How to Calculate Your Cost per Inbound/Outbound Call and Why? 

Anwesha Roy

Understanding what is a good cost per call

Strategy
How to Calculate Your Cost per Inbound/Outbound Call and Why? 

One of the most effective ways to calculate your contact centre’s profitability by monitoring your cost per call. This single KPI captures a number of things  how much are you spending on labour, what do your rent and capital costs look like, is your technology infrastructure costing you more than it earns, and does customer demand really justify all this investment?  

Cost per call widely varies from site to site, and organisations can conduct cost per call analysis to pinpoint which locations would be most profitable for the business.  

What is Cost Per Call? Definition and Formula

You can define cost per call as the total opex and capex you spend on a single customer interaction or call. If this number is too high, it means that each interaction is burdening your budgets and may hold back scalability in the long term. A very low cost per call suggests that you might be using sup-par resources (labour, technology, and infrastructure), which will likely impact the customer experience.  

To calculate cost per call, follow this formula:  

(Total cost of hiring, training, and retaining your agents, including wages + contact centre facility rent + software subscriptions + hardware purchases + cost of support staff engaged solely in maintaining the contact centre + operational costs like electricity, water, etc.) ÷ the number of calls processed every day  

The above formula can be applied to inbound contact centres as is but needs a little bit of tweaking for outbound contact centres.  

This is because outbound contact centres primarily engaged in sales and lead generation, where not every call will lead to customer acquisition or query resolution. That’s why several organisations choose to divide total business expenses by the number of leads/sales to reflect profitability more accurately.  

What is a Good Cost Per Call?

Industry benchmarks suggest that an acceptable cost per call could range anywhere between $2.70 – $5.60, including direct labour, indirect labour, and operational expenses. In many cases, cost per call can make up nearly half of the total cost of fulfilling an order!  

But these numbers depend entirely on your industry, the value derived from each interaction, and the agent expertise involved.  

For example, a wealth management institution serving hundreds of customers every day will employ highly skilled agents with specific industry knowledge, driving up the cost per call. But when benchmarked against profitability per interaction (sales for outbound or customer lifetime value for inbound), this investment makes perfect sense.  

Similarly, companies with a small but loyal and high-value customer pool should have a higher-than-average cost per call.  

Why Should You Calculate Cost Per Call?

Calculating cost per call over time is an excellent measure of overall organisational health. If, during a period, this metric spikes, it means that you are probably witnessing a tough market environment. A steady rise  not counting anomalies or acts of god  is a cause for concern and definitely merits further investigation.  

A steady eye on cost per call can help you anticipate business flux and prepare accordingly.  

 


Join our Weekly Newsletter