Cost per Contact: A Customer Service KPI

Cost per Contact (CPC) is an important Key Performance Indicator (KPI) in the area of Customer Service KPIs. It calculates the average cost incurred for each customer interaction or contact. This could include phone calls, emails, live chat interactions, and more. A lower CPC usually indicates more efficient customer service operations.

Overview

In the spectrum of customer service, CPC provides valuable insight into the operational efficiency of your customer service department. It allows you to understand the financial implications of each customer interaction, helping you to identify opportunities for cost optimization.

A higher CPC might indicate issues such as inefficient processes, excessive contact volumes, or underutilization of cheaper contact methods like self-service or AI-assisted service. Conversely, a lower CPC could indicate efficient utilization of resources and cost-effective service delivery.

Calculating Cost per Contact

Cost per Contact is calculated by dividing the total operational expenses of a customer service department by the total number of customer contacts in a specific timeframe. The formula for CPC is:

Cost per Contact = Total Operational Expenses / Total Number of Customer Contacts

Explanation of the variables:

• Total Operational Expenses: This is the sum of all costs associated with running the customer service department, including salaries, overheads, technology costs, etc.
• Total Number of Customer Contacts: This is the total count of all customer interactions within the same timeframe.

By monitoring the Cost per Contact, organizations can identify inefficiencies and opportunities for cost savings, ultimately improving their bottom line while maintaining or even improving service quality.