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“It takes years to build a reputation but just moments to ruin it.”
The above quote effectively addresses the importance of keeping clients happy. Customer service is a vital element of business processes that can impact your bottom line and affect how your company is viewed in the public eye. So, it becomes crucial to measure customer service KPIs and metrics.
Where modern business is very much aware of the fact that providing a positive experience dramatically impacts business growth, excellent customer support is equivalent to being featured in Barron’s magazine.
Hence, your major strategies must focus on how to measure customer service satisfaction and deliver a great experience.
What is a KPI in Customer Service?
A Key Performance Indicator (KPI) in customer service is a measurable metric used to evaluate the performance and effectiveness of a company’s customer support processes. These indicators are crucial for monitoring and improving various aspects of customer service. It ensures that it aligns with organizational goals and meets or exceeds customer expectations.
KPI for customer service provides insights into the quality, efficiency, and overall impact of the support provided. They help businesses track specific metrics that directly relate to customer satisfaction, issue resolution, and the overall customer experience. Tracking key KPIs can help a business understand its own and their customer health score.
Why is It Crucial to Measure Customer Service KPIs and Metrics?
Customer support metrics and KPIs are valuable because they provide a look behind the scenes at how businesses interact with customers. You might think the service being delivered is the best of the best, but your customers might perceive things differently. 70% of consumers say that they choose companies that deliver great customer service.”
Let’s take a look at the five most crucial reasons why measuring customer service KPI metrics is essential:
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Customer Satisfaction (CSAT): You should assess how satisfied customers are with the service and provide a direct measure of overall customer experience.
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Customer Retention: Don’t forget to monitor metrics like churn rates and repeat business to help measure the effectiveness of customer service in retaining the customer base.
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Operational Efficiency: There are some metrics such as response time and resolution time evaluate the efficiency of customer support operations for better customer experiences.
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Identifying Pain Points: Metrics highlight specific areas where customers face challenges. It aids in the identification and resolution of pain points in products or services.
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Continuous Improvement: Your regular measurement and analysis of customer service metrics enable businesses to identify trends and implement continuous improvement strategies to enhance service quality over time.
How to Design a Usable Customer Service KPI?
Designing usable KPIs for customer service involves careful consideration of the specific goals, objectives, and customer service processes of your organization. Here’s a step-by-step guide to help you design usable and effective customer service KPIs:
1. Define Clear Objectives
At first, you have to identify the primary goals of your customer service team. Whether it’s improving customer satisfaction, reducing response times, or increasing first-contact resolution, clarity on objectives is crucial.
2. Align with Business Goals
Always try to ensure that your customer KPIs align with the broader business goals. You’ll have to understand how customer service contributes to overall business success and helps in selecting relevant and impactful metrics.
3. Identify Key Customer Touchpoints
You need to determine the critical points in the customer journey where interactions with customer service are most likely to occur. You can tailor KPIs to measure performance at these touchpoints.
4. Select Meaningful Metrics
Choose KPIs that provide actionable insights. Consider metrics like Customer Satisfaction (CSAT), Net Promoter Score (NPS), First-Contact Resolution (FCR), Average Response Time, and others that directly relate to customer experience and service efficiency.
5. Set Specific and Measurable Targets
Establish specific, measurable, and realistic targets for each KPI. Having clear benchmarks helps in assessing performance and progress over time.
6. Consider a Balanced Approach
You can create a balanced set of KPIs that cover various aspects of customer service, such as quality, efficiency, and customer sentiment. A well-rounded approach ensures comprehensive performance evaluation.
7. Focus on Customer-Centric Metrics
You should prioritize metrics that reflect the customer’s perspective, such as customer satisfaction and Net Promoter Score. These metrics provide insights into how customers perceive and value the service they receive.
8. Ensure Actionability
Choose KPIs that can lead to actionable improvements. If a metric highlights an issue, there should be a clear path for the customer service team to address and resolve the underlying problem.
9. Use SMART Criteria
Your KPIs adhere to the SMART criteria – Specific, Measurable, Achievable, Relevant, and Time-bound. This framework helps in creating KPIs that are well-defined and aligned with organizational goals.
