When customer support teams grow, support leaders face all sorts of new challenges.
With a small team of support reps, it's easy to know what's happening day in and day out. You know which product features are buggy, which reps need coaching, or what is causing the current spike in support tickets. As you hire more support reps and grow, new challenges emerge. Pretty quickly having a finger on the pulse gets harder to do.
There's a key metric that your CFO or CEO might care about that can give you a 20/20 vision into your customer support operations. The kind of clarity you had with a smaller team: The cost per ticket.
Where most companies are focused on new customers, by measuring CAC (customer acquisition cost), for example, the cost to serve KPI tells a different story. A story about how much it is currently costing to support your customers.
By analyzing the fluctuations in things like the cost per ticket, or cost per case, there are deeper trends that clearly paint a picture of your customer's satisfaction or frustration with your service. So where to begin?
Here are some of the most common reasons why the cost to serve can suddenly rise (and what you can do about it).
How to Measure the Cost per Ticket
Starting with the basics, the goal of a Cost per ticket KPI is to understand where you can optimize your customer support team's work. An accurate understanding of these support costs will facilitate a data-driven dialogue with the rest of your company. For example, decisions regarding product development, hiring new employees, or even prioritizing one project over the next are much more obvious when backed by specific financial metrics and ROI.
This is the most standard formula for the cost per ticket:
Cost per support ticket = Total cost of customer service / total number of tickets resolved in a given period
With the cost per ticket calculated, you can now understand customer support costs for a specific feature, category, tag, etc. You can even correlate the cost of supporting a particular customer by comparing it to their ARR or MRR.
Alone it tells support leaders when there is a new issue, a bottleneck, or even a quality control problem. Although the cost per ticket is crucial, many quickly realize that it doesn't tell the whole story. There are various reasons why it can suddenly rise.
Why Cost per Ticket Goes Up (and what you can do about it)
New features are... confusing 🤨
Increased customer support costs often coincide with the release of new functionality or a product update. That doesn't necessarily mean bugs and technical issues. Sometimes an increase in support workload is caused by an unclear UI/UX, non-obvious integrations with older features, or the fact that the Product team didn't announce an update early enough.
If the increase in costs coincides with a new version launch, you can take the following steps:
- Collaborate with the product team to add UI tooltips and explanations into the product
- Update the knowledge base to include new features
- Proactively notify users of changes and potential issues
User support representatives need training or are not following instructions
Support reps' competencies include technical skills (good knowledge of the product and possible issues with it); process knowledge (at what point and under what conditions a support request should be escalated to another rep or the engineering team); and soft skills (the ability to interact with a frustrated customer effectively).
It is important to measure customer sentiment and customer satisfaction scores to identify what kind of skill shortage is driving up customer support costs. Then look for correlations between these metrics and the performance of a particular support rep.
Support reps' performance and proper training become especially important if the team works from different locations worldwide and cannot be supervised directly.
What can be done:
- By measuring user sentiment and CSAT, identify support reps in need of technical training or a soft skills training
- Update support scripts and instructions
- Introduce mentoring and knowledge-sharing programs for the team
Customers are checking in for the status updates
The cost of closing a ticket can increase because of the number of interactions it takes to resolve an issue. If the average response time is too long, status update requests increase simultaneously. Not only does this increase costs, but it also worsens the customer experience. Try keeping customers in the loop with regular updates so they don't have to send you "What's the status of my issue?" messages.
A new customer has lots of first-time questions
By grouping the most frequent customer requests by categories and tags, you can see that often the most resource-intensive category is a new customer onboarding. In this case, support costs will fluctuate unpredictably depending on the number of new customers and their difficulties with onboarding.
Try to integrate a tutorial into the product or update the knowledge base with a separate section for new users to reduce these costs.
Bugs that need engineering attention take too long to get to the engineering
The number of escalations is another crucial metric that correlates with the cost-per-ticket and CES. Each additional interaction worsens the user experience and bloats the team's budget.
Reducing the number of escalations is a complex task, and that's what can help:
- Clearly describe when and in what scenario an escalation should take place
- Group the most costly tickets by category or trend. Check if recurring issues can be fixed on the engineering level.
Ineffective ticket routing doesn't leverage internal subject matter expertise by specific reps
Not all support teams divide support representatives into tiers or subspecialties from the start, but sometimes it makes sense as the team scales. There are experts in specific product functionality, reps with more profound technical knowledge, or people who are great at handling the tensest and conflict-prone situations due to their soft skills.
Efficient ticket routing reduces support costs significantly. To set up such routing, you will need an automated category and tagging system with a good level of precision and granularity.
The knowledge base can use an update to help tackle the more simple and common questions
Keeping the knowledge base up-to-date takes time and effort, but this effort pays off. Surveys show that users prefer to find an answer on their own before contacting Customer support. Also, the knowledge base must be easily accessible, meaning that customers are aware of its existence.
Depending on the industry, the knowledge base can be led by a community of customers who help each other online on a forum or in social network groups.
Customer support can be visualized as a funnel: from self-serve support layer to conversations with a support rep and escalations to higher tiers or engineering. As you move down the funnel, the Cost per ticket increases. But with the right customer intelligence and automation tools, the team can resolve the issues early on, cutting the costs and providing the best customer experience.
What is Stylo?
Stylo helps customer support teams become world-class operators.
With 5min integrations into ZenDesk, Salesforce, Jira, and any other helpdesk/ticketing system, customer support teams can handle more tickets quicker while improving response quality and time to resolution.
We do this by organizing customer data into meaningful categories so you can see detailed trends as they unfold. Things like...
- Customers who are frustrated (what's causing dissatisfaction)
- Confusing product features (understand spiking tickets)
- Support reps who may need coaching (identifying training gaps)