ROI-driven decision-making in contact center software investment

One question that comes up repeatedly and in different moments in time ever since I have been working with contact center clients is: “How do we measure the actual financial impact of the software we bought?” As Customer Success Manager, I want to help clients make the most out of our software, and also to help them understand the actual benefits their new contact center software brings to their business.

Return on Investment (ROI) is obviously at the heart of these conversations. While calculating ROI seems straightforward at first, you would be surprised by how often managers struggle to fully capture its complexity. Revenue growth, cost reduction, and efficiency gains are just part of the picture, there are also more obscure factors like customer satisfaction, agent productivity, and long-term brand loyalty that all contribute to calculating the true value of the software.

In this article, I’ll walk you through a few key components of ROI in the contact center industry, highlighting the challenges of accurate calculations, and hopefully give you a few pointers in maximizing your software investment. 

What is ROI?

ROI, or Return on Investment, in the context of contact center software refers to the measurable financial benefits gained from investing in software, relative to the costs incurred. The formula is straightforward: ROI = [(Net Gain from Investment – Money Spent) / Money Spent] x 100 This includes direct gains like cost savings through increased operational efficiency and indirect benefits such as enhanced customer satisfaction, which can lead to higher retention and revenue. And here is when the problem appears, as not all of the Gains or Costs are easy to understand and calculate.

Understanding ROI in contact centers

Key ways ROI is measured include:

Revenue increase

Revenue increase refers to assessing the software’s impact on revenue generation, such as through enhanced upselling, cross-selling, or increased customer retention. Improved customer experience can boost customer loyalty, leading to higher Customer Lifetime Value (CLV) and thus increased revenue over time. 

Additionally, depending on your business type, great contact center software can directly impact your core business objectives. For instance, in debt collection campaigns, it can facilitate the collection of actual payments rather than mere promises, driving tangible financial outcomes while optimizing agent efficiency.

Cost reduction

Cost reduction includes quantifying the savings achieved by optimizing operations. For instance, features like automation and AI can reduce Average Handling Time (AHT), improve First Contact Resolution (FCR), and lower the overall cost per interaction by minimizing the need for manual intervention.

• Productivity gains: Measuring efficiency improvements, such as reductions in agent idle time, increased capacity to handle more interactions, and enhanced workforce management, which allow the contact center to deliver high-quality service at a lower operational cost.
• Customer satisfaction and retention: While often more challenging to quantify, improvements in Customer Satisfaction Score (CSAT) or Net Promoter Score (NPS) can indicate greater customer loyalty, which translates into long-term revenue benefits and reduced churn.

By calculating the balance of these gains against the investment cost, contact centers can determine whether the software delivers a positive ROI.

Calculating ROI for contact center software investments involves several challenges, particularly when it comes to intangible benefits and long-term impacts and that aspect is one that we often notice being overlooked by a number of contact center owners.

Intangible benefits

Many benefits, such as improved customer satisfaction or brand loyalty, are difficult to quantify directly. While high Customer Satisfaction Scores (CSAT) or Net Promoter Scores (NPS) indicate value, these don’t immediately translate into direct financial figures, making them challenging to include in ROI calculations.

Employee satisfaction or morale improvements, which result from a more efficient or user-friendly software interface, can indirectly reduce turnover costs and improve service quality. However, capturing this intangible value in financial terms is complex.

Long-term impacts

ROI calculations often focus on immediate or short-term gains, but some software investments yield the most value over a longer period. For example, features that enhance customer retention or reduce churn have substantial long-term impacts, as loyal customers contribute to ongoing revenue. However, these benefits may take months or years to fully materialize.

Predicting long-term value, especially in a rapidly changing industry, can be challenging. Technology upgrades, changing customer expectations, and evolving business goals mean the ROI of a software investment might fluctuate over time, complicating precise long-term calculations.

External variables

Economic conditions, competitive pressures, and shifts in customer behavior can impact software investment effectiveness, introducing variables beyond the contact center’s control. For instance, economic volatility, inflation, and geopolitical tensions can affect consumer demand and spending patterns, reducing call volumes and impacting cost savings and productivity improvements. 

As businesses respond to supply chain disruptions and changing sentiment, the need for adaptable, resilient contact center solutions becomes even more critical. Software that can adjust to evolving market demands and user needs provides a significant long-term advantage, helping businesses stay competitive and agile in a dynamic environment.

Attribution and measurement

It can be challenging to determine exactly which outcomes (e.g., increased revenue, cost reductions) are directly attributable to the software versus other factors, such as changes in workforce management or new business strategies. This “attribution” problem can lead to overestimating or underestimating the ROI.

Navigating these challenges requires a nuanced approach, often combining direct ROI metrics with qualitative assessments to capture the full value of contact center software investments.

How to maximize your ROI

For real return on investment, your business must move beyond just calculating  a formula, and address the factors behind the formula. Some of the key forces making your contact center a success will deliver value over time as well as meeting obvious operational needs. 

• Cost-benefit analysis: when calculating benefits, make sure to include all potential gains, like improvement in efficiency, and customer satisfaction.
• Total cost of ownership (TCO): Be realistic, and account for training, maintenance costs as well as eventual upgrades, but also think about additional benefits over time. 
• Feature prioritization: Identify high-ROI features like automation, AI, and omnichannel capabilities that can reduce operational costs or increase engagement

Key features contact centers should look for

Scalable cloud-based solution

Scalability is a major benefit of cloud-based infrastructure, matching the growth of your business while eliminating hardware costs. The ability to rapidly adjust to your changing needs keeps costs low. 

Cloud vs on-premise contact center: Why some are reluctant to move

Adapt quickly to changing markets with customizable features

Quick implementation of essential, innovative solutions is necessary for staying in the race. By choosing and deploying custom features swiftly, your company adapts to changing demands, ahead of your competitors and on top of your customer’s vendor list. 

VCC Live’s  in-house development team caters to this need, making sure we can deliver to your specific business requirements quickly. From our custom solutions you can already use features like in-call payments with PCI DSS compliance, or our growing omnichannel or AI-based capabilities, helping you stay relevant in a changing landscape and stay locked in to evolving customer expectations.

AI-driven automation

Specifically, features like our AI-enhanced automated workflows, predictive dialing with AI agent support, AI-enhanced Quality Assurance or IVRs can all make your agents more focused and efficient. Freeing up human capital for more complex queries, you will be able to handle tickets in a shorter time, improving your service quality and, at the end of the day, making your customers happier – or handling multiple tasks at once, bringing better results than before. 

Global reach – Supporting expansion

An international reach means tools like multi-language capabilities, multi-timezone handling, local site availability, and strategic partnerships become the norm. These features support seamless global operations, with high service quality and laying the table for eventual revenue- and market expansion. 

For instance, VCC Live’s expansion into South Africa has facilitated clients’ entry into African markets. 

Tbi bank achieved a significant efficiency increase—by at least 50%—after implementing VCC Live’s contact center software. The software effectively handled a large volume of calls, minimized unanswered calls, and provided real-time performance monitoring. The cloud-based solution also simplified operations and improved customer satisfaction through better query management and KPI monitoring.

Let’s talk ROI

Understanding ROI is just the first step. If you’re looking for tailored advice on optimizing your contact center’s performance, chat with one of our experts and explore how you can drive actual value for your business.