7 powerful ways to reduce call center costs

Your call center keeps customers connected to your brand—but it’s also one of your biggest cost centers. A small team of just 4 agents can cost over $300,000 a year, while enterprise contact centers often invest millions in staffing, technology, and infrastructure. 

Somehow, you need to find out how to reduce call center costs without sacrificing the quality that keeps your customers loyal to your brand. Cut too much, and satisfaction drops. Spend without strategy, and margins suffer. 

The good news is that you don’t have to choose between more efficiency and a better experience. In this guide, you learn 7 proven strategies to reduce call center costs while maintaining—or even improving—the service quality your customers appreciate and expect. 

Key insights

• Automate what you can, and humanize what matters: for the best balance of cost and quality, use AI and self-service tools to handle routine inquiries, and let your agents handle complex issues that require empathy

• Fix issues at the source: analyze conversations to identify root causes—like confusing documentation or product bugs—so you can prevent repeat contacts

• Monitor quality at scale: use call center analytics software to assess 100% of interactions across channels to maintain service standards while reducing costs

1. Use AI and self-service options to handle routine inquiries

Chatbots, AI agents, and self-service tools answer common customer questions before they even think of picking up the phone—reducing call volume, lowering staffing requirements, and cutting your cost per contact. 

For example, if you’re a mobile service provider and notice customers frequently call to add a partner to their account, build a self-service flow that lets them do it themselves. Fewer calls mean lower costs—and happier customers who get what they need faster.

In fact, customers prefer self-service more than you might expect. Over 67% of buyers would rather solve problems on their own than speak with an agent, and more than 50% like to use chatbots because they answer basic questions quickly.

That said, self-service and AI should complement your human agents, not replace them. Just save human support for complex issues where empathy and problem-solving really matter. 

💡 Pro tip: get better visibility into how well your chatbots and AI agents actually perform. Contentsquare’s Conversation Intelligence, powered by Loris, analyzes interactions across channels, tracking automated resolution, transfers to human agents, and abandonment rates. That means you learn exactly where your bots excel and where they need improvement.

2. Focus on the right metrics

You can’t improve what you don’t measure. Tracking the right customer service metrics helps you spot opportunities to reduce costs without guessing.

Here are 3 key performance indicators (KPIs) to monitor so  you can boost your bottom line: 

• First call resolution (FCR) rate: the percentage of calls you successfully handle on first contact. Reduce repeat calls, escalations, and overall call volume. (Even a 1% improvement in FCR can reduce call center costs by 1%.) 

• Average handle time (AHT): the amount of time an agent spends with a caller. Shorter handle times mean agents resolve more issues in less time. Equip them with a robust knowledge base to help them find answers quickly and keep the conversation moving.  

• Agent occupancy rate: the amount of time agents spend on calls or call-related tasks versus sitting idle. Improve occupancy by removing unnecessary steps and automating repetitive workflows—so agents spend less time on busywork and more time helping customers. 

👉 Speaking of metrics, another big one to watch is customer sentiment. Contentsquare’s 2026 Digital Experience Benchmark report reveals that while resolution matters, sentiment—and how it changes over time—strongly shapes the outcome of a service interaction. When sentiment change is negative, the resolution rate is 28%—but when it’s positive, the resolution rate is 67%. 

Conversation Intelligence helps you track these changes and tie them directly to customer churn, so you lose less revenue.

Track customer sentiment over time to see how conversations affect outcomes

3. Use automated or skill-based call routing

Intelligent call routing uses AI to route incoming calls based on customer data or agent availability. 

It includes strategies like

• Predictive behavioral routing routes callers to the right agent for them, based on historical interaction patterns and customer relationship management (CRM) data

• Interactive voice response (IVR), which greets customers with an automated menu and uses their input to route them to the appropriate agent or department. (Using IVR costs up to 48 times less than manual call routing!)

Connecting customers with the right agents eliminates the need for call transfers and escalations that can frustrate customers. It can also increase your FCR rates, reduce AHT, and improve customer satisfaction (CSAT). 

