How to Measure Customer Service Performance - Top KPI examples
If you are running a successful business, you probably know how important reputation is. The positive experience of your customers will dramatically impact your company's growth and public reputation. Building your reputation can last for years, and it can be destroyed in a moment. That's why you should regularly check if your customers are happy and satisfied, and if your customer service is performing successfully. Customer service is one of the essential elements of every business, and it can affect your ultimate success or failure.
With the right set of KPIs, you will be able to measure your performance and make strategic decisions towards your overall company's goals. The major strategies for measuring customer service are focused on instantaneous response and living up to customer expectations.
You should measure your customer service often, because measures will tell you how good your company is performing, what your customers think about your services and products so that you can change and adjust everything that can be improved, to accomplish the ultimate success of the company.
Key performance indicators represent a measurable value that will show you how efficiently your team and all your employees are acting towards the company's goals.
There are many valuable metrics that you can measure within your customer service department. Still, only the vital ones will show you how well your customer service team is performing towards the company's goals, and only those can be called key performance indicators.
Key performance indicators can be used on multiple levels to evaluate the improvement of your organization, and there are two main categories of KPIs. High-level key performance indicators are focused on the overall success, while low-level KPIs are more focused on everyday activities your company is performing.
With the right set of KPIs, you will be able to follow your progress towards objectives and make excellent strategic decisions that will guide you to success. But if your KPIs aren't right or you use them in the wrong way, they can be devastating for your company! Always make sure your KPIs are:
- Aligned with your strategic goals
- Showing you exactly where to concentrate your efforts and resources
- Measurable against objectives
Always make your key performance indicators quantitative, because that way, you can compare them to your historical data and other values for more apparent results of improvement. KPIs can be qualitative, but this method isn't recommended because it can start confusion and personal interpretations of data.
Top Customer Service KPIs Examples
With KPIs, you will know if your customer service is performing well, and you will be able to keep your customers happy and satisfied. There are many different key performance indicators you can use to measure the performance of your customer service department, depending on your company's objectives, targets, and type of business. We gathered multiple KPIs, with examples you should consider using to measure your performance within the customer service department.
KPI: Average Response Time
How long your customers wait for a call on hold?
This KPI measures the average time spent between a time when a customer calls to the moment when your customer service representative responds to it.
Average response time is one of the crucial KPIs in customer service because the waiting time is one of the main factors of complaints by customers, and by tracking its improvement, you can evaluate your department's performance.
Quick response time is a reflection of respectful interaction with your customers, and it can leave an excellent impression of your brand. When customers call you, they already have an issue with your product or service. If they spend too much time waiting for a response, it can make them even more frustrated or disappointed, which will lower down your reputation even more.
In general, a third of customers hang up the phone after just one minute on hold, while two-third will hang up after three minutes. Everyone in customer service department knows that these missed calls have their price, and you will pay it either from the financial aspect or your company's image and reputation will be endangered.
The goal is to keep your average response time as low as you possibly can. What actions can you take to lower the average response time? The first step is to have enough available agents for your predicted demands, which you can see by tracking other customer support metrics and check your daily, weekly, and monthly demands. If your response time is too high, consider hiring additional agents for your customer service support.
KPI: First Call Resolution or FCR
Avoid callbacks for the same issue from the same customer
FCR is also one of the most important customer service metrics you should track. With this metric, you can measure the efficiency of your customer support to resolve a customer's problem on the first call. FCR will show you how well your team can manage, address, and solve the problem without the need to transfer or return the call.
What actions can you take to improve the first call resolution rate? You can train your representatives in their communication skills, giving them scripts and customer surveys, and determining a precise process needed for an excellent outcome. Also, consider gathering all customers' issues and how they got addressed in a knowledge base. With this step, you will implement a knowledge base, so your team is prepared for all known issues in advance. This step may require more time, but in the long run, it will cost you less time and money in the future.
An excellent first call resolution rate will raise the average handle time or AHT KPI. Still, that doesn't necessarily mean you will have a problem because an extended customer interaction that reaches FCR means lower AHT rate, then various calls with a frustrated customer.
KPI: Top Support Agents
Discover who is your star agent in the team
You should pay attention and evaluate the performance of your agents as well. There are multiple customer service metrics that can show you the productivity of your employees, such as their individual first call resolution rate, the average number of calls per hour, and the customer satisfaction survey.
