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15 most important Customer Service KPI Metrics explained

15 most important Customer Service KPI Metrics explained
Edwin Maskell

12 min

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15 most important Customer Service KPI Metrics explained

Customer support metrics may be just as crucial as traditional company metrics when determining the long-run health of a company.

Jeff Bezos has gone public to say that "customers" are the foundation of any successful business. And so, what KPIs for CSM are worth obsessing over? Well, let's see...

This post will cover everything you need to know regarding customer satisfaction metrics, including:

  • Customer service is essential because it affects your bottom line.
  • Which are the most important KPIs for teams regarding their CS efforts?
  • A customer service KPI (Key Performance Indicator) Dash­board is a tool
  • Customer service KPIs are difficult to measure because they're so subjective.
  • What metrics can be used to measure the effectiveness of your customer services department?

Customer satisfaction is an essential metric for any business.

Customer service teams face a tough challenge: they must improve their bottom line by cutting expenses while maintaining high levels of customer satisfaction.

For customers, the importance of getting excellent service has never been greater. They're increasingly basing their purchasing decision on how they feel about the level of service they receive. Companies must make sure they're delivering the best possible service to their customers, so they need to track the performance of their customer service agents and understand where improvements can be made. In addition, companies should also monitor the performance of their agents to determine if any changes need to be made to their processes or agent training.

By focusing on the right metrics, you can better understand your team's strengths and weaknesses, which helps you improve them. We'll take a closer look at these metrics later in this post.

Which KPIs are most important for customer support teams?

Customer service managers need to know which key performance indicators (KPIs) their organizations are currently measuring and how well each is doing. Some are based on tangible metrics like response times, while others look at the overall satisfaction of your clients.

These are the 15 most important customer service metrics for any business.

1. Customer Satisfaction Score (CSAT)

Customer Satisfaction (CSAT) is an essential measure of whether satisfied customers are happy with a company's products or services. Companies often use surveys to find out why customers aren't satisfied. They can also use CSAT data to see if they're doing something right or wrong. For example, if a customer says he's not satisfied with his support experience, the company might want to know why. Maybe he had a bad experience during an installation, so the company needs to figure out why that happened. Or maybe the customer was having a bad day. In either case, the company should try to fix whatever problem caused the negative response.

2. Customer Effort Score (CES)

The customer experience (CX) refers to the overall quality of a company's customer interaction. It includes everything from the way a company interacts with its customers to the actual products or services they provide. CX encompasses both online and offline experiences.

You'll use customer feedback to help determine whether your business has a good Customer Engagement Score (CES). If your CES score is low, identify where there could be obstacles and friction preventing people from using your product or service.

3. Employee Satisfaction Score (ESAT)

Customer service has one of the highest turnover rates among industries. By measuring employee happiness, processes and teams, you can identify potential retention problems and avoid losing employees before they even start. Have regular 1-on-1 meetings, ask for feedback regularly, and encourage open communications between managers and staff.

4. Number of total tickets sold per customer

The most straightforward KPI for consumer service teams is tallying up the total number of customers who submit support tickets. This metric tells us whether we're doing our job well or poorly. But it doesn't tell us much about what's happening inside those numbers.

In addition to tracking the top line figure, you'll want to look into analyzing to identify how volume fluctuates based on times of day (peak hours), day of the week (weekends vs. weekdays), or based on seasons. You can't just take a single number at face value; you need to understand if you're getting more service requests because of problems with your product or service or because you're getting more customers.

Tracking customer tickets can help inform resource allocation through the lenses of long-term vs. short-term needs. For example, suppose there are spikes in traffic during certain times of the month or season. In that case, you might consider investing resources to improve your onboarding process or add additional resources to handle the increased demand.

5. Volume by Channel

To track where your customers are coming from, use tools like Google Analytics so you know which channel they're using to reach you. Then, automate specific tasks for these channels (e.g., email marketing) and prioritize them by their potential return on investment.

For example, companies generally have prioritized social media messages over emails for support purposes. However, a recent survey discovered that people prefer to use emails for support than any other channel. Therefore, you can prioritize and shift resources accordingly by measuring which channel gets the most tickets.

6. First response time (FRT)

First reply time (FRT), also known as first response time, is one of the most critical metrics for companies providing customer support. A recent study found that 65% of people are willing to pay $25 extra monthly for a company that provides faster responses to questions. 73% of respondents ranked "valuing my time" as the number one factor when choosing a provider. This makes it essential to measure and improve first response times.

