Warren Buffet quotes, "It takes 20 years to build a reputation and five minutes to ruin it." The quote effectively addresses the importance of making customers happy to avoid hurting a brand's reputation.
The stat speaks volumes about the importance of efficient customer service and how it shapes a business for the better.
However, as Peter Drucker, a management guru, says, "You cannot manage what you don't measure," improving customer service is almost impossible without tracking the KPIs and metrics.
An insight into popular customer service KPIs will help you improve customer satisfaction and deliver a seamless experience.
Why Is It Crucial to Track the Customer Service KPIs?
Customer service KPIs are crucial because they tell what happens behind the scenes of a customer and business interaction. Put simply, you might believe you're delivering top-notch service as a customer representative; however, your customers may think the opposite.
The metrics provide an unbiased way to measure customer experience success. Without measuring the performance metrics, you cannot know where you fall short and what you need to do to improve it.
70% of consumers choose a brand that delivers excellent customer service. Therefore, sleeping on improving it isn't wise. Here's why tracking the metrics is essential.
Improve Customer Satisfaction
Customer satisfaction lets you see how satisfied customers are with your services. The higher the score, the better the service. It also helps you discover unsatisfactory customers and take steps to improve their experiences.
Determine Team Performance
Is your team handling service requests efficiently, or do they need to improve?
Customer service KPIs enlighten you about the shortcomings of the team members. This lets you create improvement plans and conduct special training sessions to achieve customer service KPIs.
Build Brand Reputation
Your quality products alone won't help you build a brand reputation. You must ensure customer satisfaction through seamless support. Measuring KPIs will help you find the flaws in your service.
You can improve them to boost customer satisfaction and encourage positive word of mouth.
Increase Customer Retention
The customer experience metrics give you an insight into customer satisfaction scores. It helps you tweak your existing strategies, design better products, and offer improved services.
Consequently, it will make your customers happy. Satisfied customers not only retain a brand but also turn into business advocates.
Top 15 Customer Service KPIs You Must Know
Photo by Stephen Dawson on Unsplash
You might assume a healthy relationship between you and customers. However, they might be saying something entirely different behind your back.
Fortunately, customer service KPIs help you monitor and analyze your customer relationships. Later, you can implement the collected feedback to prevent analysis paralysis and meet revenue targets efficiently.
1. Average Handle Time (AHT)
Average Handle Time (AHT) calculates a support agent's time to respond to a query.
It starts when an agent opens the email to when they click send. It could also measure the time a support agent takes to answer a call till the time they hang up.
Customer service is all about details. Reducing a few seconds from the average handle time can significantly add to the revenue. Therefore, customer service representatives must optimize and streamline processes to minimize the average handle time.
While the goal to reduce the number remains the same in every organization, the target number varies per company. If you cannot reach the target score, experiment with new processes and see what's slowing the team members.
2. Customer Satisfaction Score (CSAT)
Customer Satisfaction Score (CSAT), also called happy customer KPI, helps analyze customer satisfaction with your services, products, and brand. Measuring the CSAT score helps you see your business from their perspective. A few CSAT example questions include:
How would you rate our customer service on a scale of 1-10?
Were you satisfied with our product? (Yes/No)
How will you rate your experience? (Extremely Satisfied/ Satisfied / Somewhat Satisfied / Unsatisfactory Services)
You are free to include smileys, stars, and numbers in your CSAT scale. Later, you can calculate the score with a simple formula:
The number of satisfied customers/Total number of customers who participated in the survey x 100 = customer satisfaction score.
Gathering qualitative and quantitative feedback helps you spot your grey areas and those working well.
3. Net Promoter Score (NPS)
The Net Promotor Score (NPS) is one of the best metrics to gauge client experience and find ways to grow your business. It also gives you an insight into loyal customer relationships.
NPS score informs customers' likelihood of recommending your brand to their family members and friends. Besides, the overall score isn't affected by a customer's mood, unlike the Client Satisfaction Score.
You can use a key question, "How likely are you to recommend our brand to your friend or relative?" to collect customer responses on a scale of 1-10.
You can divide the responses into three categories.
Unsatisfied customers (0-6). These customers are unhappy with your services and products and can adversely affect your reputation through negative word of mouth.
Passives (7-8). They qualify as satisfied customers but are likely to turn to enticing competitor deals and offers.
Promotors (9-10). They are loyal customers who'll purchase from your brand at all times. They also refer your products to others, given their excellent experience.
You can calculate NPS by taking the promoter percentage from total participants and subtracting it from unsatisfied customers.
Because NPS is an excellent loyalty metric, do not miss out on calculating it and seeing where your business is headed.
4. First Contact Resolution (FCR)
First Contact Resolution speaks volumes about the efficiency of customer service agents. It is the percentage of service tickets resolved on the first contact.
As a rule of thumb, transferring customer call to another agent, referring them to contact another person in the company, or having them email you 2nd or 3rd time is never recommended.
The score indicates how efficient a team's agents are in resolving and addressing a problem without multiple interactions. The higher the FCR rate, the more satisfied your customers are.
Note that speech analytics can significantly impact the FCR.
According to a study tracking two groups of contact leaders, leaders represented 30% of the sampled group, and followers accounted for 70%. Surprisingly, leaders using speech analytics had a 76% FCR score, and followers averaged a 23% FCR rate.
