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Call Center Optimization: Acquisition Vs Retention

May 13, 2018

“In order to make money, you have to spend money.”

But the secret to call center optimization is that keeping the customers you currently have happy is more cost-effective than recruiting new ones.


So which focus is the winning priority?


Well, the answer is both, but neither to the detriment of the other. Often in the race to call center optimization managers lose sight of their bottom line, as they become too preoccupied with their top line and their client acquisition rates, upsetting the necessary balance between the two. Countering the earlier quote with “A bird in the hand is worth two in the bush”, we explain why achieving call center optimization requires a focus on client retention.


Retention Determines Success

Acquiring a new customer has been shown to be anywhere between five to 25 times more expensive than retaining an existing customer. Finding new customers involves huge costs in terms of time, money and resources. While for the customers you already have, you just need to find ways of keeping them satisfied.


According to research by Frederick Reichheld of Bain & Company, too many companies are missing their biggest opportunity to keep their costs down and improve their bottom line viability. Reichheld found that focusing on customer retention over customer acquisition, by building loyal relationships, had a significant positive impact on profits. His study estimated that a mere five percent increase in customer retention efforts increased profits by 25 percent to 95 percent.


The bottom line: keeping existing customers is valuable. Not only because returning customers already trust your brand and are more comfortable with buying from you, the operating costs of servicing their needs decreases. Let’s also not forget that your most loyal customers also tend to be your most powerful marketers, as they refer new customers to you. What’s more, because of the good rapport, they’re more willing to hang around when things go haywire, preferring to do business with you rather than switch to a competitor that they’re unfamiliar with and don’t trust.


Measuring the Success of Customer Retention

The process of measuring customer retention rates is not as obscure as one may think. In fact, Jill Avery, a senior lecturer at Harvard Business School, has nailed it down to a science by measuring the customer churn rate. “The customer churn rate measures the percentage of existing customers who terminate their contact with a company within a given period”, noted Avery. The churn rate is typically measured by the month, but depending on the industry and the product, the time interval can vary. For example, a mobile phone service provider may set their churn rate interval to a monthly basis, as that’s the common interval for a billing period, while an insurance company may have their churn rate set to an annual basis, based on when a typical policy would expire.


To improve their churn rate, companies need to re-orientate their focus away from outbound marketing objectives and move towards metrics that focus on the customer experience. To do this, they should be asking themselves questions like, ‘Do I know what it’s like to be a customer at my own company? Is the experience satisfying or frustrating? Does our organization provide a high level of personalized care?  How long does it take for a customer to have new issues resolved? Are complaints adequately and easily addressed? Are we utilizing the best technology out there to improve our customer service results?’


Technology is becoming an increasingly relevant solution towards achieving improved customer retention rates. While customers may have greater expectations regarding the expediency and efficiency of services, they are also far more tech-savvy and willing to try and resolve issues independently. A still relatively young, but growing, customer base would prefer to use a digital self-service that would enable them to address service issues on their own, given they had the right tools to do so.


Fortunately, the increasing awareness of prioritizing customer retention is bringing with it a raft of technologies and tools that are helping companies to optimize their call centers and better meet the needs of their customers.  And honestly, you have every reason to get on board, not just because they’re good customers, but because it will give your bottom line potential to grow.

Learn More about the call center optimization technologies available at CallVU .



The new name reflects our expanded focus on delivering digital self-service experiences and agent productivity tools.