Across the board, first response times must be a key focus area. For example, some industries, such as financial institutions, require extremely high accuracy and precision in responding to requests. Others, like e-commerce providers, must respond quickly to ensure that customers don't abandon carts due to slow responses. Still others, like consumer electronics manufacturers, must respond quickly to address issues before they become widespread.

Regardless of industry, it's essential to understand the type of customer communication sent out from each department. Email, chat, phone calls, social media, etc., certain types of messages take longer to send than others. Some messages, like those requiring human interaction, are much harder to automate.

For example, if a customer asks about shipping options, it's much easier to automatically answer via email or chat than to make a phone call. However, a customer asking for technical support might benefit more from a live agent than an automated system.

If your company uses autoresponders, you may need to redefine a new KPIs that measures "first impactful response time."

7. Average Handle Time (AHT)

Getting back to your customers quickly after they contact you is one of the most important things you can do. However, the length of the average hold/wait times and back-and-forth interactions, plus the number of follow-up actions needed to complete each task, are just as important.

You can minimize ATHT by reducing customer wait times and optimizing each back-to-back interaction. Hybrid support models can significantly improve these results, like human + AI vs. pure humans.

8. First Contact Average Resolution Time

You do not want your customers to have trouble contacting you. That can lead to frustration and ultimately lower customer satisfaction. Measuring first-time help desk contacts help determine if your team is performing correctly. They cannot provide immediate assistance if they require multiple attempts before reaching someone who can assist them.

You can use the "check a box or select from list" method to measure first contact average resolution time, but we recommend following up with your customers after leaving your site to see if their issues were resolved.

Average response times measure the effort it took to solve an issue. In contrast, first-call resolutions measure the effort required to provide a solution within the first attempt at contacting a customer. However, suppose you're in a business where your customers' needs escalate or move to another department. In that case, average response times take the proper view of your overall success from your hands.

9. Cost Per Resolution

Understanding how much it costs to solve a single issue is essential. Not just for operational purposes but also because understanding how much it cost to fix one problem helps us determine whether we need to invest in new technologies like artificial intelligence (AI).

To calculate cost per conversion, take your total monthly expenses (salary, technology, licensing, overhead, office supplies) and divide it by the value of each conversion. If you see it going up, you might want to invest in new tools or processes. For example, if you're using an agent desk platform, you may get better results by switching to something else.

10. Top Topics

Analyzing the topics and reason for ticket requests gives insight into the type of issues customers face and helps you identify opportunities to improve your support team's response time and communication skills. You'll be able to spot opportunities to communicate with customers during their entire journey proactively so they don't encounter any surprises.

For example, suppose there are many customer support issues related to a specific piece of software three months after its release. In that case, your company might be able to offer some proactive advice on how to avoid these types of problems in the future.

11. Consistent Resolutions

When you think about In-N-Out, you probably remember visiting them at some point. You may even recall the consistent experience you had there. As for the burger itself, you may be unable to say exactly why you liked it. But you knew you did.

We've conducted customer surveys and found that consumers want companies to strive for consistency in providing excellent services. Providing consistent resolutions is an essential aspect of maintaining a loyal following.

Use artificial intelligence (AI) to identify inconsistencies among agents' responses to similar queries.

12. Net Promoter Score (NPS) As A Customer Service KPI

Net Promoter Score measures customer loyalty and the likelihood of a person recommending a business. It's calculated by looking at an individual's response to a single survey question: "On a 0-to-10 point Like rating, how likely are you…."

Peer recommendations hold so much sway in our society obsessed with social networks that they're often considered indicators of growth potential.

13. Customer Retention

You should monitor the success of your customer service team. How often do they resolve issues without having to escalate them? Do they handle the same customer across channels consistently? Is there any evidence that they can retain customers after resolving an issue? These questions can help you identify areas where you might improve your customer experience.

Customer retention is an essential KPI because it shows whether your business has satisfied its customers, which affects their future decisions regarding your brand.

14. Employee Turnover Rate (ETR)

To keep an eye on the employee turnover rate, you must closely monitor your agents' performance. It may be expensive to replace them, but if you're losing too many agents every year, you might want to consider hiring some additional staff members.

15. Top Performing Agents

To get started, you'll need to identify which of your team members has the best overall customer service skills. Then, ensure that your CRM system allows you to drill down into each member's performance so you can focus on training them specifically.

A customer service dashboard is a tool that helps you track essential metrics related to your customer.