4. Reduce your call center agent turnover

Hiring, onboarding, and training new call center agents is expensive. In fact, it costs businesses between $18,500 and $74,000 to replace a call center agent.

When agents leave, it disrupts operations and creates a gap in staffing, which can lead to longer wait and call handling times, resulting in customer dissatisfaction and churn. 

Some ways to reduce agent turnover include offering

• Regular training and development programs: one major publisher reduced their call center operating costs by more than 50%—saving over $1 million per year—by providing agents with excellent coaching and training

• Career development opportunities: provide clear pathways for advancement, such as leadership roles or specialized positions, to increase agent engagement and loyalty. Agents who see a future with your company are more likely to stay with you. 

• Competitive compensation and benefits: fair wages, performance bonuses, and benefits like health insurance make agents feel valued and reduce the temptation to leave for a higher-paying job elsewhere

• A positive work environment: recognize employee achievements and promote work-life balance by offering paid time off or flexible hours. Encouraging a supportive and collaborative culture can significantly improve job satisfaction.

• Regular feedback and support: offer constructive feedback and mentoring to help agents grow in their roles

💡 Pro tip: check in with your call center agents weekly or bi-weekly to identify and address concerns. Use Contentsquare to send them a short employee feedback survey for free with questions like ‘How did you feel at work lately?’ and ‘What didn’t go well recently?’ 

Use Contentsquare’s employee feedback survey template, or create your own in seconds using our AI survey generation tool!

5. Onboard your agents effectively

Proper onboarding sets your agents up for success, so they can handle customer inquiries effectively from day one. 

Providing the right tools and training to new hires minimizes ramp-up time and reduces costs by increasing productivity and decreasing mistakes made while learning.

And as a bonus, properly trained agents are more likely to provide excellent customer service—leading to higher customer satisfaction and loyalty, and reducing the costs of customer churn and acquisition. Win-win! 

To make your onboarding process more effective

• Offer your employees a choice of learning styles (like online videos, in-person seminars, or articles) 

• Gamify learning by tracking progress on a leaderboard and offering prizes for completion

• Use an AI-powered course creation tool like Articulate, which lets you convert current course material into more engaging, media-rich interactions

6. Take your call center remote

Switching to a remote call center can cut your costs significantly—companies save around $11,000 per employee per year. You eliminate expenses like office space, utilities, and equipment maintenance, while gaining access to talent anywhere in the world. 

Maintain quality and efficiency as you transition to remote work:

• Choose cloud-based contact center technology that supports remote agents with features like call routing and real-time dashboards

• Set clear performance standards and communication protocols so remote agents know what’s expected and how to escalate issues

• Implement a strong quality assurance (QA) program to monitor performance consistently across your distributed team

💡 Pro tip: assure agent quality—whether human or AI, in-office or remote—consistently and automatically with our Conversation Intelligence tool. Analyze agent impact, and find out who’s struggling. Then, ask AI to create tailored coaching plans to help them perform better. 

Automatically develop an agent coaching plan with Conversation Intelligence

7. Outsource your call center

If your call volumes fluctuate, outsourcing to a third-party provider might make financial sense. More than 54% of companies rely on outsourced customer service, and the cost savings can add up—especially if you’re in a high-cost region. 

Outsourced providers typically offer an established infrastructure, skilled agents, and extensive training programs. Plus, you avoid the cost of physical office space and equipment. 

To cut costs further through outsourcing

• Vet providers carefully, looking for partners who can show evidence of industry experience

• Build flexibility into your contract so you can scale up during peak seasons or promotional campaigns and scale back down when volume drops

Cut costs while keeping customers happy

Running a cost-effective call center doesn’t mean choosing between savings and satisfaction. It just means working smarter—eliminating waste and amplifying what’s working.

When you understand why customers contact you, how agents perform, and where inefficiencies hide, you can start making targeted improvements that have a big impact on your bottom line.

FAQs about contact center cost reduction