- Understanding the true cost of support is critical when it comes to making smart decisions about how to staff your team and budget for growth.
- Customer support costs can be divided into three main categories: cost per support ticket, cost of support per order, and cost per revenue.
It should come as no surprise that customer support is essential — especially for SaaS businesses.
With hundreds of companies competing for attention in nearly every industry, keeping your customers happy is more important than ever.
However, for startups or smaller companies, the idea of creating a support team from scratch can seem overwhelming, especially when you have no idea what the return on investment (ROI) will be or what the initial investment might look like.
Although we urge you to see customer support as an engine for growth rather than merely a cost center, this article will help you answer the question, "How much does it cost to support a customer?".
The many costs of customer support
Businesses providing excellent customer experience generate 4% to 8% more revenue than their direct competitors. But how exactly can you break down the cost of customer support into one number? While there isn't an exact answer, there are a few key areas where you can focus your attention to get an idea of how much it might cost to support a customer.
These costs can be divided into three main costs:
- Cost per support ticket
- Cost of support per order
- Cost per revenue
Cost per support ticket
One of the easiest ways to see how much it costs to support a customer is to calculate the cost per support ticket.
To do this, you'll first need to calculate how much it costs to staff your customer support team. This number will include the salaries of your customer support reps as well as any benefits they might receive.
Once you have that number, you can divide it by the total number of tickets your team handles in a given period, giving you the cost of support per ticket.
Total customer support spending/ Number of tickets = Cost of support per ticket. Let's say you spent about 8,000 on customer support in September and resolved 1,000 tickets. This would mean that the cost of support per ticket would be around $8 per ticket.
However, what's important to remember is that there are other unseen benefits that come from providing excellent customer support, like increased loyalty and customer retention. So, while it might cost an initial $8 to help your customer, they are much more likely to stay with your company (and continue spending money) in the long run.
Cost of support per order
For every dollar spent on acquiring new customers, businesses need to spend a percentage of that just to keep them. This is why it's essential to include retention and support costs when trying to understand the true cost of customer support.
To calculate the cost of support per order, you'll need to take your total customer support spending and divide it by the number of orders you generate in any given period. This will give you the cost of supporting each individual order.
Total customer support spend/number of orders = cost of support per order. For example, if you spend $8000 of total customer support costs in September and generate 100 individual orders in that time, you cost of support per order is $80.
If this number is higher than expected, you may be spending too much time on support or not enough time on sales. In this case, it might be necessary to hire more customer support reps or invest in automation tools to help lighten the load.
Cost Per Revenue
One of the last ways you can calculate the cost of customer support is by determining how much you're spending on support per dollar of revenue. This will help decide if all the costs are worth it in the long run — or at least in a range that is comfortable for your company.
To calculate this number, you'll need to take your total net sales and divide it by the number of tickets you have in a set period of time. This will tell you the true cost of support per revenue.
Net sales/ Total Number Of Tickets = Cost Per Revenue. For example, if you generate $10,000 in sales in September and resolve 1000 tickets, your cost per revenue is right around $10.
If this number is too high, it might be a good idea to analyze where the majority of costs are coming from and see if there are any areas where you can cut back or if there are any inefficiencies in your process. Is it taking too long to resolve tickets? Are there too many support requests coming in?
Answering these questions can help you get a better idea of where your money is going and how you can improve your customer support process.
Once you have a handle on your costs, you'll be able to make more informed decisions about how to grow your business while still providing excellent customer service. For example, a solution may look like investing in technology such as Fullview Live cobrowsing to help make your ticket resolution process more efficient and reduce time to resolution.
Customer support is a crucial part of any business, but it's essential to understand how much it costs to provide that support. By calculating the cost per ticket, order, and revenue, you can get a better understanding of how customer support affects your bottom line. And with that knowledge, you can truly answer the question, "How much does it cost to support a customer?"
Remember that customer support is a significant avenue for acquiring new customers, retaining the ones you have, and ultimately growing your company. So, while it might cost a little bit of money upfront, the long-term benefits are well worth it. So, instead of thinking of customer support as a cost center, think of it as an investment in your company's future.