Top 10 Cost Reduction Strategies

Contact centers are always under the microscope to ensure a balance between customer experience and operational expense is maintained. The fundamental responsibility of most inbound "customer service" contact centers is to support and retain customers, ensuring that customers are satisfied and that the associated revenue is protected. The challenge for most service contact centers then becomes determining which strategies to leverage to reduce contact center operational expenses, while still maintaining customer satisfaction, while protecting both revenue and reputation.

Below is my list of "Top 10 Cost Reduction Strategies" for inbound customer service contact centers. These strategies were developed from my professional experience of both leading and supporting over 75 contact centers with 9 different companies (GTE-Internetworking, Cleartel Communications, IDS Telecom, NII Telecom, Supra Telecom, NOW Communications, Comcast, and MetLife). These strategies are based on the assumption that labor costs represent the majority of an inbound customer service contact center's operational expense line. These strategies represent the largest return on investment to reduce labor costs from a day to day "operational" viewpoint, and does not address strategies that involve labor rate reduction strategies, including shifting traffic to outsourcers, shifting operations to more cost-effective geographies, or shifting full-time/part-time labor mix for reduced benefits exposure. While each of these are valid strategies for reducing labor costs, the purpose of my top 10 list is to demonstrate which strategies are most effective in rapidly removing costs from a day to day operational viewpoint. These strategies are "workforce management" centric, and focus on the 4 categories which directly influence the headcount required to service customer inquiries.

Contact Center Labor Cost Categories

For the purpose of demonstrating my top 10 cost reduction strategies, I categorize each strategy into 4 buckets:

• Volume
• Handle Time
• Shrinkage
• Occupancy

To demonstrate the most effective approaches to reducing operational costs, I assume that a contact center wishes to maintain its service level objective goal. For demonstration purposes, I will work with an 80/30 service level objective, meaning the target KPI is set as such that 80% of callers inquiries are answered within 30 seconds, measured in 30 minute increments.