Cost per Contact & Resolution Efficiency for High-Performance Support

 

1. Cost per Contact

Definition:
Cost per Contact is the total annual operating expense of the customer support center divided by the annual contact volume of the customer support center. Operating expenses include all employee salaries, overtime pay, benefits, and incentive compensation, plus all contractor, facilities, telecom, desktop computing, software licensing, training, travel, office supplies, and miscellaneous expenses. Contact volume includes contacts from all channels: call, chat, chatbot, email, walk-in, AI support, etc.

Why it’s important:
This metric helps you understand how efficiently your Customer Support Center conducts its business. If your Cost per Contact is higher than the industry average, it is not necessarily a bad thing, particularly if you maintain higher-than-average quality levels, such as a good Customer Satisfaction Score and meeting service level targets. Conversely, if your Cost per Contact is low, it does not necessarily mean it is good, particularly if the low cost is achieved by sacrificing the Customer Satisfaction Score, Call Quality, or Service Levels. Every Customer Support Center should track and trend Cost per Contact on a monthly basis and measure it month-on-month.

Example:

A SaaS company, CloudHelp, has the following details:

• Annual operating expenses: $2,000,000

• Annual contact volume: 200,000 interactions

Cost per Contact = 200,0000/200,000 = 10 USD per Contact

Let's assume the industry average Cost per Contact is $8 per interaction. However, CloudHelp maintains a CSAT score of 92%, significantly higher than the industry average of 85%. The higher cost is justified because of the superior quality of customer service provided, which leads to increased customer retention and satisfaction.

On the other hand, another support center, QuickFix, reports a Cost per Contact of $6 per interaction, which is below the industry average. However, their CSAT score is 70%, and they frequently miss service-level targets, indicating that their low cost comes at the expense of service quality.

This comparison highlights that Cost per Contact alone does not determine efficiency. Instead, it should be correlated with quality metrics like CSAT and Service Levels to provide meaningful insights.

2. Net Level 1 Resolution Rate

Definition:
Net Level 1 Resolution Rate is the number of support cases resolved by the Level 1 Support Team divided by the number of support cases that could potentially be resolved by the Level 1 Support Team. Support cases escalated to other support levels (e.g., Level 2, Level 3, or field support) are not counted under this metric. Cases that cannot be resolved at Level 1, such as hardware failures or software bugs where resolution control lies outside the Level 1 Support Team, are excluded from the calculation.

Why it’s important:
Net Level 1 Resolution measures the overall competency of the Tier 1 Customer Support Team and serves as an essential factor in maintaining Total Cost of Ownership (TCO). A high Level 1 Resolution Rate minimizes TCO because cases resolved at Level 1 avoid the higher costs associated with escalations to more advanced support tiers (e.g., IT, Desktop Support, Vendor Support). The Customer Support Team can improve this metric through training and by investing in technologies such as remote diagnostic tools and knowledge-management systems & AI.

Example:

Let’s consider the following scenario for a SaaS company:

• The Level 1 team handles 1,000 cases per month.

• Out of these, 400 cases are escalated to Level 2 due to a lack of training or knowledge, even though they could have been resolved at Level 1.

• The cost to resolve a case at Level 2 is $5 per case.

Net Leve 1 Resolution Rate = Case resolved by Level 1/Total cases that could potentially be resolved at Level 1

If the Level 1 team resolves 600 cases, the Net Level 1 Resolution Rate is:

Net Leve 1 Resolution Rate = 600/1000 = 60%

Cost Implication:
If the 400 escalated cases could have been resolved at Level 1, the $2,000 additional cost (400 cases × $5) spent by Level 2 could have been saved.

Impact:
Improving the Net Level 1 Resolution Rate through better training and knowledge-management tools would allow more cases to be resolved at Level 1, saving costs and increasing efficiency. For instance, if 200 additional cases (50% of the escalated ones) were resolved at Level 1, the Net Level 1 Resolution Rate would rise to 80%, and $1,000 could be saved monthly.

This example highlights how Net Level 1 Resolution Rate directly impacts cost efficiency and the overall operational effectiveness of the support center.

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Why Support SOPs Are Important and How to Create One as a New Support Leader

 

Why Support SOPs Are Important and How to Create One as a New Support Leader

A Support Standard Operating Procedure (SOP) is the backbone of a successful support team, ensuring consistency, efficiency, and scalability. If you're a new support leader, understanding how to create and use SOPs is crucial for building a high-performing support center.

This guide will explain why SOPs matter, provide a step-by-step process for creating them, and offer examples to bring the concepts to life.

What Is a Support SOP?

A Support SOP is a structured document that outlines all the processes, workflows, policies, and tools required to operate a support center. It serves as a reference for the team, ensuring consistent delivery of service across various situations.

