Your Cost per Contact Service Desk Metric May Be Too High

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The Cost per Contact metric, also referred to as Cost per Call, measures the level of financial efficiency that your service desk delivers as it supports and provides help to customers.

What Is the Cost per Contact Definition?
In its simplest form, Cost per Contact is the total cost of operating the service desk divided by the number of calls it handles during a given time period. That period can be whatever is most useful to you: a week, a month, a quarter, or a year. As with any statistic, measuring over too short a period of time permits outliers to skew the measurement. For instance, measuring CPC for a single day on which call volume was unusually low would inflate CPC. Likewise, measuring over long periods such as a year effectively “washes out” most of the outlier values to give you a result that may not be as meaningful as, say, a monthly or quarterly measurement.

Many service desks measure Cost per Contact routinely each month. That frequency provides enough data to accumulate that extreme lows and highs are largely eliminated. It also facilitates trend studies over the course of a year, as well as year-to-year comparisons.

If you don’t know your service desk’s CPC metric, you’re missing a critical piece of information you need to manage effectively.

What Is the Cost per Contact Formula?
There are several ways to measure CPC. Beginning with the least sophisticated, you could say that…

If agents are paid an average of $20 per hour and they collectively take an average of 10 calls in a given period of time—say one hour—each call costs $2.00. However, this simple measurement ignores much of the capital and human capital expense involved in service desk operation.

A more useful measure of CPC includes the cost of equipment, IT support, management and supervisory personnel expenses, employee benefits, software licensing and maintenance contracts, facilities expense, and perhaps other costs unique to your situation. Therefore, a better calculation of CPC looks like this:

This is the formula service desks most often use for CPC when comparing their operation to that of other service desks or to industry benchmarks.

As always, “calls” refers to phone calls, service tickets, online support chats and any other channel of communication that’s relevant at your service desk. Further, the totals are understood to be tallied within a specific period of time. Therefore, you might calculate CPC for one month, using the monthly cost of operation and total calls during that month.

Impact of Poor Cost per Contact Scores
What is a “poor” CPC score? Consider these situations.

One service desk may have a manager and two supervisors overseeing twenty agents who work through a cloud-based service desk, sometimes known as CCaaS—Contact Center as a Service. In that mode the company avoids the cost of buying service desk equipment and software. Instead they lease it, thereby avoiding the usual costs of IT infrastructure and support, which is supplied by the cloud service company. Such a service desk could be expected to have a rather low CPC.

Another twenty-agent service desk might be top-heavy with a manager, two supervisors, and a robust IT department supporting it, all of which lead to a much higher CPC for a given call volume.

One cannot say whether either of these service desks is scoring “poorly.” They are using different business models. And, even beyond the matter of business models, salary and wages vary widely from one service desk to another as one moves from cities with high cost of living to other geographies.

However, trends that suggest CPC is out of line include these signals that inefficiencies are creeping into service desk operation.

– First Call Resolution metric is trending down.
– Average Speed to Answer is growing longer.
– Abandoned Call Rate is trending upward.
– Agent Utilization has trended sharply upward.
– Absenteeism and turnover are increasing.
– Customer Satisfaction scores are trending downward.

All of those metrics have an effect on Cost per Contact and can serve as early warnings that CPC needs your attention.

Customer satisfaction and cost of operation define how a service desk is measured. When customers are highly satisfied, their satisfaction transfers to their perception of the company or brand. And, when costs are contained without harming customer satisfaction, the service desk is eminently successful.

How to Monitor Cost per Contact
Service desk operation is a living event that changes from moment to moment. An approach taken with real-time metrics that consolidates information from many different technologies, even siloed systems, gives you the ability to manage proactively. Ideally, your Cost per Contact is easily available along with the other supporting metrics you need to manage the service desk. Using the right method gives you an in-the-moment early warning system to better manage efficiency and to enhance customer satisfaction.

This article was originally published on the RDT blog and was reprinted with permission.

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