5 Steps to Reduce the Cost of Customer Service and Still Deliver Quality CX

Gladly Team

Read Time

6 minute read

Executives in the C-suite and support managers alike comb through tons of technology options when deciding how to invest their CX budgets best. The ideal customer service solution should drive value for their business over time — but finding a partner that can deliver on sky-high business and customer expectations is difficult.

Brands should look for solutions that provide transparent and scalable pricing that’s accessible to businesses of all sizes. That means researching to understand every cost of customer service — identifying potential savings and valuable ROI opportunities.

With the right partner, brands can transform their support center from a line-item cost into a revenue-driving powerhouse for their business.

What Contributes to Customer Service Costs?

There are several different contributing factors that can quickly add up and eat away at a CX budget. The key customer service costs to consider are:

  • Hiring and employing agents
  • Hiring external resources like BPOs or outsourced teams
  • Operating on and managing various support channels — particularly more expensive ones like voice/phone
  • Purchasing, licensing, and implementing CRM software or CX tooling
  • Adding additional third-party apps and integrations, including customer performance tracking, feedback, and agent performance tracking
  • Additional expenses from sticking with legacy infrastructure, like using ticket-based platforms or not offering self-service

While some costs are unavoidable (i.e. paying for agents, the need for additional software), there are key ways to reduce customer service costs without sacrificing on quality of service. Some of these methods will not only reduce costs, but they’ll also increase the quality of service. This is because these strategies work to alleviate manual tasks from agents and free up more time to develop customer relationships, make personalized recommendations, and increase cross-sell and upsell opportunities.

Reducing Customer Service Costs Strategically

In the age of the loyalty economy, a brand’s investment in customer service is crucial to success. A lack of attention to your support center will hold businesses back from fostering any connection or brand affinity with shoppers. Meanwhile, an emphasis on CX will return value tenfold if it’s leveraged to create lasting, high-value relationships with loyal customers.

Not only can the ideal CX solution drive revenue, but it should also reduce customer service costs through more efficient internal and technical operations. The right partner will be instrumental in improving support processes and minimizing reliance on costly external hiring and resources.

Let’s take a look at how brands can understand the true cost of customer service and derive more value from their support centers — including real success stories from Gladly customers.

Pro Tips On How to Do More With Less

Brands today are walking a tightrope of having to grow the business while being asked to do so with less budget and resources. During the 'Doing More With Less' panel at Gladly Connect Live 2024, CX leaders offered advice to teams facing budget constraints:

  • 'Sounds basic, but the #1 thing is to create a plan because from there, you have a foundation from which to work. And at the center of your plan, remember to hold the customers near and dear.' - Christina Sheehan, Crate and Barrel
  • 'Take a step back and fully understand the problem, then communicate with your team. You need buy-in from the team because you can't do it alone, and remember to always celebrate the small wins.' - Simas Tamosaitis, SelectBlinds
  • 'Get scrappy and start testing — fail fast, fail small, learn, then move on.' - John McCahan, FTD Flowers

1. Simplify Your Customer Service Tech Stack

Overly complex CX tech stacks — with multiple, overlapping support solutions — are hotbeds for costly issues. Common symptoms of an overly complex CX tech stack can include:

  • Agent collision on the same customer service requests
  • Ticket proliferation across agents and channels
  • System complexity for users
  • Ongoing maintenance requirements from IT
  • Upgrade costs for businesses scaling rapidly

A high-value solution will streamline your tech stack by consolidating all channels and self-service into a simple interface, with a knowledge base that turns agents into experts on your brand and products.

How Peak Design Found Value in Simplicity

The luggage company Peak Design employed a complex CX stack with their legacy Zendesk system. Struggling with high ticket volume and lost conversations with customers, they turned to automated support from Gladly — with the combined power of Hero AI and Sidekick integrating seamlessly into existing frameworks and preventing overreliance on complex systems.

Hero AI Results:

  • 98% CSAT
  • Saved $17,000 in subscription fees
  • Lost 0 conversations in the queue

Gladly Sidekick Results:

  • Resolved 18% of conversations
  • 100% automated order tracking, returns, and warranties

2. Consolidate Work Volume by Ditching Tickets

Legacy ticket-based customer service systems create higher volumes of data to sift through — not to mention generate duplicate, or disparate information that makes agents’ work difficult. Rather than relying on tickets, high-value CX solutions are conversation-driven, providing context and easy access to personal details that make agents more efficient and prone to developing strong relationships with customers.

