business size

Making wise, targeted investments in customer service is the secret to controlling expenses and maximizing return on investment. All businesses would like to invest their resources to hire the best teams, software, and hardware for customer service, but if you want to stay competitive you have to do it in the right way.

If you want to lower your customer service costs, you have come to the right place. Let's look at some tips to reduce customer service costs!

Why is customer service crucial to your business?

According to the Zendesk Customer Experience Trends Report 2021, 75% of customers are willing to spend more money with a business that values them.

Customer service is a requirement for success in a world dominated by technology. According to data from Microsoft, customer service is crucial for retaining customers' loyalty to brands.

However, the customer service provided by brands is usually insufficient. The worst kind of customer service is none at all. When it comes to the quality of the service, there is a considerable gap between how businesses and customers perceive it. While 80% of companies believe they offer exceptional customer service, only 8% of customers concur.

Customers today have excessively high standards and limitless choices. Even while fewer consumers may be having issues, more customers than ever before are inclined to voice their complaints about poor customer service.

Among all of this, the silver lining is that Millennials are willing to spend 21% extra for organizations that provide exceptional customer service.

Here are five reasons why customer service is the backbone of your brand:

1. It increases customer retention

A satisfied consumer is more likely to do business with your firm again, and the more devoted customers you have, the more your business will develop to its maximum potential.

For instance, if your customer care staff has a simplified process that makes online returns quick and straightforward, you're more likely to maintain customers and cultivate a loyal customer base that enjoys your no-hassle return policy.

2. Customers are willing to pay more to companies with excellent customer service.

A remarkable number of customers are willing to pay more for excellent service, although it is difficult to place a price on it. Positive customer service interactions will immediately benefit businesses since customers greatly value how a customer service team treats them.

More than 80% of customers said they would be willing to pay more for a superior experience.

Any business that doesn't value customer service will fail in an era where businesses are learning to do so. Additionally, one positive interaction might convince them to continue with a company, while one unfavorable encounter might make them rush to a rival.

3. Reinforces the brand's value

Since members of your customer service team interact with customers daily, they bear responsibility for upholding the brand's vision and core principles.

Positive reviews and word-of-mouth recommendations for your company can result from providing excellent customer service and bringing in new customers. A positive public image can improve customers' perception of your business, goods, and services, which translates into a brand name and more profits.

4. Customer service boosts Customer Lifetime Value

Customer lifetime value (CLV) is crucial when managing a company. CLV represents the total revenue you can expect from a single client account. Increasing this figure indicates that your consumers are more regular purchases from you.

However, there is an opportunity for improvement in how organizations use this crucial indicator since only 42% of businesses can do so.

Investing in your customer support team is an incredible way to grow customer lifetime value. If customers are satisfied with your customer service and support staff, they are more likely to make another purchase from you. Or, at the very least, they will spread the word about their wonderful experience, improving your rapport with your audience.

Customer service increases new consumers' trust in your company and makes it easier for you to cross-sell and up-sell additional products. New users will have more confidence that your sales team is proposing goods that meet their needs, resulting in a more seamless purchasing process for both the customer and your staff.

5. Creates positive word-of-mouth

Positive recommendations are disseminated by satisfied current and previous customers. They tell their friends, family, and coworkers about your accommodating and courteous customer service, and they might even post about it on social media. Then, your products are bought by their contacts as a result. Often, word-of-mouth advertising is the best and most cost-efficient kind of promotion for a company.

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Although customer service is a crucial part of any business, it will cost you if you don't plan and invest your budget wisely. Let's look at some tips to reduce customer service costs.

How to monitor your customer service costs?

An incredible method to figure out where the money is going and how to reduce wasteful spending is by keeping an eye on customer service costs. You can track metrics that determine your customer service cost and display it in a relevant way. Here are some metrics you can start with:

1. First call resolution rate

The percentage of customer calls or chats your support staff members successfully resolve on the first try is known as the first call resolution rate. First call resolution, in simple words, is when a consumer is able to solve his or her problem already after the first interaction with the customer service.

2. Percentage of escalated calls

Occasionally, agents can't always solve issues right away and must redirect the conversation to their superiors. Nothing is wrong with this. Here, managers jump into the conversation with the customer and work to find a solution.

However, the number of redirected calls needs to be monitored and controlled. If it's too high it indicates a problem. Thus, you should look for potential solutions to reduce the amount of redirected calls, maybe through a good training program for your agents.

3. Average waiting time

Keep track of how long customers typically wait in line. If it takes a while, add more people to the team to finish the task. Otherwise, it makes sense that clients would get dissatisfied and choose one of your rivals.

4. The average time it takes your staff to answer calls

It is best if it is brief. If not, you should schedule training sessions more frequently or revamp your hiring process. We will talk more about this in the next section.

8 strategies to reduce customer service costs

The customer service department doesn't need to have the biggest budget but should know how to optimize it to get the maximum return. However, that does not imply that you should compromise on the standard of service. To make things easier, we have compiled a list of the best tips to reduce customer service costs:

1. Hire the right customer service representatives

The expense of hiring customer service personnel is relatively high. Your company has to pay for candidate sourcing, qualification checks, background checks, referral bonuses, job listing websites, and a long list of other expenses.