10. Regularly Review and Adjust
Customer service dynamics may change over time, and so should your KPIs. You need to review the effectiveness of your chosen metrics regularly and be prepared to adjust them to better align with evolving business objectives and customer expectations.
7. Leverage Technology and Analytics
You can utilize technology and analytics tools to collect and analyze relevant data. In this case, automation can streamline the process of tracking KPIs and provide real-time insights for informed decision-making.
11 Customer Service KPIs and Metrics That Propel Your CX Team
Customer service KPI metrics help businesses monitor and analyze customer relations by considering their overall journey. When a business knows how to analyze customer data, it can get better insights into customer preferences and behavior.
Below is a list of important KPIs for customer service evaluation and acquiring actionable feedback. Let us discuss the key metrics on how to measure customer service success with higher accuracy.
1. First Response Time (FRT)
A delay in the response time might result in customers leaving your website. 59% of customers are likelier to buy when brands answer their queries in under a minute. Getting connected to an agent immediately definitely helps to improve the customer experience.
Average first response time (FRT) refers to the time between the chat made by the customer and agent responses. Higher scores from customer service evaluation indicate that your agents are enthusiastic about attending to customers.
How FRT is one of the important customer support metrics?
- It acknowledges the customers that their issues are being looked into as a priority.
- The service metric indicates the promptness of your team’s issue addressing.
- With this KPI, you can learn if your team is sufficient or needs to add more resources.
How to calculate the first response time?
You can use the below formula to find out the customer service matrix, which helps you to identify the quality of service your clients experience when they reach out to your support agents for assistance.
Best Practices:
To reduce your response time, you must either scale your support agents or implement a chatbot. Chatbots can handle basic queries 24×7 when your agents are busy or unavailable, which reduces the number of support tickets raised and human handovers.
2. Customer Retention Rate (CRR)
The average global value of a lost customer is $243.
Acquiring new customers indeed improves your brand image, however, retaining them for longer-term shows that you have developed trust & loyalty with the customer retention strategies.
Higher CRR is the result of a great customer service experience. If you deliver services that are consistent and predictable, the lifetime value to the customer increases significantly.
How to measure the customer service metric?
Jeff Haden provides the best way of evaluating customer retention rate KPI by using the below formula:
Customer Retention Rate = ((CE – CN) / CS)) x 100, where
- CE indicates the number of customers at the end of the process,
- CN means the number of new customers acquired during the process, and
- CS stands for the number of customers at the beginning of the process.
Best Practices:
Every business focuses on improving the retention rate, and that’s why it should be amongst the main customer support metrics to measure. A general positive brand image and high satisfaction score will directly increase your customer retention graph.
3. Customer Satisfaction Score (CSAT)
CSAT helps to evaluate the client’s service satisfaction with your business, products, or services. You can measure customer service satisfaction helps to gain insights into what they think about you.
You can directly ask your customers to rate their satisfaction across different communication channels such as live chat to collect real-time customer feedback as a form of survey. Your score is the average of all customer responses.
You can ask CSAT questions like:
- How would you rate your satisfaction with our product or service? (Answers can be Very Satisfied, Unsatisfied, or Somewhat Satisfied)
- Were you satisfied with our product or service? (Yes/No)
- On a scale of 1-10, how satisfied are you with _?
Your CSAT scale can include regular numbers, stars, smiley faces, etc. There is no unified measurement of satisfaction score but that being said one could execute the below formula to determine the proportion of satisfied customers:
Where:
- Promoters are customers who rate their likelihood to recommend as 9 or 10 (on a scale of 0 to 10).
- Detractors are customers who rate their likelihood to recommend as 0 to 6.
- Passives are customers who rate their likelihood to recommend as 7 or 8.
Best Practices:
The higher the CSAT score, the better your customer satisfaction. You can implement ways to collect qualitative and quantitative feedback, that help you know the areas working well and the gaps that need to be improved.
4. First Contact Resolution (FCR)
The Ascent Group shows that 60% of companies that measure FCR for 1+ year report a 1 to 30% improvement in their performance.
