Actually, Customer Service IS a Cost-Center… Here’s Why

Customer support is a cost-center – unless you’re purposefully working to make sure it’s not.

There have been many, many articles published recently about how customer service is no longer a cost-center.

But I’m here to burst the bubble. In most cases, your customer service team is probably a drain on your resources.

It’s a self-fulfilling prophecy. If you treat your CS team like a cost-center, they will stay a cost-center. By cutting corners, not investing in the team and emphasizing efficiency over quality, you’re destined to continue burning money.

Simply realizing that customer service can be a valuable driver of revenue is not enough to change your department from a cost-center. Instead, you need to take action to become a growth center.

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You’re not focussing on growth

If you treat your team like queue monkeys and only focus on how quickly they can get through the inbox, you’re missing a big opportunity. Great customer support agents have the skill to increase product adoption and drive revenue.

Empowering your customer support agents to help customers reach their full potential (in whichever way possible) drives growth.

There are two main ways that customer support teams can do this:

First of all, start by focusing on customer engagement metrics, not queue-crushing metrics. While efficiency is important, you can have a bigger impact on converting customers to long-time advocates when your customer support team focuses on giving the customer everything they need.

Second of all, consider implementing proactive customer service. When you move from reactive support to proactive support, your customer service team becomes trusted advisors, rather than firefighters. They can effectively make suggestions, offer value and provide customers with help that’s an “add-on” to the experience, rather than a necessary conversation.

Both of these strategies depend on finding time outside of the queue. As Mo McKibben of Help Scout says, “when your support team is freed up to spend 40% of their time on activities that drive the business forward, the entire funnel becomes more efficient.” The next three strategies are all aimed at helping your team find those moments of time to engage customers meaningfully.

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You’re not taking advantage of new technology

There are so many new tools popping up for customer support teams in the last few years. Many of them make teams more efficient at their job. If you’re not using the latest technology, you’re like an accountant working with an abacus instead of a spreadsheet. You might get the right answer in the end – but it’s going to take you (and your customer) a lot longer to get there.

Here are three categories of tools that you should take advantage of:

A Help Center with Advanced Search

Every question your customer can find their own answer to is one less ticket your customer service team has to answer. Not only is a great Help Center cost-effective, but customers also love being able to find their own answers.

But the key to getting value from your help center is to keep it well organized and to improve the search functionality. Customers need to be able to easily find what they are looking for. Consider implementing one of the following tools to help power up your help center:

  • Algolia
  • Solvvy

In addition to using the right tools, make sure you’re constantly checking on your analytics. If customers are searching and not finding the right article, you’ll need to make updates.

Chatbots or Agent Assistants

I completely understand the hesitation to deploy a chatbot. When used incorrectly they are rarely helpful, frustrating for customers who need to talk to an agent, and often make the situation worse, instead of better.

However, some AI assistants are extremely good at dealing with repetitive questions. If your customers frequently need updates on tasks like shipping and delivery, bank transactions or reports, a chatbot can help reduce the strain on your human support team.

The other alternative is to use an agent-side assistant. These tools help agents by suggesting a likely macro or solution in the help desk. The agent can then choose the right solution, personalize it as needed and send it to the customer. Not only does it help with consistency, but it also reduces the time your agents spend searching and typing up answers. A few tools to look into are:

AI-Powered Insight Tools

If you are a team of one or two agents, you likely have a good idea of what your customers are asking. If your team has grown beyond 10 agents, it’s really difficult to get a good understanding of trends within your customer conversations.

Rather than trying to manually filter through ticket tags and feedback, consider trying an AI-powered insight tool. They can crunch through a variety of data including NPS, raw text data and customer service tags to provide actionable insight. Not only does this save you time, but it also provides an enormous amount of business intelligence data to help your company grow. If you’re considering implementing AI, check out the following tools:

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You’re not scaling effectively

Not all customers necessarily need to be treated equally. If you have both free and enterprise users to support, it’s usually foolhardy to offer them the same level of service.

Calculate the cost per contact (CPC) for each customer service channel. Then, consider how frequently each type of customer contacts you. Are you spending more money supporting customers that don’t pay you?

That might not be a bad thing, if your customers tend to upgrade from a free account to an enterprise account over time. Great service might encourage customers to pay for more features. However, this only works if customers do upgrade, and you have a clear upgrade flow.

The important thing is to think about it and do the calculations. If you don’t know how much it’s costing you to support each of your customers, you’re not managing your customer service strategy effectively.

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You’re not feeding insights back to product

One of the most effective ways to reduce the cost of serving customers is to eliminate the root cause of problems.

Imagine that several customers were running into the same issue with exporting reports. Your customer service team could easily respond to each one, give them the workaround and get positive satisfaction surveys returned. However, if you passed on this information to the product team, they could fix the issue and everyone would be happier. Working with the product team to fix the root cause, instead of answering the same questions over and over again has several benefits, including:

  • Customers are more likely to stick around if the product improves.
  • Fewer issues in the product mean fewer customer service tickets.
  • Less time answering customer questions means more time to do high-value tasks.

If your team isn’t collecting and passing insights to the product team (or if your product team isn’t listening), you aren’t using your resources effectively. It’s like mopping the floor without turning off the tap that’s overflowing. You feel like you’re busy, but you aren’t getting anything done.

Conclusion

Customer support is a cost-center – unless you’re purposefully working to make sure it’s not. By reducing the overall costs of supporting your customers and increasing the overall revenue generated, you can move from a cost-center to a revenue driver.


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Sarah Chambers Sarah Chambers

Sarah Chambers is a Customer Support Consultant and Content Creator from Vancouver, Canada. When she’s not arguing about customer service, she’s usually outdoors rock climbing or snowboarding. Follow her on Twitter @sarahleeyoga to keep up with her adventures.

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