According to Glassdoor research, an average American firm spends roughly $4,000 to hire a new employee, and it takes about 24 days to fill a vacancy,

Your company cannot afford to make hiring mistakes to keep its customer service costs low. You must employ individuals with the appropriate expertise, skill set, and drive to serve consumers.

However, finding suitable candidates only solves half the problem. Retaining and motivating your finest employees is equally crucial. Give them an environment at work where they feel empowered and present the best prospects for their professional growth. Reward them with bonuses or other perks to show appreciation for all they do to satisfy your clients.

2. Prioritize the well-being of your support staff

Optimizing your company's general HR practices can lower the general agent turnover rate and save customer service expenses. Here are some guidelines:

  • Improving the employment system
  • Collecting support agent feedback
  • Providing career development programs and coaching

3. Invest in employees' education

Making sure your staff is properly trained ensures that you always have a customer care team capable of meeting each customer's specific requirements. The difference in terms of happy consumers will be seen right away.

Your customer care representatives are, after all, the public face of your company. They frequently represent your company's first point of contact with clients, so it's critical that they are knowledgeable, well-groomed, and taught to take good care of them.

Investing in training ensures that your customer service representatives are fully informed about your company, its products and services, and all of the necessary procedures for providing superior customer service. Thus, you should never ignore it.

In addition to having a solid understanding of customer service best practices, trained representatives will be better able to assist consumers, saving them time and money while fostering positive brand perception.

4. Identify your customer's concerns

Customers contact your support hotline for a variety of reasons. It could include anything from maintenance requests to product issues. However, it is possible to trace the causes of user calls and pinpoint the top ones with a state-of-the-art platform like Layerise.

Determine a solution for the main issues once you have identified them. Let's assume that most of the customers' calls are the result of problems encountered during the purchasing process. You can simplify the purchasing process and use automation to assist the customer in completing the purchase as quickly and easily as possible.

5. Provide omnichannel support

In addition to enabling quick responses, leveraging social media for customer service can enable a brand to get more from their customer's purses. Consumers are likely to spend 20% to 40% more with companies responding to social media customer service requests.

Customers today expect businesses to provide a variety of communication options. Social media's emergence in the consumer sector has made setting up several channels easier and more affordable.

However, creating a seamless experience by combining communication from numerous channels is challenging. The solution is an omnichannel support plan. You can integrate cross-channel communication to give relevant customer care at every touchpoint.

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Omnichannel support improves productivity, adaptability, and resolution time, which lowers overall customer service expenses.

6. Use software to automate workflow

You don't need a fancy degree to understand that time is money in the business world. You can lower customer service costs and maintain customer satisfaction if your representatives can complete more work in a shorter amount of time. Yes, it is as easy as it seems!

You can automate your workflow by using tools that enable higher customer service productivity and efficiency. Tools like Layerise, can facilitate your customer service representatives dealing with customers' complaints or requests.

For instance, when using the Layerise chat feature, your representatives won’t need to search for specific customer information because all this data will be automatically displayed on the side.

7. Implement self-service tactics

Customers no longer want to call customer service and wait on hold when they need help. Customers want businesses to offer self-service support with the option to contact the agents if necessary. You can store information about your products and services in a support section on your website. It frequently has FAQs, instructions, forums, and a chat feature.

For obvious reasons, building a platform for self-service is a wonderful time and money saver. It eliminates the need for time-consuming, repetitive service requests altogether. By lowering the number of incoming calls and tickets, self-service alternatives can considerably cut your service costs.

8. Address customer concerns proactively

To reduce customer service costs, create a “Customer Experience Map”. Draw a flowchart of your customers' steps to access your support system and note any procedures or features that hinder the user experience. Fixing these problems as soon as possible can increase client satisfaction with your business.

Additionally, it will result in fewer follow-up calls, shorter call times, and faster problem resolution, which will help reduce customer service expenses.

How Layerise can help you cut customer service costs?

As soon as brands recognized the advantages of retention over acquisition, they began to prioritize customer service. Customer satisfaction is not the only goal of customer service. By making mastering your operations, you can lower your customer service expenses and improve your bottom line.

To help brands lower their customer service costs, Layerise offers a unique solution. Brands can create long-lasting trust-based relationships with their customers while maintaining recurring revenue streams using Layerise's cutting-edge platform.

Layerise provides the most seamless data onboarding experience for your customers. It allows you to collect relevant data about your customers during the registration process. Thanks to these pieces of information the customer discloses, Layerise automatically personalizes the experience for your customers.

Using this consumer data, you can automate marketing campaigns depending on your target market's demographics and enhance conversions by creating customized and topical send-outs.

We can also help you by providing self-service support, onboarding support, educational and entertaining content, and real-time chat support to your consumers around the clock.

To discover more about our solution, schedule a free demo with us today!

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