What's the ROI of Your Customer Service Center?

It’s relatively easy to see how bad service affects revenue. When customers don’t get the support and care they are looking for, they have no qualms about taking their business elsewhere and leaving poor reviews. But while good customer service is a critical business practice, it’s much harder to see exactly how much a company’s efforts are paying off. Knowing the ROI of your customer service center is important to setting strategic business goals, but how do you even begin to calculate it?

Why ROI is Important

Customer service centers are, traditionally, not considered profit centers. Knowing this, some businesses choose to neglect their customer service and can end up damaging their sales, while others invest resources into great service without strategy, simply because they believe it will pay off. Like any business investment, however, having a quality customer service center requires planning and careful consideration. If you're thinking about investing more into your call center, like upgrading communications technology or your phone system, it's critical to know its current ROI.

Calculating ROI

There are two figures you need to calculate call center ROI, and one is easier to find that the other:

  1. The money invested into your customer service center
  2. The amount earned from your customer service center

How much you’re investing shouldn’t be too hard to find or calculate, but be sure to include everything in the service center that costs money. Employee wages and benefits, technology, furniture, office space, and more could be included in this figure, depending on your business.

The real question is how to determine how much your customer service center brings in. While customer service representatives don't work with aquiring new customers, they do impact business revenue.

  • Retention: Customer service representatives deal with unhappy customers. Reps handle requests that result in revenue loss, such as service cancellation or product refunds. With good service, however, it’s possible to “save” those customers and retain their business. Often, what helps the most with customer satisfaction is the little things, like being able to reach the right person on the phone without hassle due to efficient call routing. Because attracting a new customer is so much more expensive than retaining an existing one, great customer service saves the business money.
  • Upgrade: Great customer service reps can take retention one step further. Say a customer was upset with their service because they’re not receiving everything they expected. A great rep, with the right knowledge, technology, and easy lines of communication to necessary people within the company, can not only address that customer's complaints, but also upsell that customer. With the right skills and tools, they can actually act as a salesperson while keeping an existing customer happy.
  • Expansion: Customers react to great service, and after a good experience with a customer service center, they are more likely to tell others about a company that they trust to do business with. A study from the Wharton School of Business found that for businesses with great customer relationships, referral customers are easier to acquire and retain than those found through advertising.

Finding the two numbers is, thankfully, the hard part. Then, simply subtract the money spent from the money gained, divide by money spent, and multiply that by 100 for your call center ROI. Armed with this knowledge, you can strategize on how to best utilize customer service in your company, like investing more into upgraded communication systems or more personel. Even though the revenue earned from a call center may not be as visible as it is from sales, quality customer service can provably boost your business.

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