How to Calculate ROI of AI in Contact Centers

How to Calculate ROI of AI in Contact Centers

AI is transforming contact centers by making expensive processes more affordable and efficient. The big question for many teams remains: What’s the right way to calculate the ROI of AI?

In this guide, we’re going to walk you through what value AI brings and how to measure it.

What Is the ROI of AI in Contact Centers?

Before we get into the numbers, we need to define what we’re talking about when we say ROI in this context.

ROI – Return on Investment – is a measure of the value that AI brings to the company compared to the cost of the investment.

The formula is simple: ROI = (Net Benefits ÷ Total Costs) × 100

But in contact centers the benefits come from three key areas: savings, efficiency gains and new revenue streams.

Where Does AI Generate Value?

To figure out the ROI, you first need to know where AI is generating value.

Here’s how AI typically adds value:

First, by reducing operational expenses – AI automates routine tasks like answering common questions, tracking orders and dealing with basic customer queries. This shrinks the number of people needed to work with customers, reducing the cost per contact.

Second, by improving productivity – agents spend their time more efficiently dealing with difficult queries rather than mundane tasks, so their effectiveness increases dramatically.

Finally, AI generates extra income for businesses by providing customers with a quick and personal experience – this leads to higher retention and more sales.

Calculating the ROI of AI for Call Centers

Now that we’ve established the benefits, it’s time to calculate the ROI.

First, add up your total investment – this is going to include the cost of the AI technology, plus implementation, integration, and maintenance costs.

Next, look at your pre- and post-implementation performance – this will involve assessing average handling times, resolution rates, automation levels, and cost per interaction.

Third, quantify the financial gains – lower staffing costs, higher efficiency, and better retention rates all add up to the total gains.Then, apply the ROI equation: ROI = (Total Gains – Total Investment) ÷ Total Investment × 100

Key Metrics Driving the Return on Investment

To get an accurate calculation of the ROI, you need to be measuring the right metrics.

Average Handle Time (AHT) is a useful way to assess the efficiency of the process – any small improvement will add up to big savings.

First Contact Resolution (FCR) shows how effective your processes are when it comes to resolution – and prevents customers from coming back again and again.

The Automation Rate is the rate at which interactions are being handled without any human intervention – and is probably the biggest cost saver.

Cost per contact is the direct way to measure the financial side of things.

Customer satisfaction (CSAT) is how you link the improvements to revenue generation.

ROI Calculation Example

Let’s look at a practical example.

Assuming a contact center invests $110,000 a year in AI technology, it will bring in a total of $450,000 in value.

This results in a net benefit of $340,000 and an ROI of 309% – in other words, the investment is three times itself.

Time for ROI to Become Positive

When calculating ROI, you need to take into account not just the gains but also the time it takes to get to them.

On average, contact centers are able to break even in 3-12 months – but this can vary depending on implementation, integration, and optimization of the solution.

How Does This Work In Practice?

Let’s look at an example.

Consider a contact center handling 100,000 calls per month, at a cost of $4 each.

If the process is automated using AI and cuts costs by 40% at a relatively low cost, there will be a big saving in a short space of time. In fact, it could mean millions saved annually.

That’s how even small amounts of automation can be highly profitable with AI.

Overlooked Drivers That Impact Your ROI

Companies may focus on saving money, but there’s more to it than that.

AI minimizes agent stress by automating tedious work processes, so retention improves and costs related to recruiting and training agents are cut.

It also enables better decision-making for managers and optimization of performance.

And, it boosts your brand image by ensuring faster and more reliable customer service.

All of these elements have a big impact on ROI in the long term.

Optimize ROI

It’s worth noting that ROI doesn’t just happen automatically once the AI is implemented.

First, try automating processes with lots of repeatable tasks.

Second, make sure the AI solution is integrated with your company’s infrastructure to ensure seamless data flow. Last but certainly not least – keep on optimizing as your AI learns and gets better with time.

At the core of this is not just about cutting costs, but also becoming more efficient and laying the groundwork for real growth.

Get the Most Out of Your ROI

What if we told you that your call center could make huge profits thanks to AI?

VoiceSpin will help you automate your calls, reduce costs, and drive up performance in your contact center. And the best part? We do it all with AI-powered technology.

Schedule a demo today to see just how much your contact center could be raking in with the help of AI.

Frequently Asked Questions

How do you even calculate the ROI of AI in contact centers?

To work it out, you basically subtract the total costs from the total benefits, then divide that by the total costs and multiply by 100. What you should be looking at are the benefits – cost savings, efficiency gains & revenue – when you add them all up.

What are the key performance indicators (KPIs) you need to consider when calculating your ROI?

You want to keep an eye on average handle time, first contact resolution, automation rate, cost per contact, and – most importantly – customer satisfaction.

How long can you expect to wait for the ROI to kick in?

To be honest, businesses are generally expecting to break even (and then some) within 3 to 12 months of getting AI on board.

Is AI about nothing but cutting costs?

No way – AI is about cutting costs, sure, but also making your customers happier, improving retention rates, and discovering whole new ways to make money.

What sort of ROI is worth getting excited about?

For most people, any ROI above 100% is a good sign. We’re talking 200-300% or even more for some of our contact center customers.