How JOANN Streamlined Agent Work Using a Modern System

The retail brand JOANN needed to transfer away from a legacy ticketed CX system to a more efficient, radically personal, and conversation-driven system. In Gladly, they found the capability to more efficiently use their channels — like prioritizing SMS over voice — all while keeping personalization within each interaction and driving efficiency for agents.

As JOANN customer care manager Ruth Jones said, “It was the efficiency part to it. We used a ticketing-based system before, and anytime the customer would email us multiple times, it would create a new ticket each time. Whereas with Gladly, since it’s all in its own conversation, it doesn’t matter how many times they emailed us, we just have the one conversation to handle.”

Results with Gladly:

  • Email backlog came down 93%
  • Support response times went down by 70%
  • Staff were able to handle 25% more volume overall

3. Save on CX Labor Costs

Systems broken up by channel or with complex user interfaces are costly to implement. High-value CX solutions optimize your channel mix to maximize agent efficiency — automatically directing customers to the most effective channel while driving customers to SMS and self-service for the greatest possible support optimization.

With the benefit of AI, these shoppers will be able to accomplish so much more in less time — freeing up CX workers as a result. In doing so, your company can save on labor costs without sacrificing quality in your experiences.

Empower Your Agents to Be More Efficient

'You should use AI for repeatable, mundane tasks,' says Tamosaitis of SelectBlinds. 'In the event that there needs to be a handoff to agents, all the agent has to do is customize and personalize and build that exceptional customer service.'

How Bonafide Built a Strong CX Team on a Budget

Bonafide Health struggled with high conversation volume across channels — until they turned to AI solutions from Gladly Sidekick. This intelligent self-service tool automatically assists Support Heroes in building customer connections and increasing productivity.

Results with Gladly:

  • 54% of self-service questions resolved
  • 65 total Hero hours were saved
  • 50% average ROI

4. Do More While Hiring Less

Brands using complex systems with high barriers to entry may end up needing additional resources, like BPOs to handle high volume. Frictionless systems help agents serve more customers at once, while AI makes self-service far more powerful and reduces the need for external resources.

How One Accessory Brand Made Efficiency Their Business Model

A customer service director for a multi-million dollar accessory brand typically managed seasonal spikes by tripling staff, a tactic that strained both the brand’s budget and bandwidth. Breaking that cycle, they launched proactive CX with Hero AI and Sidekick from Gladly to ease the pressures from holiday shopping, reduce the cost of customer service, and enhance the quality of service for their customers.

Results with Gladly:

  • 35% of self-service conversations were resolved outside of peak season
  • 52% of self-service conversations were resolved during peak season
  • Annual hiring was reduced by 51%

5. Drive Revenue Through Your Support Center

With legacy systems, CX teams are just trying to stay afloat amidst a sea of traffic and requests, without any time left to generate new revenue opportunities. But a more efficient CX solution will unleash your support center as a revenue driver — empowering agents into Support Heroes and making them far more equipped to develop valuable, long-lasting customer relationships.

With Gladly, support centers unlock revenue and reduce the cost of customer service by:

Unlock the Talents of Your Customer Service Agents

During a panel discussion on AI Adoption at Gladly Connect Live 2024, Lauren Inman-Semerau, Head of CX at Rothy's, shared an insightful comment: 'I work hard to have my brand ambassadors bring the brand experience to life. For me, AI is allowing my brand ambassadors to do that at a deeper level. All of that low-hanging fruit — get it done, get it out to the queue. AI can do that while I'm working to upscale the rest of the agents so they can have deep knowledge of the product, start to sell, and surprise and delight.'

How Crate & Barrel Cashed in on CX

Crate & Barrel became a retail giant far before Gladly existed, but the company knew there was more opportunity to boost sales. They used our solution to restructure their support center as a revenue driver, focusing on digital sales by turning agents into salespeople who knew their customers deeply. To further simplify the bridge between conversation and sale, they made transaction completion easier than ever by implementing payments right in chat.

Results with Gladly:

  • $8 million-plus in additional revenue

Turning Customer Support Into a Value-Generating Center

These real-life examples of satisfied and thriving Gladly customers show how the cost of customer service can be minor compared to the substantial value and ROI a CX solution can deliver to a business. By offering simple, scalable pricing tiers without any surprises, Gladly and our state-of-the-art, AI-powered solutions are the key to deriving more value from your support center than ever before.


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