4 critical insights to help reduce customer support costs and improve service in 2024

Natalie Smithson
AI enthusiast | Tea addict | Focused on using AI assistants to win the working week
A person and an AI assistant are surrounded by data charts, an up arrow and cogs

Customer service managers face the seemingly impossible task of improving service while cutting costs this year. Yet good customer support isn’t just about keeping up with customer enquiries, it’s about nurturing strong relationships with customers, understanding their unique needs, and giving people a personalised service while you’re at it. This ultimately boosts profits, but cutting back on the costs of providing such well-rounded support is now a must for many customer service leaders with budgets squeezed from all angles.

The good news is, you can spend less on customer support without sacrificing the quality of your service, and cutting costs doesn’t mean you have to cut corners.

Here’s how you can do it (with some help from AI).


  • There are lots of ways to reduce customer support costs, but if you improve service at the same time, you improve your situation two-fold by increasing revenue and saving resources
  • Break down costs to incentivise savings, hire the right team (and keep them), make getting support convenient for your customers, and let customers help themselves with self-service
  • These tried and tested approaches show a shift in mindset, long-term focus on improving service alongside some quick-to-action initiatives can help set your teams up for success
  • Trying to cut corners to save money can often lead to a decrease in service or product quality and half of consumers are already switching brands after one bad experience
  • 65% of people have higher expectations for customer service today than 3 years ago, so customer service leaders are using advanced AI technology to meet the expectation

Why prioritising improvements to customer support is essential

Regardless of a shrinking budget, making continuous improvements to customer service is necessary for the long-term success and growth of your organisation. High quality support will strengthen customer ties and enhance brand reputation, plus it allows you to stand out from the crowd and stay competitive.

That’s why exceptional customer experience (CX) matters in both good economic times and in bad:

You’ll grow a solid brand reputation

When your customers feel well supported they’re more inclined to share positive feedback and recommend your brand to others.

Invesp reports “people are 90% more likely to trust and buy from a brand recommended by a friend,” so use this insight to your advantage to attract new customers organically and cement a solid reputation within your industry.

90% of people buy brands recommended by a friend

Stand out from your competition

As customers come to recognise your dedication to giving them an exceptional experience, you gradually emerge as a leader within your industry. They don’t say “It’s not just customer service; it’s M&S customer service” for nothing. Founded in 1884, the iconic brand is still winning awards today for going the extra mile to delight customers with exemplary service.

Increase customer retention

When you make improvements to your service to help provide a memorable experience for your customers, they become loyal followers and are more likely to stick around to continue doing business with you.

Acquiring a new customer can cost five times more than keeping hold of an existing one, so work at keeping your returning customers happy to avoid this expense.

Acquiring a new customer costs 5x more than keeping hold of an existing one

Increase revenue

Improving customer support helps increase the lifetime value of every customer. As you deepen your understanding of people’s unique requirements, you’re better equipped to offer relevant products and services that appeal to them, so you can up-sell and cross-sell effectively. Giving customers more of what they want increases satisfaction, naturally generating more revenue.

You know why these continual improvements are important, but how can you work towards them and cut costs at the same time? Let’s find out. (Don’t tell anyone, but AI is your secret weapon.)

4 ways to reduce customer support costs while improving service

There are lots of ways to reduce customer support costs, but if you can improve service at the same time as slicing chunks off your monthly budget, you improve your situation two-fold. You’ll increase revenue for your organisation and save on resources while you do. Here are some smart ways to approach the challenge, plus we’ll show you how AI can help you get the results you want faster:

1. Break down costs to incentivise savings

If you haven’t thought about it before, isolating a single cost in your calculated efforts to reduce spending can be more motivating than focusing on your total expenditure.

Barking & Dagenham London Borough Council were spending around £192,000 every month on customer support calls and emails, but when they broke that spending down to better see where their budget was going, they found every individual enquiry cost them £4.80. Keeping this figure in mind every time they answered a query helped the team consider how they might improve services and do away with any unnecessary and repetitive queries that cost the council so dearly. They chose to use an AI assistant to automate routine queries and saved £48,000 in six months.

