For many companies, their call centers are one of the biggest cost centers of the business. If you have a large customer base that wants to get in touch with your customer support, sales, accounts payable, or other departments, you pretty much need to have a call center or contact center.

But operating a call center comes with significant expenses from staffing to software to real estate. So, how can you optimize these costs and implement strategies to increase savings—without compromising service quality?

Below, we’ll explore actionable tips for effective call center cost management, along with examples of tools that can help control costs, and more.

Call center cost breakdown

No matter what industry you’re in, there are some core call center expenses that are almost universally applicable. Here’s a quick breakdown of the most common costs:

• Labor: This includes salaries, benefits, and training for your agents and supervisors.

• Technology: This includes expenses for your call center software, hardware, and network infrastructure.

• Facilities: If you have office space, you’ll need to consider lease costs, utilities, and maintenance.

• Overhead: These are other administrative expenses, management, and miscellaneous indirect costs.

(For a detailed breakdown, check out this comprehensive guide on call center costs.)

How to calculate cost per call in a call center

Calculating your cost per call is an essential step in identifying potential savings.

This metric is calculated by dividing your total call center expenses by the total number of calls handled during a specific time period. It allows you to track the efficiency of your operations and make data-backed decisions when you’re looking to reduce costs.

Here is the formula for calculating cost per call:

Cost per call = Total operational costs / Total number of calls handled

If you operate a contact center that handles not just voice calls but also social media and live chat messages, you can easily adapt this formula for those other channels.

Call center cost management challenges

Managing call center costs isn’t just about cutting costs though—you have to find the right balance between saving money and providing a good customer experience.

To effectively manage call center costs, leaders have to navigate several key challenges including:

• Balancing staffing levels: Overstaffing leads to unnecessary labor costs, while understaffing can cause burnout and decreased customer satisfaction.

• Avoiding underinvestment in technology: While it might be tempting to try to cut costs by neglecting technology upgrades, this is rarely a good long-term solution because it can quickly lead to inefficiencies and higher expenses in the long run.

• Maintaining the quality of your training programs: Reducing investment in agent training is another popular area where business leaders try to cut expenses, but this can result in poor agent performance (because they’re being set up to fail)—which leads to increased turnover and again, a poor customer experience.

Vinay Gupta, a senior knowledge expert from McKinsey, describes the challenges of balancing the need to control costs while hitting target metrics and KPIs: “If you’re trying to get to a very low average speed of answer, then what might happen is, as an organization, you might need to staff a lot of people, and hence costs will go up,” he says.

“Conversely, if you have a very high average speed of answer, then what it means is you might have a customer waiting for multiple minutes, which is always a bad experience for the customer. There is no single average speed of answer. Every call type is different. And for each call type, you might have different targets for average speed of answer.”

Instead of just cutting corners, businesses should focus on strategic cost-saving measures that improve efficiency while empowering your team to deliver high-quality customer service.

For example, investing in areas with high ROI, such as Ai-powered solutions, is one way to enhance efficiency and reduce costs. This is a big reason why so many companies are implementing Ai-driven chatbots to answer routine questions and even help customers self-serve when it comes to tasks like paying bills.

8 tips for call center cost savings

Now, let’s look at practical strategies you can implement to start reducing call center costs.

1. Invest in agent training

One of the most impactful ways to reduce call center costs in the long term is by investing in comprehensive and up-to-date agent training.

Well-trained agents can handle more complex inquiries in less time, reduce call volume, and ultimately provide better service, which leads to higher customer satisfaction and retention. In fact, Gartner has coined the term “rep enablement” to highlight how important it is to equip contact center reps to manage customers’ constantly rising expectations.

There are many ways to boost your agents’ technical skills (like using CRM tools) and soft skills (like handling customer frustration). From a technical perspective, equipping them with the right tools can go a long way in helping them ramp up quickly.

Dialpad Support, for example, has Ai coaching features like Ai Assistant, which automatically searches and pulls up relevant information for agents when tricky topics come up during conversations with customers:

2. Use Ai and automation to handle routine inquiries

One of the highest ROI areas for cost savings is Ai-driven automation. Gartner has predicted that by 2026, conversational Ai will reduce contact center costs by $80 billion—and you don’t have to fully automate everything in a call center to see those benefits either.

“While automating a full interaction—also known as call containment or deflection—corresponds to significant cost savings, there is also value in partial containment, such as automating the identification of a customer's name, policy number and reason for calling,” says Daniel O’Connell, VP analyst at Gartner. 

“Capturing this information using Ai could reduce up to a third of the interaction time that would typically be supported by a human agent.”

On a basic level, you can free up your agents to handle more complex questions just by automating repetitive tasks such as call routing, basic FAQs, and ticket management. 

Leveraging Ai-powered customer communications platforms like Dialpad Support not only increases operational efficiency, but also improves your customer experience by offering instant responses and reducing wait times.

Dialpad’s conversational Ai Agent, for example, is easy to set up in just a few clicks from your dashboard—just use the drag-and-drop builder to put together different task flows for customers chatting through your website or social messaging channels:

3. Implement omnichannel support

With customers engaging through more channels than ever before (e.g., email, live chat, social media), taking an omnichannel approach will help your contact center agents manage these disparate interactions more efficiently. 

Traditionally, contact center teams would have to constantly toggle back and forth between applications to handle conversations on different channels. But today, omnichannel contact center platforms let you integrate all voice and digital channels into a single pane of glass, which helps agents streamline workflows, contain interactions more effectively, and ensure that customers receive consistent, high-quality support no matter if they’re reaching out to you on your website or over the phone.