Key Sections of a Support SOP

1. Mission & Vision: Why the support center exists and its long-term objectives.

2. Technology Stack: Tools like Zendesk, Webex, or Redmine that facilitate support.

3. Process & SLAs: Standardized workflows for ticket handling, bug reporting, and more.

4. Metrics & Quality Assurance: Methods for evaluating team performance.

5. Performance Management: Incentive structures and evaluation processes.

6. Workforce Management: Guidelines for recruitment, training, and staff development.

1. Mission & Vision

Mission:

The mission of the support center is to provide reliable, timely, and empathetic customer support, enhancing customer satisfaction and fostering loyalty while addressing their concerns effectively.

Example:
“Our mission is to ensure every customer interaction is met with professionalism, accuracy, and care, aiming to resolve issues promptly and exceed customer expectations.”

Vision:

The vision focuses on the long-term objectives of the support center, such as becoming a benchmark in customer support within the industry.

Example:
“To establish ourselves as a globally recognized support center, achieving a consistent CSAT score of 95% and maintaining an average response time of less than 10 minutes by 2025.”

2. Technology Stack

The technology stack outlines the tools and platforms used to streamline and manage support operations.

Core Tools:

1. Zendesk Support: For ticket management and workflow automation.

• Use Case: Ticket categorization, prioritization, and assignment.

• Example: Automate SLA reminders for overdue tickets.

2. Zendesk Chat: To engage customers in real-time.

• Use Case: Instant issue resolution and proactive customer communication.

3. Zendesk Talk: For voice-based support.

• Use Case: Handling escalations or complex issues that require live communication.

4. Zendesk Guide: A knowledge base for both customers and internal agents.

• Use Case: Hosting FAQs, troubleshooting guides, and SOPs.

5. Redmine: For bug tracking and project management.

• Use Case: Logging customer-reported bugs with severity levels.

6. Webex: For team collaboration and live customer sessions.

• Use Case: Onboarding new customers via virtual training sessions.

7. Scorebuddy: A tool for evaluating agent performance.

• Use Case: Assessing call quality and providing actionable feedback.

3. Processes & SLAs

Processes and SLAs ensure standardized workflows and define the expectations for support delivery.

Key Processes:

1. Ticket Handling Workflow:

• Step 1: Categorize tickets (e.g., Technical Issue, Billing, Feedback).

• Step 2: Assign priority based on urgency.

• Step 3: Respond using pre-approved templates.

• Step 4: Escalate if unresolved within SLA.

2. Bug Reporting:

• Step 1: Log the bug in Redmine with a detailed description.

• Step 2: Assign it to the development team.

• Step 3: Update the customer on progress regularly.

3. Service-Level Agreements (SLAs):
   SLAs define expected response and resolution times.

4. Metrics & Quality Assurance

Metrics and quality assurance ensure the support team meets its performance goals while maintaining high service standards.

Key Metrics (KPIs):

1. CSAT (Customer Satisfaction Score):

• Measured through post-ticket surveys.

• Target: ≥ 95%.

2. First Contact Resolution (FCR):

• Percentage of tickets resolved without escalation.

• Target: ≥ 85%.

3. Average Handle Time (AHT):

• Time taken to resolve a ticket.

• Target: ≤ 15 minutes.

4. Ticket Backlog Rate:

• Percentage of unresolved tickets beyond SLA.

• Target: ≤ 5%.

Quality Assurance Programs:

• Weekly audits of random tickets to ensure SOP adherence.

• Customer feedback analysis to identify improvement areas.

5. Performance Management

Performance management systems encourage continuous improvement and reward exceptional efforts.

Incentive Structures:

1. Monthly Incentives:

• Agents meeting KPIs (e.g., CSAT ≥ 95%, AHT ≤ 15 minutes) receive a $100 bonus.

2. Quarterly Rewards:

• Top performers are recognized publicly with certificates and cash rewards.

Performance Review Process:

• Weekly: Case quality audit by team leaders.

• Monthly: Incentive eligibility review based on KPI performance.

• Quarterly: Comprehensive review for bonuses and promotions.

6. Workforce Management

Workforce management focuses on recruitment, training, and staff development to ensure team readiness.

Hiring Guidelines:

• Look for candidates with strong problem-solving skills and customer empathy.

• Include role-specific tests during the interview process (e.g., ticket triaging simulation).

Training Roadmap:

1. Week 1:

• Product Training 

2. Week 2:

• SOP and SLA deep dive.

3. Week 3:

• Shadow experienced agents and handle mock tickets.

4. Week 4:

• Live ticket handling under supervision.

Staff Development:

• Provide access to online learning platforms for skill enhancement.

• Host quarterly workshops on new tools or soft skills like de-escalation techniques.

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