What is cost per contact?
Cost per contact (sometimes called cost per call when only voice is counted) tells you what it costs, on average, to handle a single customer interaction. It is one of the most important numbers in contact centre management because it connects operational performance to the budget.
The basic formula is:
Cost per contact = total contact centre cost / total contacts handled
For example, a centre that costs $1.2 million a year to run and handles 120,000 contacts has a cost per contact of $10.
What goes into the cost
The figure is only useful if the cost side is complete. A fully loaded calculation usually includes:
- People: agent wages, KiwiSaver or superannuation, leave and other on-costs, plus team leaders, quality analysts, trainers and workforce planners.
- Recruitment and training: advertising, onboarding and the weeks a new agent spends learning before they are productive. High attrition makes this a large hidden cost.
- Technology: the contact centre platform or CCaaS licences, CRM, call recording, workforce management and reporting tools.
- Telephony: carrier charges, freephone numbers and call minutes.
- Facilities and overheads: office space, equipment, IT support and management time.
Many organisations undercount by looking only at agent wages, which makes an in-house centre look cheaper than it really is.
What drives cost per contact up or down
Most of the cost is people’s time, so the biggest drivers are how long each contact takes and how much paid time is spent not handling contacts:
- Average handle time - longer calls and more after-call work mean fewer contacts per paid hour.
- Agent occupancy - idle time between calls is paid time with no output. Small dedicated teams usually carry the most.
- Shrinkage - training, meetings, leave and sickness reduce the hours actually available.
- Repeat contacts - poor first contact resolution means one problem generates two or three contacts.
- Channel mix - self-service and automated contacts usually cost much less than a live call. A rising containment rate lowers the average.
Per-seat vs per-interaction pricing
When you outsource, the pricing model shapes your cost per contact as much as the provider’s efficiency does.
Per-seat (or per-FTE) pricing
You pay a fixed rate for each dedicated agent position, usually per hour or per month. It is simple and predictable, and it suits steady, high-volume work. The catch is that you carry the idle time. If calls drop off overnight or in a quiet week, the seats still cost the same, so your real cost per contact rises whenever volume falls.
Per-interaction pricing
You pay for each call, email or chat handled. This only works when the provider shares trained agents across clients, through blended resourcing, so idle time is spread across a larger pool rather than billed to one client. Your cost per contact stays predictable even as volume swings, and occasional needs such as overflow call handling, after-hours cover or storm response cost little until they’re used.
Using cost per contact well
Cost per contact is a balancing measure, not a target to drive as low as possible. Read it alongside customer satisfaction, FCR and quality scores, and compare like with like: a complex fault call and a simple address change will never cost the same. Breaking the figure down by channel and contact reason shows where automation, better scripting or fixing the root cause of repeat calls will save the most.