Customer support departments are expensive mainly because they grow proportionately with a company, so companies have to hire more staff as their client base increases. Learn how business texting can help you lower your costs while maintaining good customer service.
Customer support departments tend to have a bad reputation for being expensive for businesses and stressful work environments. So, why do companies put such an emphasis on running one then?
When done correctly and with the right tools, customer support departments have the potential to be a revenue-generating and collaborative work environment. One of the tools that help support departments achieve this sweet spot is business texting software. A texting software like Textline can improve support team metrics to transform call departments into revenue departments without sacrificing employee happiness. We’ll break down the math to show you the difference between using texting software and operating a support team without one.
The cost of operating a customer support team
Human resources are the number one expense for customer support. No matter how good a customer support agent is at their job, they have a limit to how many customers they can handle because they’re people and not machines. As the number of customer conversations shoots up across an increasing number of channels, companies increase their staff sizes. Forty-six percent of global contact center decision-makers project a five to ten percent growth in the next year. So, there’s no way around hiring more agents when your business grows because you have to scale proportionately to meet demand. Here are some specific costs associated with growing your team.
Poor SLAs and slow response times
Each customer support agent is responsible for sticking to the company’s service-level agreements, also known as SLAs. These SLAs determine the time it should take for a customer to receive help and how long it should take to resolve those open tickets. Though SLAs vary by company and the communication channel, customers expect prompt service.
For example, customers expect a response to a live chat message within 45 seconds, whereas other mediums like social media have an average accepted response time of nine hours. Another study found that three-quarters of online customers expect help within five minutes. Slow response times can cause your business to lose customers; research shows that U.S. businesses lose $62 billion annually due to poor customer service.
High turnover in the department
Customer support departments struggle with an incredibly high turnover rate. According to Quality Assurance and Training Connection, the turnover rate for call centers is 30 to 45 percent. Turnover in the industry is likely linked to the stress of dealing with angry customers on the phone in a role that offers minimal career growth for most employees. Because of the high turnover, there is a need to constantly hire and train new employees, increasing the costs of operating a customer support team.
So, how do customer support teams reduce their costs?
One way to reduce costs is to make your teams more efficient. Business texting is a great tool to help customer support teams increase their productivity without sacrificing employee or customer happiness.
Let’s break down the real savings business texting can help your customer support department achieve.
Increase efficiency to reduce costs
Every support agent has a limit to the number of customers they can assist within an hour. Depending on the medium, resolving a conversation can take somewhere between a few minutes to hours. One of the most common communication tools used in customer support is phone calls. Though phone calls serve a specific purpose and can be helpful, they can also be time-consuming, and time is money. To illustrate this expense, let’s take a look at the cost per contact when using phone calls to communicate with customers.
Imagine you’re a clothing brand that has 500 phone support inquires per hour, and each agent can handle 10 calls per hour.
500 inquiries per hour (phone) / 10 calls per agent = Need for 50 agents per hour
To increase efficiency, the company transitions 40 percent of its calls to text messages.
500 inquiries per hour x 60 percent (phone) = 300 inquiries per hour (phone)
300 inquiries per hour (phone) / 10 calls per agent = 30 agents per hour (phone)
Business texting allows support agents to handle multiple conversations simultaneously, unlike a phone call where an agent is tied to helping one customer at a time. Texting has a response time of 45 seconds, and it’s the perfect tool for rapid back-and-forth communication. Support agents can also send photos or links to help resolve a conversation faster.
For this example, let’s say a support agent can handle 40 texts per hour.
500 inquiries per hour x 40 percent (texting) = 200 inquiries per hour (texting)
200 inquiries per hour (texting) / 40 texts per agent = 5 agents per hour (texting)
Compared to phone calls, you need fewer support agents to handle text messages since they can handle more inquires through text than phone calls. To recap, if you divert 40 percent of your communication to texting, then you’ll only need to staff 35 agents vs. 50 agents. If the average employee in your customer support department makes $40,000 per year, then you’ll end up saving $600,000.
50 agents x $40,000 salary per agent = $2,000,000 department cost
35 agents x $40,000 = $1,400,000 department cost
$2,000,000 (department cost w/o texting) - $1,400,000 (department cost w/ texting) = $600,000 in savings
Reduce employee turnover rates
The employee turnover rate is high for customer support teams. Most support agents in their early twenties to their mid-thirties don’t stay in a customer support role for longer than a year, driving up expenses in the department. According to Bersin by Deloitte, it costs an average of $4,000 to hire new agents, so having to pay that price often quickly adds up.
Let’s say you’re running a customer support department with 100 representatives a year, and the average tenure for each employee is 18 months. Over three years, you’ll need to hire 200 more reps.
36 months (3 years) / 18 month average tenure x 100 employees a year = 200 new hires
$4,000 new hire training costs x 200 representatives = $800,000 in new hire training costs
Creating a better work environment by reducing the high pressure and stress of working in a customer support role is your best bet at retaining employees. Business texting can help you create this environment because it allows customer support agents to offer real-time support at their discretion. Meaning, they can quickly respond if they have an answer to a customer inquiry, or they can shoot a quick text letting the customer know they’re looking into the issue but need more time. The ability to manage their time without upsetting a customer lessens the pressure support agents feel, especially when they’re feeling overloaded with requests and need to buy more time while setting proper expectations.
For this example, adding texting to the customer support department increases tenure by 50 percent or 27 months. Increasing tenure by 50 percent would mean that you need to hire fewer new employees, specifically 133.
36 months (3 years) / 27 month average tenure x 100 employees a year = 133 new hires
$4,000 new hire training costs x 133 representatives = $532,000 in new hire training costs
$800,000 new hire training costs (w/o texting) - $532,000 new hiring training costs (w/ texting) = $268,000 in savings
Customer experience and the employee experience go hand-in-hand. With business texting, not only are support agents happier, but customers are, too, since they’re receiving help in a low-touch way that is personal. Happier agents will provide better support to your customers because they genuinely enjoy what they do, and that comes full circle. Studies show that companies that make a concerted effort to improve their customer experience also see employee engagement rates go up by an average of 20 percent. More engaged employees mean they’re likelier to stick around longer, and you won’t have to hire new employees as often.
The bottom line
Human resources are the most considerable expense for customer support teams, and the only way to account for the cost is to increase efficiency. Business texting can help support teams resolve tickets faster and reduce their overhead costs without sacrificing customer experience. The less stressful work environment that texting creates makes for a better employee experience, significantly reducing turnover in customer support departments.