The Ultimate Guide to Understanding and Improving Customer Service KPI’s
Customer service KPIs or Key Performance Indicators play a critical role in measuring and improving the success of your company’s customer service operations. By tracking these metrics, you can gain valuable insights into customer satisfaction levels. This insight is essential for optimizing your overall customer service strategy. In this blog post, we'll discuss the importance of customer service KPIs and provide a comprehensive guide on how to both understand them and improve them.
Why are KPIs important to customer service?
To ultimately understand why Key Performace Indicators (KPIs) are important to customer service teams, let's first define what a customer service KPI is. Customer service KPI refers to the quantitative measurements used to evaluate the success of a business in meeting its customer’s needs and expectations through its customer service operations.
Businesses can use these metrics to track and evaluate key aspects of their customer service experience for their customers such as response time, first call resolution rate, customer satisfaction score, and net promoter score. These metrics are critical for businesses to track because they provide valuable insights into customer satisfaction levels, which can help companies make informed decisions about how to improve their customer service and overall customer experience.
Additionally, KPIs also serve as a benchmark for businesses to measure their performance against industry standards and competitors. By setting and tracking KPIs, businesses can continuously strive to improve their customer service operations and ensure that they are providing the best possible experience to their customers. They also can be a useful metric to track as you are trying to make your customer support team more effective you can measure KPI’s both before and after making a process change in order to assess if your process change was truly effective for your team or not.
Overall, KPIs play a crucial role in determining the success of a business's customer service operations and are essential for improving customer satisfaction and the overall customer experience through the use of concrete measures that are useful for analysis.
What are the three main types of Key Performace Indicators (KPIs)?
There are three main types of Key Performance Indicators (KPIs) including: output KPIs, Outcome KPIs, and Process KPIs.
Output KPIs measure the results or outcomes of a process or activity. They focus on the end result and are often used to measure how successful a particular project or initiative has been. Some examples of output KPIs include cost per call and revenue per successful call.
Outcome KPIs measure the impact or effect of a process or activity on the overall business objectives or goals of your support team. They focus on the long-term results and the effectiveness of a particular initiative in achieving the desired outcome. Examples of outcome KPIs include customer satisfaction score, net promoter score, and customer retention rate.
Process KPIs measure the efficiency and effectiveness of a particular process or activity. They focus on the performance of a specific process or task by your support team and are often used to identify areas for improvement and optimize the overall performance of a business. Examples of process KPIs include response time, first call resolution rate, and average handle time.
Each type of KPI serves a different purpose and is used to measure different aspects of your customer service team’s performance. Businesses can use a combination of these types of KPIs to gain a comprehensive overall understanding of their performance and identify areas for potential improvement by the support team.
19 Key Customer Service KPIs That You Should Know
As someone who has worked in the customer service industry, I have seen firsthand the impact that poor customer service quality has had on customers. Luckily, being familiar with customer service KPIs and metrics can help companies identify areas for improvement and make data-driven decisions that will ultimately enhance the customer experience. Here are some of the key customer service metrics that companies should be tracking:
First Response Time (FRT)
FRT is the amount of time it takes for a customer service representative to respond to a customer's initial request for help. A shorter FRT can indicate to a customer that a company is more responsive to customer needs, while a longer FRT may indicate that customers are waiting too long for a response, leading to frustration and a poor customer experience. You should aim to reduce your customer support team’s FRT and monitor it regularly to ensure that they are responding to customer inquiries in a timely manner.
Customer Satisfaction (CSAT)
CSAT is a measure of how satisfied customers are with the service they received from a company. It can be determined in a variety of ways such as conducting surveys and analyzing customer feedback. Companies should aim to achieve a high CSAT score and track it regularly to identify areas where they need to improve. They can use the data to determine if they need to make changes to their customer service process or train their representatives to better handle customer inquiries.
