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How to reduce customer service costs

Just like sales or marketing teams, customer service teams always need to reduce customer service costs and stick to "the budget".  However, more than just a cost center, customer service adds value. Customer service becomes the key difference driving business development as competition and customer demands rise. It does not require spending a lot of money to give them the best experience. The expansion of your company may be hurt in the long run by a lack of cost-effectiveness.

Keeping costs low does not need reducing quality. It is the sweet spot where you can deliver a better customer experience without reducing resources by increasing the efficiency of the current resources. 

So how can customer service costs be cut while maintaining the level of service? In this article, we'll cover all you need to know about how to reduce customer service costs :

  • Why is good customer service critical to business success?
  • 8 tips to reduce customer service costs
  • Conclusion

Why is good customer service critical to business success?

Any business's success depends on creating positive brand interactions and customer experiences. No matter what you sell—technical products, cleaning services, pet supplies, furniture, or home décor—happy customers want to tell others about their great experiences. According to the study, 94% of customers believe customer service is an important factor in their brand choices and purchasing decisions.

Although your items may be the greatest in their class, it's your customer experience when they contact you for support that will keep them loyal to your company for a long time. Instead of purchasing an excellent product and afterward feeling underappreciated, they would be satisfied to do so and receive VIP treatment in return for their purchase of a good product.

However, your ability to provide excellent customer service will impact your revenue and level of customer loyalty.

8 tips to reduce customer service costs

Customer happiness, cost to serve, managing the cost of customer service, and customer retention are the three main KPIs that brands need to track and measure. 

Continue reading to learn about 8 tips to reduce customer service costs that are based on these KPIs.

1. Hire and retain the right customer service experts

It is expensive to hire customer service employees. Your company must pay for candidate sourcing, eligibility checks, background checks, referral bonuses, job listing websites, and a long list of other expenses. In addition, your company cannot afford to make hiring mistakes in order to reduce customer service costs. To help customers, you need to hire employees with the necessary training, expertise, and motivation.

However, finding the right candidates only solves half the problem. Retaining and motivating your best employees is equally important. Give them an environment at work where they feel empowered and present the best opportunities for their professional growth. Offer incentives or other perks to thank them for their efforts in preserving your customers' satisfaction.

2. Streamline customer communication

No matter how or when a customer contacts you, they expect outstanding help. Customers today demand a variety of interaction options from businesses. They switch between devices while communicating, submit service requests through the most appropriate channel, and contact you whenever they have free time. The development of social media in the customer sector has made setting up several channels easier and more low-cost. However, creating a seamless experience by combining communication from numerous channels is a challenge.

The answer lies in omnichannel customer service.  Through the integration of communications from multiple channels, omnichannel solutions enable you to deliver relevant customer assistance at all touchpoints.

Keeping agent productivity high and support expenses low while integrating all modes of contact will help you provide high-value, consistent experiences across all touchpoints.  

Related article: Omnichannel Contact Center: How it works?

3. Automate repetitive tasks using customer service software solution

Costs associated with customer service operations can be significantly decreased by automation. Businesses may automate workflows and stop depending on manual chores by choosing the correct customer service software solution. In order to increase team productivity, team members might work together across departments.

4. Gathering customer feedback and taking action

Create systems to collect customer feedback on their interactions with your products or services. Recognize typical problems and potential improvements. You can lower the volume of incoming customer support cases and queries by fixing these problems. 

Businesses no longer have to guess at the support needs and preferences of their customers due to customer feedback. Giving the customers what they want, reduces customer service costs. Avoid wasting money on new technologies or methods that may not only be outside your budget but also aren't applicable to your existing support goals.

5. Using chatbots for customer support

Chatbots are quite useful for brand communication because most customers don't want to wait for a response from customer service. Due to their constant availability, lack of vacation time, and immunity to physical or psychological stress, chatbots make excellent employees.

In addition, chatbots that are driven by AI are an excellent tool for cutting costs in business. According to the statistics, 57% of executives said that chatbots bring significant ROI with minimal effort. Furthermore, these bots interpret the "intent" and "sentiments" behind a customer's query using artificial intelligence and natural language processing. They are able to share the best answer. 

6. Use self-service to reduce support team workload

It goes without saying that building a knowledge base for self-service can save you a lot of money and time. It prevents the risk of time-consuming, monotonous service requests in the first place. Self-service solutions can significantly lower the volume of incoming calls and tickets, which will significantly reduce customer service costs. 

In terms of customer service, we have reached a tipping point where customers prefer direction to indulgence. When a problem arises, customers no longer want to call and wait on hold for assistance. Customers prefer businesses that offer a self-service knowledge base with the ability to contact human support if necessary. A knowledge base is a library of details about your products and services. It often includes FAQs, how-to articles, forums, and a support section.

7. Create an online forum or community

You may encourage the sharing of information between prospective customers and current customers by creating an online forum or community. Users can post queries, discuss their particular experiences, provide knowledgeable advice, and assist one another in this process.

One of the best suggestions to reduce customer service costs is to set up an online forum for your audience. You can provide customers with the best platform for finding answers to their problems, and your agents may always keep an eye on the solutions given by other customers.

Moreover, to review inquiry history and determine whether a previous answer worked for them or not, connect community portals to ticketing systems.

8. Monitor and analyze performance regularly

Continuously monitor and analyze the performance of your customer service operations. With Live you can analyze and use AI to predict business trends, so you make data-backed decisions. However, use key performance indicators (KPIs) to assess efficiency, identify areas for improvement, and track the impact of cost-saving initiatives.


Now that you know how to reduce customer service costs, it's time to put your knowledge into practice. When businesses saw the potential of retention over acquisition, they started putting a high priority on customer service. Customer satisfaction is one of many goals of providing excellent customer service. In addition to reducing customer service costs, a smart cost plan can improve the efficiency of your business's operations and boost your revenue.

Furthermore, start by assembling the best team members and providing them with technical and soft skill training. To make customer support simpler for your agents, collect customer feedback whenever you can and use cost-effective resources like chatbots, knowledge base software, and ticketing tools. Ultimately, this can lead to higher customer satisfaction, improved brand reputation, and increased profitability.

Maintain consistency in your efforts, and you'll soon notice a decrease in your support expenditures!

Don't hesitate to get in touch with us today if you want to learn more about how the Live product family can help you to boost your global customer experience strategy. 

Learn more about how the Live product family can help you support and improve your customer experience strategy.

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