Reducing the cost of customer service while maintaining — or improving — quality of service: this is the equation that every finance and operations director is trying to solve. It is difficult, but not impossible. The key is to act on the right levers and avoid the shortcuts that degrade customer experience in ways that cost far more than they save.
Cost per contact (or cost per interaction) is the ratio of the total cost of your contact centre over a given period to the number of interactions handled during that same period. It includes direct costs (advisor headcount, supervision, training) and indirect costs (infrastructure, technology, management overhead).
Across European markets, cost per contact varies significantly by sector, channel, and interaction complexity:
These ranges demonstrate that significant efficiency gains are achievable — but only if they are pursued intelligently and with a clear understanding of the trade-offs involved.
The cheapest contact is the one that never happens. Before looking at how to handle interactions more cheaply, ask yourself: why are customers contacting your service in the first place?
In most sectors, 30% to 50% of inbound contacts relate to information the customer could find independently if it were more accessible: order status, opening hours, FAQ answers, simple processes. A well-designed customer portal, a properly indexed FAQ, and a correctly trained chatbot can absorb a significant share of this volume with no human intervention.
The impact is twofold: reduced human contact volume and an improved experience for the growing segment of customers who actively prefer self-service.
Every callback from a customer about the same unresolved issue multiplies the cost per resolution. A customer who contacts three times costs three times as much to serve — and leaves three times less satisfied.
Improving FCR (First Contact Resolution) is therefore one of the most powerful levers for reducing the true cost per resolution, even if the apparent cost per individual contact remains stable. Concrete actions to improve FCR include: stronger advisor training, broader empowerment to resolve without escalation, better real-time access to information, and structured root cause analysis on low-FCR interaction types to address the underlying process failures.
Not all channels are equal in cost terms. Telephone is typically the most expensive channel — it requires real-time, one-to-one engagement that cannot be pooled. Email and chat allow advisors to handle multiple interactions simultaneously, mechanically reducing the unit cost. Self-service and AI-powered handling are cheaper still.
Channel deflection strategy involves routing contacts toward the channel most appropriate to the type of request: simple queries toward self-service or chat, complex or emotionally sensitive situations toward voice. Well-designed deflection reduces costs without degrading satisfaction. Poorly designed deflection frustrates customers and generates callbacks — producing the opposite effect to what was intended.
A BPO provider pools resources across multiple clients and operates at a scale of economies you cannot replicate internally. For standardised, high-volume interactions, outsourcing typically reduces cost per contact by 15% to 35% compared to equivalent in-house management.
Outsourcing is not the right answer for everything: strategic, highly complex, or high-stakes relational interactions are often better managed internally. But for operational volume, recurring standard contacts, and seasonal peaks, a BPO partner such as Armatis delivers a cost-quality ratio that is difficult to match in-house — particularly when technology investment, multilingual capability, and 24/7 coverage are factored into the total cost comparison.
A well-trained advisor handles interactions faster, makes fewer errors, and generates fewer callbacks. Training investment appears costly in the short term, but the return is rapid: a 30-second reduction in AHT across 100,000 interactions represents over 800 hours of advisor capacity recovered — without adding a single headcount.
Training must not be limited to onboarding. Regular updates on product changes, new procedures, and relational techniques are essential to maintain performance over the full duration of the engagement. Knowledge decay is a real phenomenon in BPO operations — and one of the most common root causes of gradual quality drift.
Generative AI opens new possibilities for reducing cost per interaction without degrading quality. The primary tools deployed in European contact centres in 2026:
Combined, these tools deliver advisor productivity improvements of 20% to 40% on the interactions where they are applied — without reducing perceived service quality when implemented thoughtfully.
Some cost reduction strategies appear effective in the short term but create lasting damage to performance and customer satisfaction — generating costs that far exceed the savings achieved.
Start by eliminating avoidable contacts (self-service, FAQ improvement), then improve FCR (training, empowerment, process fixes), then optimise your channel mix. Outsourcing and AI come after, once your processes are stable and well-documented. Deploying sophisticated technology on broken processes does not fix the processes — it automates the dysfunction.
By tracking cost per interaction and satisfaction indicators (CSAT, NPS, callback rate) simultaneously. If cost falls but CSAT falls too, you have transferred cost onto the customer in the form of a degraded experience — which will eventually show up in churn. A genuine efficiency gain improves cost without degrading satisfaction. Both must move in the right direction to constitute real value creation.
Not automatically. A provider that degrades quality generates callbacks, churn, and indirect costs that can fully offset the direct savings. The true total cost of outsourced customer service must include supervision costs, transition costs, and the impact on customer satisfaction — not just the invoice amount. A total cost of ownership analysis over three years is the only reliable way to evaluate the real economics of an outsourcing decision.
Armatis helps its clients optimise their CX performance and cost per interaction through a combination of operational expertise, technology deployment, and a culture of continuous improvement. Our hybrid AI + human frameworks reduce costs while improving customer satisfaction — we measure both, and we are accountable for both.
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