First contact resolution (FCR) helps measure customer satisfaction, the higher your FCR rate, the more satisfied your customers tend to be. It is a key factor that drives customer loyalty and also measures your agents’ efficiency in resolving an issue on the first interaction.
The FCR performance indicator gives you insights into how good your agents are at understanding and addressing customer issues without needing multiple interactions.
For example, speech analytics can have a great impact on FCR and Aberdeen released a speech analytics benchmark study, in which it tracked two groups of contact centers: the “leaders,” which represented 30% of the sampled group, and the “followers,” which were defined as the bottom 70%.
Surprisingly, the leaders using speech analytics averaged a 76% FCR rate comparatively, the followers had a 23% average FCR.
Best Practices:
The first interaction is very important for every business. You can optimize the FCR metric by training your customer support team to improve their communication skills and deliver quality service. You can provide live chat scripts and customer surveys to improve resolution in the first interaction itself.
5. Average Resolution Time (ART)
Fast resolution is always a stable determinant of customer satisfaction. Every customer expects a quick consistent support experience. Addressing customers’ queries in real-time is imperative for you to keep them from leaving you at risk.
Average resolution time (ART) refers to the total time taken by the team to resolve the support ticket once it is looked upon. It is measured in days or online hours. The lower the resolution time, the higher the customer satisfaction.
How can you calculate the average resolution time?
With the help of the simple formula, you can carry out customer service evaluation. You have to divide the sum of all times to resolution by the total number of cases resolved. It will give you the average resolution time of your team.
Best Practices:
When the average resolution time is low, the customer satisfaction level is high. When the resolution time is higher it indicates FCR that reduces the number of customer interactions to get the problem resolved.
6. Cost Per Conversation
Finding out the percentage of customer support costs of your total revenue is one of the most important KPIs for customer service. When you compare the support costs in terms of your revenue it helps you to evaluate how much your service efforts represent compared to your total revenue.
Every business focuses on delivering the highest quality customer service at minimal costs. So, it is essential to track the below components
- Resources – in terms of salary costs
- Infrastructure costs
- Training and managing the team
You can easily calculate it by dividing the total support costs by the number of issues. You will get to know how much individual support costs to your business.
Best Practices:
It is an inevitable fact that support costs can be managed by a well-trained team and adjusting the staffing schedule according to your business needs. When you measure this customer service metric over time and analyze how your trend is – if the percentage is unusually high. It is suggested to find out the key reasons and plan strategies.
7. Average Conversion Rate
Forrester report says 44% of online customers having questions answered by a support agent during the buying journey is one of the most important features of a website.
The average conversion rate refers to the number of visitors who have completed their actions successfully on your website. The higher the conversion rate, the more successful are your campaigns for business growth.
Communicating with the customer at the moment by answering customers’ queries can mean the difference between a sale and a bounce.
How can you track the average conversion rate?
Conversion rate = (Conversions / Total visitors) * 100%
Say, if your website had 200,000 visitors and 10,000 conversions last month, your conversion rate is 10%.
Best Practices:
Tracking your business conversion rates is essential. It provides analytics and helps to gain insights from the data collected. The insights can be used further to engage customers in the right way and improve sales conversion.
8. Net Promoter Score (NPS)
It is widely used to measure the loyalty of a company’s customer relationships. It measures your client’s experience and assumes the growth of your business.
With the help of the NPS score, you can know how likely your customers are to recommend you to their friends and relatives. NPS replies are less influenced by the customer’s mood, unlike CSAT which aims at emotion, not intention.
You can find out your NPS with the help of the key question with an index on a scale from 1 to 10. “How likely is it that you would refer to the brand?”
Customer responses can be categorized into three categories:
- Promoters (9-10) – They are your loyal customers who will continue buying from you and refer others with good word of mouth.
- Passives (7-8) – Passives are your satisfied customers but are vulnerable to competitive offers and deals.
- Detractors (0-6) – These are the unsatisfied or unhappy customers who negatively impact your brand through negative word of mouth.
How is NPS calculated?
It is calculated by taking the percentage of promoters (9-10) out of the total respondents and subtracting it from the detractors (0-6).
