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Allan Rowan
Allan Rowan 21 June 2022

Revealed - The 5 Biggest Communication Management Cost-Drains

With every day that goes by, outdated and unwieldy communication management processes are costing businesses money. We asked senior business decision makers to identify what they see as the biggest customer communication management related cost-drains. The first step to plugging the drain is in identifying where communication processes are falling down. Take a look at the findings here – you may recognise one or more of the challenges.

Legacy production and distribution methods may ‘get the job done’ but as technology moves on and customer demands evolve, relying on the status quo is an increasingly risky and expensive strategy.

But what are the biggest cost culprits when it comes to the businesses of communicating with customers?

We recently conducted a survey of senior decision-makers across the financial services, utilities and retail sectors to establish where these leaders see communication cost-drains within their businesses and throughout the wider market.

The resulting feedback describes a domino effect whereby the failings of the systems and strategies that are being used to send and receive communications have an effect further down the line on employees and customers.

Identifying these cost-drains is the crucial first step to eventually plugging them. And only by plugging them can businesses move towards a customer communication management (CCM) operation that is flexible, cost-efficient and tailored to meet the demands of today’s “Age of the Customer”.

Here’s what the cost-drains look like.

Cost Drain 1: Inability to Share Information Quickly Throughout the Business

Customers don’t engage with businesses through just one channel. Multiple touchpoints with multiple departments create a matrix of interactions – and a whole host of challenges. Staying on top of the holistic big-picture is critical if businesses are to deliver speedy and intelligent service back to the customer.

But according to our survey respondents, information sharing between colleagues and departments is a real issue. This impacts performance and cost in two ways.

Firstly, expensive professionals are unable to work at maximum efficiency. Unnecessary time is wasted finding documents, repeating processes and checking back on past interactions. Secondly, the customer experience is put at risk. Responses are delayed, information accuracy is jeopardised. A poor experience will quickly result in customer defection – with an obvious impact on the bottom line.

Cost Drain 2: Over-Reliance on Manual Labour to Assist with Communications

Legacy processes rely heavily on manual interactions and our survey respondents recognise the drawbacks of such an approach. Lack of digitisation is hampering efficiency. Repetitive everyday tasks are still being completed by hand, despite the availability of proven tools.

Recent analysis from McKinsey[1] suggests that 39 to 58 percent of the worldwide work activities in operationally intensive sectors could be automated using currently demonstrated technologies.

Often, as a stop-gap solution to sudden volume pressures, businesses will throw more human resources at tasks to meet SLAs and deadlines. But simply adding more people to a broken process does not address the problem’s root cause.

The financial impact of outdated legacy processes is significant. According to market research firm IDC[2], companies lose 20 to 30 percent in revenue every year due to inefficiencies.

Cost Drain 3: Inability to Attract New Customers Due to Poor On-Boarding Processes

Inevitably, continued use of outdated legacy communication processes will eventually impact the level of service that businesses are able to provide to customers. As well as being expensive to run, legacy processes are difficult to scale and inflexible when it comes to evolving customer demands.

The on-boarding of new customers is a critical stage of any customer relationship. If the process is perceived to be clunky or inaccurate, potential customers will quickly move on. Today’s digital natives expect choice, speed and minimal effort. They want businesses to do the hard work for them.

New business is hard won in any sector. Analysts suggest that acquiring a new customer can cost five times as much as retaining an existing one. Those businesses losing prospects at the first hurdle will rapidly fall behind more nimble competitors.

Cost Drain 4: Employee Churn Due to Frustration with Communication Pace of Change

It’s not just the customer that suffers. Our survey respondents point to the cost-drain of staff churn as a result of outdated communications processes. Put simply, talented and experienced employees are frustrated at the lack of opportunities for growth within legacy operations. They want the businesses they work for to demonstrate a will and ability to evolve in line with customer expectations.

Finding good people is always a challenge and replacing them is expensive. Studies suggest that on average, once recruiting and training costs are taken into account, it costs a company between 6 to 9 months of an employee’s salary to replace that employee[3].

Cost Drain 5: Regulatory Fines as a Result of Poor Communications

Finally, respondents highlighted the startling cost implications of compliance breaches resulting from poor communication standards. It remains the case that some of the most highly regulated markets such as financial services and utilities rely most heavily on legacy processes to send and receive customer communications. Any failure can be catastrophic.

The Financial Conduct Authority handed out over £238 million in fines during 2021. And in the retail sector, studies put the average cost of a breach at over $3 million[4]. Little wonder that respondents are concerned.

The Fix – Plugging the Cost Drains

Taken together, these responses paint a picture of intertwined issues where one problem impacts another. The legacy model of manual processes, paper volumes, and bricks and mortar sites hampers the efficiency with which teams work. And if teams can’t work efficiently then communication quality will suffer, with obvious consequences in terms of compliance and customer satisfaction.

The good news is that by fixing a problem – by plugging a cost-drain – businesses can begin to see benefits permeate across departments and to the end-customer. Small steps can deliver big advantages.

Consider very obvious and commonplace CCM tasks such as cross-referencing customer actions with other departments; locating the most recent customer responses; editing and managing document versions; accessing audit trails and so much more. Removing unnecessary paper and manual intervention from these tasks through digitisation provides a very fast route to improved efficiency and lower costs.

The speed of change is worth emphasising. Outdated processes can be identified, assessed and automated in as little as eight weeks. Flexible plug and play platforms can be swiftly integrated without any additional burden on already overworked internal IT teams. Change can happen at a pace that suits, perhaps at a small departmental level, and then accelerated across an organisation once business leaders see proof of success.

The prospect of changing legacy ways of working can be daunting. The reality of doing so is much less challenging. Certainly, by not acting – by letting the status quo prevail – businesses will continue to see potential profits disappearing daily. Plugging drains now will deliver operational advantages long into the future.


[1] McKinsey: Jobs lost, jobs gained: Workforce transitions in a time of automation

[2] Entrepreneur: How inefficient processes are hurting your company

[3] The Society for Human Resource Management

[4] Statista

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