Customer Service Team. When it comes to measuring a customer service team’s success, one phrase comes to mind: Key Performance Indicators (KPIs). KPIs help companies stay on track, ensuring they meet the broader customer service goals. What are these goals? The Chair and CEO of General Motors, Mary Barra, said, “My metric for success can be summed up in one phrase: earn customers for life.” This is just one aim of customer service, but there are plenty of others:
- To build customer loyalty.
- To improve customer experiences.
- To cement your company as the immediate (or only) choice for that type of product.
- Establishing an emotional connection.
- Ensure customer expectations are met or exceeded.
These goals answer the question, “What’s the point?”. It sounds bizarre, but when starting out, many businesses just go through the motions. They deploy a customer service team because they’re supposed to – It’s what everyone else does. According to a report by Kolsky, 75% of brands report they are measuring customer engagement but can’t define what it is. Many businesses are disconnecting from the concrete goals and benefits behind their actions.
These businesses understand that customers need some way to communicate with the company if something goes wrong. Still, they don’t focus too much on the individual benefits of having a customer service team. These benefits are both preventative and wealth-inducing. By tracking some measures, you prevent customers from leaving. When you consider that 89% of consumers have switched to a competitor after receiving a poor customer experience, it’s easy to see how important this is. Other measures strengthen loyalty and create customers for life; you create passionate fans who buy products more frequently and spend more than their non-loyal counterparts.
There’s no doubt that customer service is an essential function of any business in 2021. A Microsoft report found that 96% of consumers worldwide say customer service is an important factor in their choice of loyalty to a brand. With this in mind, priming your customer service team for success is paramount in 2021. That’s why today, we’re going to be looking at 13 ways you should measure your customer service team’s success. Let’s take a look!
1. First Response Time
Speed is a significant indicator of customer satisfaction. Customers want fast responses to their initial query, whether on the phone, email, or live chat. When they’re met with silence and a long delay, they become frustrated. According to research by Temkin Group, B2B decision makers say lack of speed is the number one pain point, mentioned twice as much as price. Other research has found that customer satisfaction ratings are often higher for live chat exactly because customers get a faster response.
This metric is solely about responding quickly to the initial customer outreach rather than resolving the problem. Customers prefer a fast reply, even when it doesn’t fix the problem.
2. First Contact Resolution (FCR)
Studies have consistently proven that if customers have to contact your business a second time, their satisfaction is reduced by 10% or more.
FCR is the number of customer tickets that are successfully resolved in the first contact. A high FCR is linked to increased satisfaction, so it’s a critical metric in customer service. The formula for working out your FCR is simple. Take the number of incidents resolved in the first contact, and divide by the total number of incidents. Then, times this number by 100.
If your customer service team has a low FCR rate and you want to push it up, here are a few expert tips:
- Determine what drives repeat contact – Collect data and analyze the results. Do customers ring back because the agent didn’t send through that document they said? Is it because they had trouble following the instructions on the phone?
- Determine whether you can make communication clearer – is there something customers are repeatedly confused about? If so, you might want to experiment with different ways of saying the same thing.
3. Customer Satisfaction Score
A customer satisfaction score (CSAT) is a basic measurement of how satisfied your customers are. You can apply CSAT to products, services, or teams – in this case, the customer service function.
You calculate CSAT by asking a simple question like “How satisfied are you with your experience?”. You then provide a scale for the customer to choose from. The scale can be anything you want, but it’s typically 1-5, with some companies opting for 1-10 or even 1-3. CSAT is something you should continuously measure to see whether your customers are becoming more satisfied over time. It can also help you identify whether a recent change has left customers feeling frustrated.
4. Net Promoter Score (NPS)
NPS measures customer loyalty and how customers perceive your brand by asking a simple question “How likely is it you would recommend us to a friend?”. You can tailor this question more towards customer service if you want. For example, you could say, “How likely is it that you would recommend our customer service team for customers who run into problems with the product?”.
Base on their answers, customers are put into three categories:
- Promoters – Customers who love your service and will recommend it.