By measuring the performance of your agents, you will be able to determine the best candidate who is capable of becoming a manager or which employee needs some extra training.
However, when it comes to quality metrics, not everything is black and white. Don't jump to conclusions right away, because sometimes even when the metrics are showing you the agent is performing bad, it can be due to some activities he couldn't affect on. Maybe he or she got unlucky and had to deal with numerous frustrated customers, who might have been frustrated for some unrelated reason, and that agent got rated negatively.
Before you make any decisions, track those metrics we mentioned above for at least several months for accurate ranking.
KPI: Number of Issues
Observe the number and nature of issues over time
Track and measure the number of calls, different requests, and problems your customer service receives over time, so you can have an insight into your team's needs and plan a strategy in advance. By doing this, you will be prepared for any overwhelming periods your team comes across, and you will be able to adjust your team. You don't want to have frustrated employees and customers at the same time, because the result can be harmful to your company.
Divide your customer service on multiple communication channels, because different customers like different ways of reaching the support service. By doing this, you will also be able to separate your agents into different communication levels, assigning a bigger number of representatives where it's necessary.
Regardless of your company's success, or great products and services, issues are always present. If you can resolve them instantly and satisfyingly, it's a sign of excellent service.
KPI: Customer Satisfaction Score or CST
Get insights on what your customers' think about you
This is the most important metric regarding customer service because every business strives to happy and satisfied customers.
You may not be aware, but some of your customers are repeatedly facing certain issues, and this can have a very negative impact on your business, leaving your customers with a negative impression of your products or services. A satisfied customer recommends products or services at least to three friends. In contrast, the frustrated customer will cause a lot more damage to your company, just by writing a bad review at your site, or their negative review appears somewhere on Google.
In order to avoid a negative reputation, frequently conduct satisfaction surveys. You can implement the surveys at the end of every call, send e-mails, or you can implement it into your applications. There are numerous ways you can ask for feedback about your services or products.
The higher the customer satisfaction rate is, the better.
KPI: Net Promoter Score or NPS
Assess the power of your referrals
Will you recommend our products or services to a friend or colleague? This question is required if you want to measure your net promoter score.
How to calculate your NPS? Divide your responses into three groups. In the first group are answers from zero to six, and those are detractors. The second group contains answers from seven to eight, and those are passives, while answers that are scaled nine and ten are your promoters. Once you've done this, calculate the following equation: % of promoters minus % of detractors equals your NPS. Compare your results with competitors if it's possible, and if they have a much higher rate of NPS, take actions to boost it, and improve your services.
When you're comparing your results with competitors, keep in mind that specific sectors and industries have different ranking scales, so choose companies in your niche of business.
Analyze your data to understand where your obstacles are and identify areas that need to be improved. Use your customers' feedback and try to find solutions for any mentioned problems!
The net promoter score is not just a loyalty metric. It's also related to your increased company growth. The higher NPS is, the stronger the possibility of many new customers is, and ultimately this means more profit and company development.
KPI: Customer Effort Score
Get valuable feedback on the customer experience
This KPI is especially important when it comes to SaaS or Software as a Service businesses. Knowing how easy it was for your customers to get what they needed from your products or services is an excellent indicator of their experience.
The lower your customer effort score is, the better. If your score is high, that means your customers had difficulties when they tried to use your services, and this often leaves them very frustrated. You don't want your unhappy customers leaving bad reviews on your social media platforms, websites, google, etc. Also, if this KPI rate is high, your clients will most probably cancel their partnership with you to go for a rival's more user-friendly program.
On a scale one to ten, how easy and straightforward was our product or software for use? Depending on what your company is offering to your clients, ask a similar question to find out how much effort your clients had to take to use your service.
Same as net promoter score, your customer effort score is directly related to the satisfaction of your clients and, therefore, your company's growth and profit. Logically, the lower the customer effort score, the better the outcome.
KPI: Customer Retention
Estimate how many clients are coming back
Loyal customers have a fundamental role in your company's success. You can calculate customer retention by dividing the number of customers who make repeated purchases by the total number of your customers. Acquiring new customers costs more than retaining the one you already have a connection with.
By maximizing the customer retention rate, you will decrease expenses, or you will be able to assign them to other channels in order to develop your business.
The customer retention rate varies depending on the business model and sector, and there is no specific value that fits all businesses. For instance, a car dealership can grow their business even if the customer retention is low, but for an online retail store, it's very important to have a high rate of this KPI in the long run.