Net Promoter Score (NPS)
NPS measures how likely customers are to recommend a company's products or services to others. It is typically calculated by asking customers to rate their experience on a scale from 0 to 10, with 10 being the most likely to recommend. Companies with a high NPS are more likely to have loyal customers who will continue to do business with them and recommend them to others. Companies should track their NPS regularly to understand how their customer experience is impacting customer loyalty as companies that have poor customer service will typically have a relatively low NPS.
Average Resolution Time
Resolution time is the amount of time it takes for a customer service representative to resolve a customer's issue. A shorter resolution time can indicate that your customer service process is efficient, while a longer resolution time may indicate that customers are waiting too long for their issue to be resolved, leading to frustration and a poor customer experience. You should aim to reduce your company’s resolution time and monitor it regularly to ensure that customers are receiving a prompt resolution.
First Call Resolution Rate (FCRR)
FCRR is the percentage of customer inquiries that are resolved during the first interaction with a customer service representative. A high FCRR indicates that the representative was able to effectively address the customer's issue without the need for additional follow-up, leading to a more efficient and satisfying customer experience. You should track your support department’s FCRR and aim to improve it by providing your representatives with the necessary resources and training to effectively resolve customer inquiries on the first call. Customers who can have their issues resolved quickly and efficiently are much more likely to be loyal to your company so this metric should be heavily prioritized.
Customer Waiting Time
Customer waiting time refers to the amount of time a customer spends waiting on hold or in a queue before speaking with a customer service representative. A long waiting time can be frustrating for customers and negatively impact their experience. Companies should monitor their customer waiting time and aim to reduce it by improving their staffing levels or implementing a call-back system that allows customers to receive a call when a representative becomes available.
Customer Handover Rates
Customer handover rates refer to the number of times a customer's inquiry is transferred from one support agent to another. Handovers can be disruptive to the customer experience and may result in a loss of information or a delay in resolving the customer's issue. Your department should aim to minimize handovers and monitor customer handover rates to identify areas where they can improve their customer service process whether this is by providing your support staff with more training so they are better able to handle issues or by implementing better escalation practices.
Average Handle Time (AHT)
AHT refers to the average amount of time a customer service representative spends handling a customer's inquiry, from start to finish. A shorter AHT can indicate that the representative is handling customer inquiries efficiently, while a longer AHT may indicate that the representative is struggling to resolve the customer's issue. You should monitor your service representatives AHT regularly and aim to reduce it by providing your representatives with the necessary resources and training to handle customer inquiries effectively. AHT can also be used to identify high-performing representatives that may be ready for more responsibility.
Number of Tickets
The number of tickets refers to the total number of customer inquiries received by a company's customer service team. This metric can help companies understand the volume of customer inquiries that they are receiving and identify trends over time. This can be helpful as it can help customer service managers manage staffing throughout the workday or hire seasonal staff if needed. Overall, companies should track the number of tickets regularly and aim to reduce it by implementing customer self-service options, such as a knowledge base or a FAQ section on their website that can help customers find answers to their questions without the need for direct contact with customer service.
Number of Tickets by Medium
The number of tickets by medium refers to the number of customer inquiries received through different channels, such as phone, email, chat, or social media. This metric can help your department understand how customers are interacting with them and prioritize resources for different channels. Your ompany should track the number of tickets by medium regularly and aim to provide a consistent customer experience across all channels.
The escalation rate refers to the percentage of customer inquiries that are escalated to a higher level of support, such as a supervisor or manager. This metric can indicate that your customer service representatives are struggling to resolve customer inquiries or that the customer's issue is particularly complex. Your company should track its escalation rate regularly and aim to reduce it by providing their representatives with the necessary resources and training to handle customer inquiries efficiently and effectively.
