Top 12 Call Center Cost Reduction Strategies That Work

Starting a call center business is undoubtedly exciting, but costs can quickly spiral out of control. Between hiring staff, acquiring equipment, and maintaining operations, it's easy to see how expenses pile up. However, with the right strategies, you can reduce call center costs significantly while building a high-performing team.

So, let's break down the costs of starting a call center and reveal all the actionable strategies to optimize efficiency and save money.

Part 1. How Much Does it Cost to Set up a Call Center?

The exact cost of setting up a call center depends on the location. But here's a quick breakdown of all the factors that determine pricing, with a focus on call center cost reduction to optimize expenses.

1. Hardware Costs

Hardware costs include all the essential equipment like headsets, computers, servers, telephony systems, and a reliable workstation for every agent. You can expect each workstation to cost you around $2,000-$4,000; though it can vary significantly depending on the area you live in.

2. Software Costs

A call center requires various tools for proper running, like CRMs, VoIP systems, Workforce management (WFM) software, Automatic call distribution (ACD) software, and more depending on the requirements of the call centers. The software costs are generally dependent on the capacity and features you need, but it usually ranges from $500-$5,000.

3. Training Costs

Training agents is essential to ensure they deliver quality services. Therefore, you should launch proper training programs that are focused on skills and product knowledge. The training should be ongoing to keep employees updated on best practices and it helps achieve call center cost reduction in the long run. Initial training expenses for each agent are typically around $1,000.

4. Maintenance Costs

The ongoing maintenance costs are usually 15%-20% of total hardware and software expenses annually. This includes IT support and upgrades to ensure uninterrupted operations.

Part 2. 12 Call Center Cost Reduction Strategies

Since multiple factors affect the operations of a call center, it's essential to target all the aspects and devise strategies that would really hit the target.

Here are the top 12 call center service cost-savings strategies you should focus on:

1. Adopt Automation and AI

If there's a thing that has proven to be a game changer for all call centers, it's automation and AI. Tools such as IVR systems and AI assistants can handle routine inquiries and resolve [70%] of complaints without human involvement. Utilizing automation this way really helps with call center cost reduction.

Source: Teneo.Ai

Similarly, automation can help streamline things like follow-up emails and first responses so employees can focus on tasks that truly matter, like handling important calls.

Automation, particularly through AI, has significantly sped up resolution times through smart call routing and real-time support for agents during calls. That said, it reduces Average Handling Time (AHT) and improves First Call Resolution (FCR).

Such a performance results in better customer satisfaction and comes down to a reduced operational cost.

2. Optimize Workforce Management

The main goal to optimize the workforce is to improve the performance of the call center team to have better productivity and maintain service. It basically involves employing the right people for the right job. Companies can really reduce labor costs by 12% with an effective workforce management solution in hand.

Workforce Management (WFM) software is just the perfect solution to efficiently schedule agents and reduce call center costs. The software predicts call volumes and ensures the right number of agents are available at the right time.

3. Use Omnichannel Communication Platforms

An omnichannel approach gathers multiple communication channels like email, SMS, phone, social media, etc. into one platform. As this approach consolidates tools, businesses don't have to pay for separate software for each channel, resulting in call center cost savings.

Having all the channels in a single dashboard saves a lot of time and provides consistent customer service. And since 76% of customers expect consistent interactions across different departments, it's great to have the right solution for your enterprise.

Source: Exploding Topics

EngageLab is a great example as it offers bulk SMS, emails, and push notifications that centralize all communication in one place. This significantly helps cut down on agent training time and software expenses.

4. Provide Thorough Training

Proper training can reduce Average Handling Time to a great extent. And who can resolve customer issues faster than a well-trained and confident agent?

With proper training covering both soft skills and technical skills, including role-playing scenarios and regular refreshers, you can ensure the agents are prepared for any situation.

That said, agents become capable of handling a wider range of issues, so they are less likely to transfer calls unnecessarily. As a result, you can ensure better call center service cost savings.

5. Use Self-Service Support

The self-service option is by far the best call center cost reduction strategy, as it empowers customers to solve their problems without contacting a customer support agent. The best examples of self-service support are FAQs, knowledge bases, and AI chatbots.