Training the team members to enhance their communication skills and delivery quality can help optimize the FCR metric. Besides, consider improving the score by providing your team with customer surveys and live chat scripts.
5. Customer Effort Score (CES)
Customer Effort Score (CES) calculates how easy it was for your customers to complete a particular task through your business. This may include resolving a pain point or completing a purchase. You can ask, "How easy was it to get your queries answered on a scale of 1-5?"
The feedback will help you spot shortcomings and improve your services. You can calculate the score by dividing the sum of all CES scores by the total number of respondents.
One of the best ways to boost CES scores is to provide an omnichannel customer experience. This lets customers contact you through a preferred channel and allows you to resolve their issues more seamlessly.
6. First Response Time (FRT)
50% of customers are likely to purchase from a brand that addresses their queries within a minute. So, if you're taking an hour to respond to your customers, you're a step away from losing them.
The First Response Time (FRT) measures the time between the message sent by the customer to the time the agent takes to respond.
Higher FRT rates indicate agents' efficiency and willingness to do more for customers. Here's why it is one of the most crucial customer service metrics.
It tells about your team's promptness in addressing an issue
It prioritizes customer needs and makes them feel valued
You figure out if the existing team and resources are enough or whether you need more members on board.
Chatbots offer an excellent way to reduce response time. So, even if a support agent is busy or unavailable, a chatbot will generate a support ticket instead of leaving the customers hanging.
7. Number of Resolved Tickets
The number of resolved tickets determines the number of tickets a customer support member receives within a day vs. the number of tickets they resolve.
Essentially, it aims to discover whether the number of tickets resolved is far less than those received. If yes, the support agents are delaying the customer's pain points.
Tracking this KPI helps learn about the team's performance. Later, you can set up training sessions for underperforming agents. Make sure you measure this metric regularly to determine the spike or drop in unresolved tickets within a day.
8. Customer Churn
Customer churn refers to when your customers stop buying from your brand. Customer experience scores, satisfaction rates, and repeat purchases reveal a lot about impending customer churns.
This metric requires you to compare the customer retention rate and the number of customers lost. If you're losing more customers and retaining less, it's a red flag that needs to be addressed immediately.
You can take several steps to reduce customer churn, from activating customer engagement with your products and services to improving onboarding, offering incentives, and providing quick responses to customer queries.
9. Customer Retention Rate (CRR)
Do you have the ability to retain a paying customer? If yes, you can boost your CRR rate and build a company's reputation. The retention rate refers to a company's ability to acquire a customer yearly, weekly, or monthly over time.
Here’s a quick formula to calculate the retention rate: ((CE - CN) / CS) x 100.
CS refers to the number of customers at the beginning of the period, CE is the customers at the end, and CN is new customers retained during the period.
Because the cost of acquiring new customers is 5 times more than retaining existing ones, measuring the retention rate is crucial to know how many customers choose to stay with you.
Higher customer satisfaction and a positive brand image directly affect customer retention rates. So, make sure you work to improve them through reward programs and enticing offers.
10. Average Conversion Rate
Studies show that getting questions answered by a support agent during the buying journey is one of the essential features of a website.
The average conversion rate refers to the number of people visiting your website and completing an action. The higher the conversion rate, the more performing your campaigns.
Communicating with customers right when they navigate your site is like hitting the bull's eye. Answering their questions at the very moment can make a massive difference in sales and help grow a business.
You can track the conversion rate using a quick formula:
Conversions/ total visitors x 100% = conversion rate.
If your site had 300,000 visitors in a month and 20,000 converted, the conversion rate would be 6,66%.
11. Net Retention Rate
The Net Retention Rate goes further into analyzing your business growth by tracking the number of new customers, lost customers, and monitoring the product and service cancellations.
The score gives you an idea of how well your retention tactics work and what needs adjustment. Make sure you compare the results over time to determine positive or negative growth.
Monitoring the net retention rate will encourage you to identify bottlenecks and take steps to improve customer experience to lose less and gain more.
12. Channel Performance Analysis
Many businesses consider omnichannel customer experience to deliver better and gain customer loyalty. This allows customers to communicate with companies via their preferred channels: phone, website, email, social media, you name it!
Say you get 200 support requests monthly. If you aren't sure about the channels customers use to reach out to you, you'll struggle to evaluate the performance of each channel individually.
However, if you know a specific percentage of those 200 requests are from Facebook messenger, others are from live chat, and some are from emails and phone calls, you'll quickly determine the channel performance.
This will provide valuable insights about the channel that performs the highest and can positively contribute to your business growth.
13. Abandoned Calls
Long waiting time is one reason customers abandon calls. Nothing frustrates a customer more than support staff making them in an emergency.
Calculating this customer service metric helps execute strategies to deliver prompt support to customers and take their experience to the next level. You need to figure out what takes team members so long to respond to customers.
Knowing customer expectations and offering timely support will reduce abandoned calls. The lower the rate, the higher the customer satisfaction - a win-win situation for you.
You might be doing your best to offer seamless customer support, but your customers may expect more. Successful companies think like their customers and implement strategies to boost customer satisfaction.
To know what customers think about your customer support, tracking customer service KPIs is a must. However, metrics alone won't bear fruit. You must use the data to tweak the customer experience and guide the service agents to do their best.
So, it isn't merely about the numbers but how you utilize them to improve customer satisfaction by offering them a flawless experience.