Balancing Cost and Value in Your Contact Center Solution: A Holistic Approach

The continuous struggle to reconcile cost and value is a perennial topic within the call center industry. The critical question is, how can we strike the perfect balance between enhancing the customer experience and maintaining a practical budget? A common misconception is that low cost necessarily translates to poor service – but this isn’t always the case, especially when outsourcing onshore. (Admittedly, with nearshore and offshore outsourcing solutions that’s a bit different). 

Notably, companies like Lego are renowned for their lavish spending on customer service processes, anchored in the belief that superior service cultivates invaluable customer advocacy. While this model is appealing, it’s unattainable for many organizations whose executives have to perpetually justify every penny spent on customer service. In fact, instead of growing, customer service budgets often face the chopping block.

Thus, the critical tension between cost and value becomes a central concern in devising customer experience (CX) strategies. The goal is to boost customer experience scores without escalating costs – and perhaps, if possible, to reduce them.

Understanding the cost discrepancies between various solutions is fundamental. Factors such as location (domestic, onsite, virtual, nearshore, offshore) come into play, but what else should one consider?

Two primary factors influence contact center costs: human resources and technology. Here are some key considerations when evaluating these elements:

Employee Retention: Does your contact center function as an employee revolving door? The expenditures involved in recruitment, hiring, training, development, stabilization, and replacement of agents are staggering, not to mention the indirect cost to your business in terms of Average Handle Time (AHT), First Contact Resolution (FCR), conversion rates, and ultimately, the customer experience. Companies with higher costs often resort to offering inflated wages to mitigate employee turnover, but this is a short-term solution. Prioritize a partner organization that champions employee retention through proper treatment and can thus manage costs more effectively.

Organizational Structure: How many layers exist in your contact center’s structure? What proportion of your budget is allocated to administrative costs? Be cautious of firms that parade a large team to every client meeting. While this might give an impression of dedicated service, remember that these costs eventually fall on you. As organizations grow, so does their bureaucracy, often with a plethora of unnecessary extras. Determine what ‘nice-to-haves’ are worth the cost versus where your investments will yield the greatest returns.

Technological Efficiency: Technological advancements have significantly reduced costs for companies that have leveraged them effectively. Unfortunately, many traditional contact center providers are shackled by expensive, outdated on-premise data centers filled with switches, servers, and other equipment that were once state-of-the-art but are now inflexible and cost-intensive. Evaluate whether your partner has embraced cloud-based solutions to prevent unnecessary expenditure.

In essence, the ideal partner invests in areas critical to your business and develops a strategy to incrementally spend on aspects that matter to you.

A crucial takeaway is that partnering with a cost-effective company that delivers value at your target price is a wiser approach than negotiating a higher-cost company down to your budget, thereby risking the loss of their value proposition. In the balance of cost and value, the ability to offer exceptional service without breaking the bank is the winning formula. It takes a bit of experience to find the ideal vendor, but we here at Cynergy BPO are here to help. Please feel free to reach out.