Cost per contact: compare in-house and outsourced support

Key takeaways

Cost per contact is the total cost of customer service divided by the number of contacts handled. It is the fairest way to compare in-house and outsourced support. In our example of 30,000 contacts a year, in-house costs about £2.35 per contact and outsourced about £1.48–£1.84, with extended hours included.

• £2.35 per contact in-house in our 30,000-contact example.
• £1.48–£1.84 per contact outsourced for the same volume.
• Repeat contacts raise cost per resolved issue.
• Self-service answers cut contacts before they arrive.

What is cost per contact?

Cost per contact is a customer service metric: total service cost for a period divided by the number of customer contacts handled in that period, across calls, emails, chats and messages. It turns staffing, tools and overheads into one number you can compare between teams, channels and providers.

• In-house vs outsourcing: which model is more cost-effective?
• In-house vs outsourced customer service: the real cost

How do you calculate cost per contact?

Add every cost of the service for the year: people, overheads, tools and management. Divide by the contacts handled. For a fairer view, also divide by issues resolved, because a contact that leads to three more is not one piece of work.

• Total cost: employment, overheads, software, management.
• Contacts: calls, emails, chats and messages handled.
• Cost per contact: total cost / contacts.
• Cost per resolution: total cost / issues resolved.

• Work out your cost per task before you outsource

What does a worked example look like?

Two in-house agents covering 68 hours a week cost about £70,400 a year including overheads and management. Handling 30,000 contacts, that is about £2.35 per contact. An outsourced team covering the same hours costs about £44,500–£55,100 including your oversight, or £1.48–£1.84 per contact.

What drives cost per contact up?

Long handling times, repeat contacts, idle agent time in quiet hours, and contacts that should never have happened, such as "where is my order?" when tracking updates are missing. The channel matters too: phone contacts usually take longer than templated email replies.

• Repeat contacts from unresolved issues.
• Idle agent time between peaks.
• Missing self-service information.
• Slow systems and manual lookups.

• First contact resolution explained

How do you lower cost per contact?

Remove avoidable contacts first: proactive delivery updates, clear FAQs and order tracking. Then raise first contact resolution with better answers and access. Finally, match staffing to demand, which is where outsourcing helps, because a provider can flex agents across clients rather than paying for idle hours.

• Staff utilisation rate: the cost of paid idle time
• BPO Solutions for UK businesses

Can cost per contact mislead?

Yes. Pushing it down by rushing contacts raises repeat contacts and complaints. Track it alongside first contact resolution, response times and customer satisfaction, and judge the provider on all four.

• Customer service response time benchmarks
• BPO scorecard and KPIs

How does cost per contact differ by channel?

Channels differ in handling time and in how many contacts one agent can manage at once. Phone calls take an agent's full attention; email can be batched with templates; chat lets an agent handle two or three conversations. Calculate cost per contact by channel, then move routine contacts towards the channels that resolve them fastest without frustrating customers.

• In-house vs outsourced live chat: which costs less?

What does this look like in practice?

A pattern we see in UK logistics businesses: a large share of contacts are tracking queries. Adding proactive delivery messages cuts the volume, and outsourcing the remaining routine queries lowers the cost of each one, so total service cost falls on both counts.

• Customer service outsourcing for logistics firms
• See client work

Cost per contact checklist

Use these steps each quarter.

• Total every service cost for the period.
• Count contacts by channel.
• Calculate cost per contact and per resolution.
• List the top five contact reasons.
• Remove avoidable contacts first.
• Compare with an outsourced quote for the same hours.

Next step

Send us your contact volumes and team costs. We will calculate cost per contact and compare it with outsourcing in a 30-minute call.