Best Practices:
The NPS metric is just considered a good loyalty metric but it is also closely associated with increased business growth. So never miss out on a single opportunity to take your business to the next level.
9. Customer Effort Score (CES)
Customer Effort Score (CES) is a customer experience metric that measures how easy it is for a customer to do business with you via a CES survey. You can ask customers to evaluate their experience with your products and services.
The customers will rate you on a scale of 1-5 based on how much effort it takes to complete a transaction, resolve a support issue, and otherwise interact with your company/product online or in person.
Best Practices:
Like NPS, the CES is also directly associated with satisfied customers and business growth. So, put your best effort so that the score is the lowest on a scale of 1-10.
10. Analysis of Channel Performance
With the evolution of new customer service trends and technologies, businesses are going omnichannel to deliver better conversational experiences. With these insights, businesses can communicate with customers over their preferred channels such as websites, phone, email, social media, etc.
Suppose, you receive 100 support requests per month. But, if you do not know the channels from where the customers are reaching out to you, it becomes haphazard. So, measuring these channels to evaluate the performance individually is very important.
For eg, Out of 100 requests, 40 are from Live Chat, 20 are from Facebook Messenger, 10 are from email, 20 are from the phone, and 10 are from Telegram. The breakdown performance of the channels helps you to know which channel is effective for your business.
Best Practices:
You’ll have to figure out the most effective communication channels for your business. Accordingly, you can improve the channels with low performance and maintain the service standard at the high-performing channel.
11. Abandoned Call Rates
You know abandoned call rates are a major part of measuring KPI for customer satisfaction. Long queue time is one main reason why customers abandon. When customers have to wait for a long time to get in touch with the agent, it becomes frustrating for them.
Measuring this KPI for customer service helps to implement the right strategies to deliver real-time proactive support to clients and improve their experience. Adding the service metric to your scorecard helps you spot if this is happening, so you can find out what’s holding your agents up.
Best Practices:
You always have to understand your customer’s expectations and deliver support to enhance their satisfaction and reduce abandoned rates. The lower the call abandoned rates means higher customer satisfaction.
5 Best Practices for Achieving Customer Service KPIs
Achieving success in KPI for customer service requires a strategic approach and a commitment to continuous improvement. Here are five best practices to help you excel in meeting and exceeding your customer service KPIs:
1. Define Clear and Relevant KPIs
You need to start by clearly defining your customer service goals and objectives. You can align KPIs with these goals to ensure they are relevant to your organization’s overall mission. Also, you need to avoid overwhelming your team with too many KPIs; focus on the ones that truly reflect customer satisfaction and business success.
2. Empower and Train Your Team
You can provide your customer service team with the necessary tools, training, and empowerment to meet KPIs effectively. Equip them with the skills and knowledge needed to handle customer queries efficiently, resolve issues promptly, and contribute to positive customer experiences.
3. Regularly Monitor and Analyze Data
You’ll have to implement a robust system for collecting and analyzing customer service data. Real-time analytics can help you make informed decisions. And, it enables proactive adjustments to strategies and processes.
4. Implement Customer Feedback Loops
You can establish mechanisms for collecting and analyzing customer feedback. Utilize surveys, feedback forms, and social media channels to understand customer sentiments. This feedback not only provides insights into customer satisfaction but also helps in identifying specific areas where improvements can be made.
5. Encourage a Customer-Centric Culture
You need to foster a culture within your organization that prioritizes KPI for customer satisfaction. You’ll have to ensure that every team member, from frontline staff to executives, understands the importance of customer service KPIs. Recognizing and rewarding their efforts that contribute to positive customer experience, can reinforce a commitment to excellence.
Measuring Customer Support Metrics and KPIs is Vital to Delivering a Great Experience
Customer service KPIs and metrics are crucial for delivering a great customer experience. It allows businesses to gauge customer satisfaction, retain loyal customers, ensure operational efficiency, identify and address pain points, and continuously improve their support processes.
These metrics provide valuable insights and help companies to enhance their services and build long-lasting relationships with their customers.
With REVE Chat, you can start a free trial of feature-rich customer support software and redefine your customer service.
