Having been in Private Sectors Contact Centre for over 10 years, I’ve always had the luxury of a New Business Team who would calculate costs per contact and tender for business on that basis.
I am now in Public Sector & the Contact Centre has been established for a little over 2 years now, but with no realisation of cost per contact.
I am sure if our operation were moved into Private Sector we would not break even and therefore want to do a personal project to find out what our cost per transaction is.
Does anyone have any advice, or a formula they use for this purpose?
I have Inbound & Outbound calls, emails, scanning of faxes and I/B & O/B letters to cost.
Many Thanks in advance.
Question asked by Pamw79
First of all, measuring a “cost per contact” will not be very fair. I would advise you to measure cost per inbound call, per inbound call, per email and so on, and treat them separately.
When we calculate costs for benchmarking we always base cost related figures on the *total* costs (wages, rent, technology, everything) and then look at the proportion of resources spent on each contact method. This is easiest to do by breaking it down to “cost per FTE agent”.
You can for example take the number of FTE agents for inbound calls multiplied by “cost per FTE agent” to end up with the proportional cost for inbound calls. Divide this cost by number of inbound calls to find out your cost per incoming call… Repeat for o/b, emails and so on.
This strategy will take idle time and wrap-up time into account as well as all the hidden expenses.
Hope this helps! Feel free to post if you have any questions.
With thanks to Niklas
You will probably need to add in an amount for overheads. I always work on adding in 27% for overheads.
With thanks to Jonty
Thank you both for your help, I am looking to do this shortly so if I come up against any hurdles, I may be back in touch!!
With thanks to Pamw79
Unsure if your still working on Cost per Contact. I had the same thoughts as you working within a public sector contact centre; we were not an cost efficient centre at the time, and while things have changed we needed to produce an incentivised cost recharge model to encourage investment from service area’s to move into the contact centre.
Firstly, to get over the different costs via channels (mainly because the contact centre are also managing the authorities channel migration policy to cheaper channels) we calculate Cost per Work Minute rather than per contact. CpWM excludes time spent idling waiting for another contact.
We have a reporting system which allows us to classify each contact regardless of channel, breakdown total length, and associate it to a customer. We can therefore assign total work time by customer. Then to simplify what is actually quite a complex process we divide total time by customer, by total overheads.
Our calculator is used to project costs of prospective services, so will add a team leader in per x FTE advisors required, will anticipate staff costs dependant on skill required to complete the transaction, include an ICT overheads for software licences etc and also as our authority internally charge for space per desk, we include that as well.
Effectively our customers pay entirely for the service. The balance of cost is fluid and varies dependant on the demand, although we provide a projected cost to them for budgeting reasons. Our cost commitment to them is that we will, collaboratively manage their customer demand to a more cost effective channel over a 3-5 year plan. This means they can encourage customer contact while hopefully platforming total cost.
All of this is made possible with the use of an effective CpWM model. Hope this helps.
With thanks to prokelly