Counting the hidden cost of customer issues
Customer support is a cost centre. This has been a truth in business probably since Bell invented the telephone. Even with the drive towards customer success and customer support becoming an essential element of business strategies. Particularly in eCommerce, customer support is still seen as a revenue drain. But what if it wasn’t?
What if customer support could be pivoted into a revenue centre? In the next part of this series, we will be discussing how you can apply metrics to determine the impact of customer support in your customer retention and revenue pipeline. In today’s post we will be covering how you can uncover the hidden cost of customer issues. We will be discovering how much they cost you in support and how you can run an issues and mitigation review to alleviate the impact.
This is particularly relevant to eCommerce as it’s not a ‘bricks and mortar’ enterprise. Customer support is a crucial part of the eCommerce ecosystem. Customers are relying on conversations with your team to solidify their perception of you as a business.
What are the costs of customer support?
You probably know your cost per hour, and your average cost per call. But whether you know it or not, every customer issue comes with a different cost. Man hours in customer support, damaged customer loyalty, brand reputation can all be calculated with a cost per issue. Our focus today will be on the cost per issue in support only and the changes you can make to bring this number as close to zero as possible.
How to calculate the cost for an eCommerce business
In today’s example our support tickets come from an eCommerce store specialising in women’s clothing. Their website has 14,568 products, a customer base of ~22,000 and between 8,000 and 10,000 support tickets each month. To do the maths on this, we need to look at the volumes of tickets. Let’s break it down into business departments and then the reasons to contact. It’s the reasons to contact where we will see the hidden costs. The cost of an issue per month is calculated as (man hours x cost per hour)
What to do with this information
Lets take one of the above reasons to contact. ‘Incomplete order’ is a perfect example. In one month this issue, which is only 5.25% of the total volume of issues for logistics has cost the company $8,350. This is before you factor in either refunding or reshipping the missing items.
Taking the information gathered you can send it to the logistics department. You can work with the wider team there to put in policies and best practices within the department to mitigate the issues and the cost.
You can start doing this by using the tags applied by your support agents to each support conversations. We all know these manual tags are not reliable, but it will give you an idea of what you can do with this data. Then, if you want more specific and reliable reasons to contact to analyse your support cost, AI is beyond valuable in accessing and organising this data. Using AI to analyse the information and surface which issues are the highest volume will allow you to start this project with far more ease and confidence. Cx Moments is an intelligence platform that creates instant insights into the issues that matter to your customers and impact your business.