Customer service KPIs Dashboards are places where managers can view data in accurate times - whether it's CSAT, response times, or effort scores. Data is presented in charts or graphs and continually updated, allowing managers to understand precisely how their teams perform. Within a dashboard, you can examine how they're performing over a year. And if you hire new employees, implement changes in policies or procedures, or utilize technology like AI, you'll be able to determine how performance is impacted quickly.

You can either use an existing dash­board, or you can access out-of-­the-­box data plat­forms from agent desk soft­ware like Salesforce, Zenda­sk, Gla­dly, or Freshdesk, amongst oth­er customer support tools.

What makes achieving top customer service KPIs hard?

Customer service teams are under pressure from multiple directions at once. They're facing an increase in demand for their services, they have to deal with new technologies and processes, and they're dealing with increased customer expectations.

1. Elevated Customer Expectations

It's becoming increasingly difficult to meet today's consumer expectations for speed, convenience, and high-resolution resolution on their terms. Many companies have been attempting to improve their support, but nearly half of American consumers haven't experienced any improvements in support over the past year. Nearly one in five Americans report that their support has gotten worse.

2. Conversation Juggling

As ticketing systems become increasingly complex, agents on digital channels often juggle several simultaneous conversations. This makes them vulnerable to distractions and errors.

3. Information Silos

To fully solve customer issues with personalization and contextual awareness, customer service representatives need to gain insight into their customers' needs from multiple sources. This means they need additional training and tools to help them accomplish this task.

4. Angry Customers

An agent can be considered a punching bag if they deal with rude people constantly complaining about everything. They are often mistreated because they are not allowed to speak back to the customer. They also have to put up with rude comments from other passengers. In my opinion, an agent should not take any insult from anyone. They need to remain calm and polite no matter what happens.

5. Avoiding Crises and Ticket Surging

During the COVID-19 outbreak, customer support teams had to deal with a surge in traffic, changing policies, and new remote working conditions. Most organizations stopped tracking customer satisfaction at this point because they were trying to get back to their customers, which could take days. When a crisis strikes, it's challenging to maintain the same quality of services previously offered, significantly when a human-only team is affected by new working conditions, external pressures, and stresses. It cannot scale output as volumes increase.

6. Not measuring customer service KPIs correctly

It may seem very basic, but you need to have the right tools in place to be able to analyze the performance of your customer service platform. If you're using multiple engagement channels, ensure all of these data sources are integrated into one dashboard to get an accurate picture of how well your support engine is doing.

How Can You Improve Your Customer Service KPI Metrics?

To achieve these goals, there are three specific steps that firms can take to improve their customer service KPIs:

1. Hire More Humans

Most people who call customer service centers do so because they're having problems with something. They may not know what is causing them trouble, but they're willing to pay someone else to help them figure out how to fix whatever problem they face. To reduce your phone bill, make sure you only contact customer service if you have to. Don't just pick up the phone whenever you feel like it. Call only when you need to.

2. Outsource Customer Service

Hiring an external team to handle customer service is a common way for small businesses to cut back on costs, but you'll want to be sure to monitor their performance closely.

3. Use AI To Improve Customer Service Through Virtual Agents

Companies are starting to use artificial intelligence (AI) powered virtual assistant programs to help them improve service quality. These companies see an increase in metrics such as user satisfaction and retention rates.

Customer satisfaction survey results remain essential even if they aren't used anymore.

Adopting artificial intelligence (AI) can help improve customer service KPIs in two key ways:

  • AI can instantly respond to high-volume, simple questions like "What's the current status?" or "Can we get an RMA number?"
  • Augment human agency: AI can help humans perform better by collecting and analyzing information from a customer before handing off a service request. The AI can then package all relevant information into a single message that can be passed along to an employee who can quickly review, decide upon, and communicate with the customer.

How do you measure AI-powered virtual agents against human customer service representatives for meeting your business goals?

According to a survey conducted by Forrester Consulting, 77% of senior execs have already deployed conversational bots for after-sales and customer service. It'll be essential to know the relevant KPIs for these bots.

Whether you're tracking the progress of human or AI-driven virtual assistants, you need to keep track of the same key indicators. You know what I'm talking about if you've ever tracked employee productivity. Measure the impact humans and virtual assistants have on customer satisfaction, ticket closure rate, collaboration between team members, and the overall success of the automation project. This is an entirely new way of measuring the effectiveness of artificial intelligence (AI) customer support platforms. Virtual assistants are doing human tasks and should be measured accordingly.

Updated

November 16, 2022

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