- Neutral – They had a satisfactory experience but didn’t feel strongly about their experience.
- Detractor – They had a negative experience and will tell their friends and family about it.
Naturally, you want to aim to push more customers into the promoter’s category.
5. Customer Retention Rate
Loyal customers come back and keep spending money, and typically they spend more per purchase than your other customers. And you can’t create loyal customers if you can’t retain customers. Additionally, it costs much more to acquire new customers than to keep existing customers. Since your customer service team is always interacting with your customers, they can have a big impact on retention. A poor customer experience can turn the customer away for good.
Here’s how you calculate your customer retention rate:
- Take the number of customers at the end of the time period.
- Subtract the number of new customers you got in that time period.
- Divide the result by the number of customers at the start of the period.
- Multiply by 100.
6. Average Resolution Time
Average resolution time is the time it takes for your customer support agents to solve all opened tickets within a specific time frame. You can do this on a per-agent basis to figure out who excels at resolving tickets quickly and who doesn’t. The agents who excel are invaluable in training new agents.
To calculate this, you simply take the total resolution time for all tickets and divide it by the number of tickets solved.
7. Social Media Monitoring
Social media monitoring is when you monitor every time your company is mentioned on social media sites like Twitter, Facebook, and Instagram. After an experience with the customer service team, customers often take social media to comment on it, whether that experience was good or bad. By monitoring your mentions, you can see how customer sentiment is shifting.
8. Cost Per Conversation
Customer service is a critical function in any booming business and getting it right can bring endless rewards. However, it can also be costly. Cost per conversation is a calculation of how much each customer service conversation costs your business. Naturally, all companies want to deliver the best service for the lowest cost, so monitoring this metric can help you determine how cost-effective your customer service team is. You add up all the costs associated with your customer service team, including salary, infrastructure, and training, and then divide it by the total number of tickets.
9. Customer Effort Score
A customer effort score measures how much effort a customer has to exert to get an issue resolved. This is typically measured by asking the customer, “on a scale of very easy to very difficult, how easy was it to interact with us?”.
Here are some of the things that can get in the way of a positive customer effort score:
- Poor mobile optimization.
- Difficult to find contact details. For example, if they are buried away on a hard to reach page of your website.
- The customer was passed from agent to agent before their issue was resolved.
- Time out issues with Live Chat.
10. Channel Performance
This is when you monitor how well each channel is performing in relation to your customer service team. For example, if the majority of your tickets come through Live Chat, this can mean that your Live Chat function is working well because:
- It’s easy to access.
- Customers understand how to use it.
- Customers feel compelled to reuse it if they need to (they don’t have negative experiences).
If you find one channel is performing better than others, you can market that channel or improve your other channels so that customers always get a consistent experience across channels.
11. Abandoned Interaction Rates
Abandoned interaction rates can mean abandoned calls, live chat interactions, or emails that go cold after the specified period. The lower your abandoned interaction rates, the higher your customer satisfaction will be.
Why do customers abandon interactions?:
- Long wait times.
- Confusing process – They are passed from agent to agent or are asked to do something difficult.
- They believe the agent has said something rude or confrontational.
12. Sentiment Analysis
Sentiment analysis is becoming a hot metric to analyze in customer service teams across the world. Sentiment analysis is about exploring the words your customers use to determine their feelings towards your company. With advancements in natural language processing technology, sentiment analysis has become a powerful KPI in recent years. Companies can now do sentiment analysis in real-time – the software tells agents how the customer feels based on the words they use. The agent can then adjust their approach to serve that customer best.
13. Average Handle Time (AHT)
AHT is a measure of the average length of a customer interaction. It doesn’t take into account resolution time, just the average length of a conversation. By driving your AHT down, you can reduce your cost per conversation since the two are directly related. AHT is typically a very important metric for customer support managers but can be a point of stress for agents. Some customers understand things right away, and others need a little more help, so some fluctuations in AHT are to be expected. AHT takes into account the total length of the call or chat, including any time on hold. A great way to reduce your AHT quickly is to improve your response times.