Source: Tidio

And since 67% of customers prefer self-service rather than speaking to a support agent, it is a good idea to invest in developing resources that help customers in the long run. Such resources reduce call volumes and save time for the agents.

This makes a lot of sense, as implementing a chatbot costs much less than hiring additional agents to manage the same workload.

6. Optimize Call Routing

Manual call routing seems to be a good option initially, but it doesn't remain practical with the increasing call volumes. That is why you need to have an efficient yet cost-effective automated call routing system to connect the customers with the right agent.

Most modern systems use skill-based routing as a part of call center cost-reduction strategies. These systems direct calls to agents that are best equipped to handle specific issues. For instance, a query about billing goes straight to a billing expert.

This way, a call center can greatly reduce agent workload and operational expenses. And customers are happier, too, as they have to spend less time on hold or being juggled. Truly a win-win!

7. Negotiate with Vendors

You might be surprised by how much you can save just by renegotiating contracts with vendors unless you actually do it.

This is particularly true for cases like software providers, equipment suppliers, and telecom companies, as they usually offer discounts for long-term agreements. This strategy really helps with call center cost reduction by lowering operational expenses.

In most cases, you can make the most out of your loyalty or even explore alternative vendors to get better deals. That's because many vendors are open to revising terms, even if it means adjusting prices, offering discounts, or extending payment deadlines to retain your business.

8. Continuously Improve Call Quality

Another call center cost savings strategy is to continuously monitor and improve call quality. This is necessary to find inefficiencies that are the real victims behind increasing costs. Recording calls and analyzing them helps find out common issues like missed resolutions and long handling times.

Enterprises can use analytics tools to refine scripts, train agents in a better way, and reduce Average Handling Time (AHT). A study by the SQM group shows that improving FCR by 1% can reduce operating costs by 1%.

With such regular performance reviews, you can ensure the agents are delivering high-quality service consistently. Even if there's some lacking, managers can overcome it right away before it turns into a bigger problem, hence resulting in call center cost reduction.

9. Move to Cloud-Based Solutions

Instead of relying on the expensive on-premise systems, move to more affordable alternatives like cloud-based solutions. Using this as a part of call center cost reduction strategies, you can save up to 20%.

What's more? They are flexible, so you can scale up or down easily depending on your call volume. And since security and updates are managed completely by service providers, you can save on IT expenses, too.

10. Set Up a Remote Team

According to a Global Workplace Analytics report, companies can save an average of $11,000 annually per remote employee. These savings come from reduced overhead and lower attrition rates, as remote work improves job satisfaction.

In fact, 87% show a positive response to remote work methods, as they offer more flexibility and freedom to employees. In fact, 63% of employees believe they are more productive working remotely compared to an office environment. So, instead of maintaining a physical workspace, agents can easily work from the comfort of their homes using cloud-based systems.

Source: Biteable

Do you know the best part about a remote team? You can hire from a broader talent pool, potentially in regions with lower labor costs.

11. Outsource Non-Core Functions

There's no harm in outsourcing repetitive or specialized tasks to external providers. In fact, in many cases, they help with call center cost reduction, as outsourcing to regions with lower labor costs can reduce expenses.

After outsourcing, you will need to maintain quality and choose the right provider to run a successful call center business.

12. Streamline Operations with Customer Engagement Platform

Simplifying call center operations is key to reducing costs and maintaining efficiency. A unified customer engagement platform EngageLab integrates multiple communication channels—such as SMS, email, and push notifications—into a single system, eliminating the need for separate tools and reducing software expenses.

By centralizing communications, businesses can streamline workflows, reduce agent training time, and ensure consistent service quality across all channels. This approach not only lowers operational costs but also improves the overall customer experience, making it a strategic move for long-term success.

Conclusion: Achieve Cost Reduction Without Compromising Service Quality

Reducing call center costs doesn't mean sacrificing service quality. By incorporating strategies like AI agents, self-service options, and workflow automation, businesses can handle customer inquiries more efficiently while reducing operational expenses.

With solutions like GPTBots.ai, you can customize AI agents to streamline repetitive tasks, optimize call routing, and enhance customer satisfaction. Start exploring how intelligent automation can transform your call center operations and drive sustainable cost savings.

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