In just 6 months Barking & Dagenham Council saved £48,000

To reveal your own cost per enquiry, simply take your total monthly support costs and divide them by the number of enquiries you get.

Using AI to help: You’ll pay pennies, not pounds, for an advanced AI assistant that can handle your routine enquiries, so your contact team doesn’t have to. Here’s a top tip: Using one makes budgeting easier too. Rather than pull in pockets of information from different places, you’ll be able to see everything customers are asking about across all your channels in one place, ready to inform your decisions and strategic planning.

Image of information and charts on EBI.AI platform dashboard with data being pulled in from WhatsApp, a mobile app, and a website

2. Hire the right team (and keep them)

The true cost of hiring a customer support agent is more than you might think when you take into account holiday and sickness pay, pension contributions, training costs, equipment, and tax. If they leave, you have to start all over again with fresh recruitment and training costs (you might have to account for a loss in productivity too if the team left behind suffers and service quality drops). To avoid these costs, push to keep your agents happy.

One way to do this is to nurture empathy throughout your organisation. Recognise and offer support for the challenges your agents face and you can develop more resilient customer support teams. They can better support your customers and you’re then well on your way to developing robust, long-lasting customer relationships that contribute to business growth.

Using AI to help: Improve work for customer service agents and automate routine tasks, so your teams can focus on more challenging or rewarding issues and find new ways to achieve empathy in customer service.

3. Make getting support convenient for your customers

Customers naturally want to get help at the exact time they need it, and these days they can, even if it’s 4am and your support teams are all tucked up in bed. People expect to also receive that support across all channels, including your website, social media channels, and apps.

Many companies struggle to provide that, but it’s possible to radically improve your omninchannel experience with the help of AI. Customers can then turn to you whenever and wherever they need you and come to rely on getting a fast, reliable response. This naturally prompts an increase in customer satisfaction and, in turn, customer retention.

Using AI to help: Almost a decade of experience creating the most advanced AI assistants shows us 35% of customer enquiries come in out of hours when contact teams are offline. An AI assistant working round the clock can answer those enquiries, offering customers support at any time (day or night) most convenient to them.

35% of queries come in when contact centres are closed

4. Let customers help themselves with self-service

Nobody wants to wait in a queue to have a question answered or their needs met and this one’s pretty simple to solve now self-service is everywhere. Having the option to find information and take action for themselves empowers customers and releases your support teams from finding and repeating the same resources over and over again. Include everything your customers ask for or want to do most often in a self-service format to save everyone time and energy:

  • Online set-up or onboarding
  • Personalised recommendations
  • Downloadable guides
  • How-to videos
  • Interactive tools
  • Webinars and online training
  • Tutorials

This can reduce the number of enquiries your teams need to deal with directly and gives your customers independence to find things out or do things easily for themselves.

Using AI to help: When Legal & General launched an AI assistant to work 24/7 across every channel, 83% of their customers started turning to the AI assistant first, rather than phoning in or emailing because they prefer instant responses through the day and night.

Set yourself up for sustainable customer service improvements

These tried and tested approaches to cutting costs show a shift in mindset, long-term focus on improving service alongside some quick-to-action initiatives can help set your teams up for success.

Why you shouldn’t cut corners to reduce costs

65% of people have higher expectations for customer service today than they did 3-5 years ago. Customers expect support to be instant ― any time, anywhere.

Trying to cut corners to save money can often lead to a decrease in service or product quality, which can put a significant dent in the experience a customer has with you. If cost-saving measures lead to longer wait times for help, less support staff, or less knowledgeable staff, the quality of service can drop noticeably and when your customer satisfaction score goes down, customer churn can go up.

Half of customers are walking away from bad CX

Zendesk reports “50% of consumers will switch to a competitor after one bad experience, and 80% will switch to a competitor after more than one bad experience.”