Every business strives for a high customer retention rate because this KPI is directly related to a general positive brand image and high satisfaction of your customers, which both lead to bigger company growth and profitability.
KPI: Service Level
Deliver the services as you committed to
This key performance indicator measures your ability to complete the standards established in the service level agreement given to your clients. The service level agreement contains the list of services and standards your company committed to maintaining. For example, you stated that you would answer to 80% of the e-mail requests you receive within one business day.
Tracking the service level customer service KPI is important because you need to know how well you are performing compared to your previously determined goals. It's vital to track these agreements, and if you don't evaluate them frequently, you might get off the path, and some problems can go unnoticed. If you aren't aware of the problem that exists, you will not be able to fix it.
For this key performance indicator, you can track as many customer service KPIs as you want, but strive to complete the services you previously agreed and exceed them if it's possible!
KPI: Support Costs vs. Revenue
Find out how much are the support costs in the percentage of your complete revenue
The last KPI is support costs vs. your total revenue, and it's equally important. Analyzing the support costs in relation to your revenue will help you assess how much your customer service is comparing to your total income.
Every company strives to provide the highest possible quality at the lowest costs, and that is why this metric is essential to track.
If you divide the total support expenses with the number of issues, you will know how much every individual customer support costs your business.
Even if your business is providing an excellent product or service, issues will be a part of your company. Therefore, regardless of your company's success, you will always have some support costs, but try keeping them as low as possible. If the support costs rate is low, that means your team is well trained, and it's efficiently performing. Also, this is a sign that you adjusted your staffing schedule excellent according to your team's needs.
Track this customer service key performance indicator over time, and you will discover some trends. If you see any abnormal variations in trends, investigate why that happened and how you can affect it.
What Makes an Effective KPI?
For developing a competitive business, it is essential to assess operations continually. You need to track your core business objectives. The right set of KPIs will bring your team closer and make them work all together towards the company's goals.
Businesses who track their objectives with KPIs force their employees to dive deep into analyzing the data, which will engage them in the cycle of constant development. After each campaign, metrics-driven companies can check to see how their activities affected their KPIs, helping them become more efficient over time.
Whether you're implementing KPIs for the first time or you're setting the new ones, keep these vital characteristics in mind:
If you want your KPI to be truly handy, you need to make it simple. Your key performance indicator needs to be easily comprehended and measured. For instance, KPI "How many customers we added this month" is both easily comprehended and measured.
Efficient KPI should prompt decisions and not further questions. If your goal is precise, all your employees that are involved with this goal will know how to influence it.
You need a key performance indicator that will raise the overall clarity of the campaign without interrupting daily actions.
To be able to analyze the positive and negative aberrations from a goal, you must make your key performance indicator measurable. KPIs can be both quantitative and qualitative.
For quantitative KPIs is very clear how to measure and compare them, but what is the case with the other one? For example,'' How satisfied are our customers with our product?'' It can be defined with patterned surveys, even though its subjective nature isn't numerical.
Make sure your KPIs are based on a solid-rock focused goal. An efficient KPI dodges generalized questions like "Improvement in field operations."
Your KPIs should trickle down from the overall strategic goals of the business to the everyday actions od the employees that are affecting them.
Some companies focus on getting an ever-growing amount of customers, while for the other companies, this may not align with the overall concept. For instance, if your company is focused on customer service, your focus is on customer retention than acquisition.
Always make sure that your KPIs are supporting the ultimate goals of your organization.
This characteristic of efficient KPI means that the appropriate decision-makers are in charge of affecting specific KPIs.
By assigning the responsibility of the KPI to the relevant supervisor, the measurement will be more accurate.
KPIs should be reported frequently, and their data analysis should be related to that same time frame. Sparse reports will produce difficulty in accurately identifying trends, while too frequent reporting can depreciate the value of the gathered data.
How to determine the adequate frequency of your reports? Try considering the sensitivity, importance, expenses, and accuracy of the recommended time frame.
The positive public reputation and happy, satisfied customers are the reflections of a successful business that has excellent customer service. If you want to know how good is your business performing and are your customers satisfied with your product, service, and overall company, implement KPIs and track your improvement towards success. Even if your company is in the critical state, KPIs will help you identify issues, areas that need to be improved, and will help you make better strategic decisions for the ultimate success.