How Much Money Can a Knowledge Base Save Your Business

Knowledge bases are powerful new ways to offer information and help to your customers, improving your brand visibility and reputation while simultaneously improving customer retention. How are they able to do this?

The main benefit is a kind of automation introduced to the customer service process; rather than using human resources to walk customers through the same tutorials or the same troubleshooting steps on repeat, you use a centralized bank of information to help (almost) all of your customers simultaneously. With that infrastructure established, customers get help faster and more conveniently.

It sounds good on paper, but how can you calculate the real value of developing a knowledge base, rather than a hypothetical value?

Read More: Top 15 Knowledge Base Software and Tools

Estimating the Benefits

Until your knowledge base is up and running, you’ll need to work with estimates. Once you can start measuring your impact directly (in terms of things like traffic and actual costs cut), you can use cost savings calculators to figure out exactly how much impact your knowledge base has.

Let’s start by estimating the positive values, including cost savings and increases in revenue:

• Reduced labor needs. Assume that approximately three-quarters of your audience will try to solve their issues using a knowledge base before they pick up the phone to call a representative (the real number is over 80 percent, based on averages). If even two-thirds of people find the answers they’re looking for, that means 50 percent of your total inbound customer service inquiries will be instantly resolved. That means you could potentially cut your customer service workforce in half, or utilize that portion of the workforce for other, more profitable tasks.
• Lower customer turnover. Customers who can rely on a consistent, helpful knowledge base will be less likely to run into issues with your software or services. They’ll continue being your patrons, happily, and turnover will begin to plummet. Obviously, this relies on your knowledge base being effective in its primary goal of helping your customers.
• Fewer returns. About 8 to 9 percent of items purchased at a physical retail store end up returned, as are nearly 30 percent of items bought online. Again, if even a fraction of customer complaints and questions could be answered proactively with a knowledge base, you could drastically cut this number. Returns are expensive, and also indicate a less-than-stellar customer experience.
• Less staff turnover. Dealing with highly repetitive customer inquiries is tiresome for your call center staff. Many call center employees spend hours each day resolving the same types of problems and issues, and over the course of weeks or months, it can lead to burnout. Substituting a AI knowledge base to handle the most basic types of queries spares employees the need to handle them personally, leading to higher job satisfaction and less employee turnover.
• More customer knowledge. When customers have access to a knowledge base, they’re more informed. More informed customers make better decisions, and when they have to call a human representative, they are more equipped with information that can steer the conversation in the right direction. This leads to faster resolutions, higher customer satisfaction, and all-around better experience.
• Higher online visibility. Don’t forget that building a knowledge base also gives you more high-quality content for your site, which can increase your online visibility. More, better content means you’ll rank higher in search engines, and you’ll have more linkable assets to share on social media as well. Not only does that provide bigger, fuller routes of traffic to your main site, it also creates shortcuts for customers looking to find specific information about your products and services.

The Cost

So what’s the cost of developing a knowledge base? That depends on several factors, including the complexity of your products and services, how many assets you currently own, your specific industry and customers, and how robust you want to make your platform. Building the foundation of a knowledge base is labor-intensive no matter what, requiring dozens, if not hundreds of hours of work, but once that foundation is in place, ongoing maintenance can likely be reduced to a single worker’s responsibility (again, depending on the complexity of your system).

That being said, it’s likely you’ll be able to create a knowledge base for $10,000 or less, with ongoing maintenance costs equivalent to one writer or developer’s salary. For the massive benefits you’ll see, that cost is practically negligible.