Since the average customer retention rate is 75.5%, a quarter of those customers won’t come back, and if that isn’t concerning enough, consider where the majority source of your revenue comes from. Zippia confirms 65% of it “comes from existing customers,” so you won’t want to skimp on service and risk pushing away the customers you already have on board who are loyal to your brand.

Thankfully, there are new and affordable ways of delivering a consistently high service, so you don’t have to cut corners. McKinsey reports using AI is the “quickest and most effective route for institutions to deliver personalized, proactive experiences that drive customer engagement”.

Where to start with AI to help cut costs and improve service

Trying to reduce support costs without impacting service and losing customers can feel like you’re walking a tightrope, but customer service leaders everywhere are using advanced AI technology to meet the expectation. By 2027, Juniper Research predicts up to 90% of customer queries will be handled by AI assistants.

When Barking & Dagenham Council automated 6% of their customer calls, it saved them the cost of 10,000 customer enquiries (£48,000) in just six months.

By 2027 90% of customer queries will be handled by AI

Even complex transactions or complicated processes can be automated by linking up your AI assistant with your business systems. As a result of this, the Council has seen a 67% uplift in customer satisfaction, reporting the AI assistant is “exceeding customer expectations”.

Start with your customer service goals

Any efforts you make to improve customer service are likely to revolve around hitting key customer service goals, like maintaining efficiency and driving satisfaction in everything you do.

Increasing efficiency with AI

Using a next-gen AI assistant can help improve first contact resolution, where customers get answers to queries without needing to speak with multiple departments or to contact you more than once. Over time, the more an AI assistant learns, the more enquiries it can solve from start to finish without any help from your agents, which saves your resources. It also never forgets information, so can only grow more helpful and more valuable to you over time.

Keeping customers and agents happy

Understanding what your customers need takes time to master, so relying on temporary or zero-contract agents to handle cost cuts can have a detrimental impact on service. Also, when those temporary contracts are up, your workers take everything they learn with them. That’s why customer service leaders are introducing AI-driven assistants to cut customer service costs without having to dilute the strength of their support teams. On the contrary, an advanced AI assistant can quickly evolve to be the most expert member of your support team, learning at a phenomenal rate that surpasses human capabilities (your agents can even come to rely on it as a source of reliable information that helps them day-to-day).

High returns and increased customer satisfaction

Barking & Dagenham Council were successfully able to reduce customer support costs and significantly increase customer satisfaction with the help of an AI assistant and achieved a 533% return on their investment (ROI) in just nine months.

To see what you can achieve for your organisation, calculate your estimated ROI today using our handy savings calculator, or go ahead and dive right in to start making savings in customer support today.


What helps reduce customer support costs?

Proactively isolating costs, boosting team morale, enhancing service convenience, and incorporating self-service solutions can significantly reduce customer support costs. These strategies help streamline operations, improve efficiency, and bolster customer satisfaction, mitigating the tension of a squeezed budget.

What strategies can you use to reduce costs?

To reduce costs, consider refining operational efficiencies, using AI for automation, renegotiating supplier contracts, and reducing waste. Prioritising employee engagement also helps with productivity, reducing turnover. Data-driven decision making identifies cost reduction opportunities too. Overall, make sure quality isn’t compromised, as this can lead to potential long-term costs.

How can you reduce costs but maintain quality?

Balancing cost reduction while maintaining quality involves strategic decisions. Streamline processes and use AI technology to boost operational efficiency. Invest in continuous employee training to enhance productivity. Apply a lean management approach to reduce waste. Regularly review supplier contracts and renegotiate for better terms. The key focus should always be on delivering value to maintain quality.

How can you reduce costs quickly?

Quick cost reduction can be achieved by eliminating non-essential expenses, automating manual tasks, renegotiating with suppliers for better rates, and implementing efficient energy use. Temporarily freezing hiring or reducing overtime can also help. It’s important, however, to assess the long-term impact of these measures on operations and quality.