Cost per Call

Abbreviation: CPC

Similar terms: Cost per Interaction factors email, chat, and social media interactions into the formula for accurate resource allocation to omnichannel services.

What is Cost per Call?

Cost per Call measures how much it costs to keep the call center operational in comparison to how many calls are handled in a given point of time.

CPC formula

Cost per Call = Total Costs / Total Number of Calls

Costs include

• Agent salaries
• Hiring and training costs
• Management
• Software licensing fees
• Hardware
• Rent
• Utilities
• And all other operational and overhead costs.

Outsourcing reduces costs per call by reducing operational costs and increasing call capacity.

Why Cost per Call matters

CPC can indicate the cost-efficiency of an internal or external call center, which informs key business decisions.

• Resource allocation: Cost per Call provides insight into budgeting and staffing needs. Analyzing CPC as volume fluctuates can help businesses maintain profit without over- or under-working employees.
• Operational setup: It can indicate when it is most cost-efficient to continue staffing internally or to outsource.
• Operational efficiency: Streamlined processes and agent assistance tools increase service capacity, reducing staffing costs and revealing the benefits of additional technology integration costs.
• Service standards: Effective resource allocation can shorten wait times and interactions without overwhelming agents, improving customer and agent experience as well as retention and loyalty.

Target range

A variety of factors influence Cost per Call, influencing target ranges. High-complexity issues can raise handle times and costs, while more routine requests are quick to complete, decreasing cost per call.

For low-complexity, high-volume inbound calls, expect to spend $2 to $4.50 per call.

More complex calls raise costs to $8 to $15+ per call.

Channel nuances

While Cost per Call determines the budget for calls received, focusing solely on phone interactions fails to take into account chat, email, and social media handling — the standard for many modern contact centers. This will lead to insufficient resource allocation, unrealistic expectations, and inefficient operations that will run your team and your budget dry.

Cost per Interaction includes all omnichannel interactions in your calculations.

Additionally, centers should track inbound vs. outbound costs to determine accurate resource allocation.

Factors that influence Cost per Call

Cost per Call takes into account all call center expenditures, meaning there are many opportunities to optimize efficiency and cost-effectiveness.

• Operational costs: Wages and benefits, overhead expenses, HR and recruiting, administration, rent, and utilities.
• Volume mix and seasonality: Various interaction types influence handling time and service capacity, while low demand raises cost per call.
• Staffing and training: High-performing agents balance quality with quantity to improve customer satisfaction and operational cost-effectiveness.
• Technology: Advanced and industry-specific call center software improves call handling with automated routing, automated issue handling, and live agent assistance.

How to improve Cost per Call

Tracking CPC can highlight opportunities to reduce costs, improve processes, and identify revenue-generating opportunities. Follow these important steps to maximize call center cost-effectiveness.

1. Account for all factors. 
   • Include all interaction types in total calls or interactions handled.
   • Optimize quality with efficiency.
2. Monitor key performance indicators. 
   • Service Level Agreement
   • Average Handle Time
   • First-Call Resolution rate
   • Customer Satisfaction and Net Promoter sores
   • Quality Assurance scores
3. Consider context.
   • Track costs monthly to identify trends and areas of improvement.
   • Allow room and time for improvement. Track the results of cost-saving efforts over time.
4. Set your team up for success.
   • Fix structural issues with appropriate tools and streamlined processes.
   • Utilize time-saving tools (automated handling of routine queries, self-service, automated call routing, automated interaction notes and summaries).
   • Leverage real-time insights and tips based on customer sentiment analytics and compliance monitoring.
5. Consider outsourcing.
   • High costs per call and overwhelming demand indicate it’s time to look for an outsourcing solution.
   • Outsourcing reduces staffing and overhead costs while ensuring high-quality performance that supports business growth.

Cost per Call limitations and compliance notes

Misusing or misinterpreting CPC can do a business more harm than good. These common pitfalls of Cost per Call can introduce more risks into your business strategy:

• Not counting all interaction types
• Favoring cost and handle time reduction over quality and customer experience
• Failing to invest in data privacy or regulatory compliance tools
• Under- or over-estimating costs
• Applying inaccurate benchmarks to service standards
• Disregarding contextual or seasonal needs

Outsourcing with an expert BPO provider addresses these factors with scalable, powerful solutions.

FAQs

What is Cost per Call?

Cost per Call is a contact center metric that shows how much it costs to handle calls, typically in a month. It takes into account all call center costs, such as agent salaries, technology, training, and overhead. 

How to determine Cost per Call?

First, gather all costs to run and maintain your call center in a month. Then tally up total calls or interactions handled in that month. Finally, use this formula to determine Cost per Call:

Cost per Call = Total Costs / Total Number of Calls

How to improve or reduce Cost per Call?

Improving CPC includes finding opportunities to reduce costs and increase efficiency. This can include increasing First-Call Resolution (reducing the amount of contacts), reducing training costs, optimizing call handling and routing, automating responses to routine queries, and even outsourcing support to dedicated agents.

What is a typical cost per call? 

Ideal Cost per Call benchmarks vary according to industry, business size, location, and issue complexity. Target Costs per Call for routine issues range between $2 and $4.50, with higher and more complex issues costing up to $8 to $15+ per call while creating value in customer experience and satisfaction.