Customer Effort Score (CES)
The Customer Effort Score (CES) is a measure of how easy or difficult it was for a customer to get their issue resolved by the customer service team. This score can be obtained through customer surveys and can help your companyunderstand the impact of it’s customer service process on overall customer satisfaction. A low CES score indicates that the customer service process was easy and efficient, while a high CES score may indicate that customers are encountering obstacles or frustration during the customer service experience. Your company should track its CES and aim to improve it by simplifying its customer service process and provide your representatives with the necessary resources and training to handle customer inquiries effectively.
Average Reply Time
The average reply time refers to the amount of time it takes for a customer service representative to respond to a customer's inquiry. A fast response time can help improve customer satisfaction, while a slow response time may lead to frustration on your customer’s part and an overall negative customer experience. Your company should monitor its average reply time and aim to reduce it by ensuring they have adequate staffing levels and by providing your representatives with the necessary tools to respond to customer inquiries in a timely manner.
Agent Touches per Ticket
Agent touches per ticket refers to the number of interactions between a customer and a customer service representative during the resolution of a customer inquiry. A high number of agent touches per ticket can indicate that your customer service process is inefficient or that the customer's issue is particularly complex. Companies should track their agent touches per ticket regularly and aim to reduce it by providing their representatives with additional training opportunities or process improvements as needed to reduce the number of interactions needed.
15. Knowledge Base Views
The knowledge base views metric refers to the number of times customers have viewed the company's knowledge base or FAQ section. This metric can help companies understand the extent to which customers are using the self-service options your company has available and can provide insight into the types of information customers are seeking. Companies should track their knowledge base views regularly and aim to increase it by continuously updating their knowledge base with relevant information and by making it easy for customers to find answers to their questions. Additionally, if your knowledge base views are lower than expected, it can indicate that your team needs to promote your knowledge base more to customers whether by making it more accessible on your website or promoting it through means such as social media.
16. Abandonment Rate
The abandonment rate refers to the percentage of customers who leave a customer service queue without getting their issue resolved. This metric typically applies to call center or chat settings, but can indicate that customers are encountering long wait times or that the customer service process is confusing or difficult to navigate. Companies should track their abandonment rate regularly and aim to reduce it by providing customers with accurate wait times (that are ideally short) and by simplifying their customer service process. Your customers will be much happier and more likely to return if they do not have to make repeated attempts to contact your customer service department.
17. Cost per Resolution
The cost per resolution metric refers to the amount of money that your company spends to resolve a customer inquiry. This metric can help companies understand the efficiency of their customer service process and identify areas where they may be able to reduce costs. Your company should aim to reduce this number by improving the efficiency of its customer service process.
Occupancy refers to the amount of time that customer service representatives are handling customer inquiries, compared to the amount of time they are idle or unavailable. A high occupancy rate can indicate that representatives are handling a large volume of customer inquiries, while a low occupancy rate may indicate that they are not fully utilizing their time. Your customer representatives should not be spending all of their time resolving customer inquiries, but customer resolution should make up a large portion of their time. Your company should track its occupancy regularly and aim to optimize it by to ensure that you have adequate staffing levels and are providing your representatives with the necessary tools to handle customer inquiries efficiently.
19. Employee Satisfaction Score (ESAT)
The Employee Satisfaction Score (ESAT) is a measure of how satisfied customer service representatives are with their job and the company they work for. This score can be obtained through employee surveys and can help your company understand the impact of your customer service process on employee satisfaction. A high ESAT score can indicate that your representatives are motivated and engaged, while a low ESAT score may indicate that they are encountering obstacles or frustration during their work. You may not think that employee satisfaction is important, but if your employees are not satisfied, they are not likely to be as engaged in their jobs and are more likely to resign from their position which can cost your department valuable time and money in training resources. Ultimately, good, satisfied employees are invaluable to providing a good customer service experience.
By tracking these customer service KPIs and metrics, your company can gain a deeper, data-driven understanding of how they are performing in terms of their customer experience and identify areas where they can make improvements or improve efficiencies. By continuously monitoring and improving these metrics, your company can ensure that it is providing the best possible customer experience.