From a cost perspective, it’s less expensive to pay for fewer applications—and there’s also the time and effort required to manage multiple tools in a bloated tech stack compared to one solution that consolidates all customer interactions in one place.

4. Optimize scheduling with workforce management software

Efficient scheduling helps ensure that you have the right number of agents available at peak times, without overstaffing during quiet periods. 

Workforce management (WFM) software can help you predict call volumes based on historical data, helping managers make smarter scheduling decisions. This prevents wasted labor costs and improves agent morale by ensuring they’re not overwhelmed or underutilized.

For example, solutions like Dialpad Support come with WFM features that let call center teams:

• Accurately forecast call volumes based on past trends, seasonal fluctuations, and real-time demand.

• Automate shift scheduling to ensure adequate coverage without excessive overtime costs:

• Monitor agent adherence to ensure employees follow their assigned schedules, reducing productivity loss.

• Enable flexible staffing with features like self-scheduling, which empower agents to switch shifts and communicate with schedulers while maintaining operational efficiency.

For example, if your data shows that Mondays tend to have a higher call volume after a weekend of customer issues accumulating, a good WFM solution can proactively schedule more agents during those peak hours and scale down staffing later in the week when call volume drops. This ensures optimal resource allocation and minimizes wasted labor costs while still maintaining service quality.

More advanced WFM platforms also integrate with or have built-in Ai-powered tools to make these real-time adjustments. For instance, if an unexpected surge in calls occurs due to a product outage, Ai can dynamically adjust staffing recommendations and even trigger automated notifications for backup agents to log in.

When it comes to reducing call center costs, implementing WFM software is an essential step because it plays a key role across multiple areas including optimizing workforce scheduling, minimizing inefficient staffing and understaffing, streamlining shift management, and more.

5. Shift to a cloud-based call center platform

The biggest cost-related reason to move to a cloud-based call center platform is because it eliminates the need for costly on-premises infrastructure. Traditional on-prem systems require significant investment in hardware, maintenance, and IT support, whereas cloud solutions pretty much eliminate these expenses by offering a fully hosted digital service. 

With a cloud-based solution, your team can access all the tools and data they need remotely, adjust staffing levels, and pay only for the licenses you need without the overhead associated with maintaining physical servers and equipment. 

Dialpad Support, for example, can be set up virtually from an online dashboard—and if you need to add or remove users to accommodate busy or slow periods, you can do that too with just a few clicks:

Many cloud contact center providers also offer built-in disaster recovery and automatic product updates to minimize downtime and IT costs for their customers, which ensures uninterrupted service and long-term savings since you don’t have to devote internal resources to maintaining the system.

6. Provide self-service solutions

Empowering customers to resolve issues on their own can reduce call volume and free up agents to handle more complex inquiries. 

Modern Ai-powered self-service tools—like intelligent chatbots, virtual assistants, and advanced interactive voice response (IVR) systems—give customers more options for quickly finding answers to common questions without needing to speak with a live agent. 

Unlike traditional static FAQs or basic IVR menus, Ai self-service solutions use natural language processing (NLP) and machine learning to understand a variety of customer intents, provide personalized responses, and can even guide users through troubleshooting steps. 

For example, an Ai-powered chatbot can instantly assist customers with order tracking, password resets, or policy inquiries, without the need for human intervention:

Ai chatbots aren’t just for customer-facing channels either. You could also use conversational Ai to help contact center agents answer customer questions in real time. For example, Dialpad Ai is trained on over seven billion minutes of business conversations and can automatically search all of your company’s connected knowledge sources (including PDFs, decks, and even unstructured data like past customer conversations) to pull information that an agent might need to answer a tricky customer question. 

By integrating these Ai solutions into a comprehensive self-service strategy, contact centers in every industry can lower operational costs, reduce agent workloads, and provide faster, more convenient support experiences for customers.

7. Optimize call routing

Inefficient call routing leads to longer handle times, repeat calls, and frustrated customers—all of which increase operational costs. 

Having a good call routing strategy will give your customers the most efficient paths to the agents or departments who can solve their issues, which reduces hold times and manual work needed to transfer customers back and forth.

Ultimately, this shortens resolution times and average call handle times, and improves customer satisfaction while lowering operational costs.

8. Use conversation intelligence

Ai-powered conversation intelligence tools are incredibly powerful, both from a strategic and a cost efficiency perspective, because of the breadth of insights you can uncover just from analyzing customer interactions.

For example, tools like Dialpad Ai can detect the sentiment of a conversation, identify common pain points that keep coming up in sales or support calls, and uncover recurring issues that drive up call volume. 

By leveraging these insights, managers can refine call scripts, develop more effective self-service options, adjust training programs to address knowledge gaps—and even provide recommendations back to the Product team based on customer feedback—all of which ultimately reduce average handle times and improve resolution rates.

Just as importantly, conversation intelligence can also streamline compliance monitoring, automatically flagging potential regulatory risks or problematic interactions before they lead to fines or legal complications. 

For example, Ai can detect when agents omit required disclosures or fail to follow mandated scripts, allowing managers to provide corrective action proactively and addressing related inefficiencies that drive up expenses.

Looking for call center cost savings?

Reducing call center costs isn’t a one-off project where you cut costs indiscriminately—it’s an ongoing process that requires attention to detail, long-term strategy, and sometimes, the willingness to spend a little up front to achieve exponential savings later on. 

By implementing the strategies we outlined earlier, such as optimizing staffing levels and leveraging Ai and cloud-based solutions, you can help your call center achieve significant savings without compromising your service standards.

If you’re ready to start reducing your call center costs, why not check out an Ai-powered contact center solution like Dialpad Support that’s designed to empower your team with the tools they need to operate efficiently and cost-effectively?