What are Key Performance Indicators (KPIs)?

Key performance indicators or KPIs help gauge performance and progress toward an intended goal. KPIs help you focus on specific areas and strategically plan improvement. Company leaders measuring KPIs set targets and track their progress against the target.

Why is Measuring Customer Service KPIs Important?

When it comes to delivering exceptional customer service today, the stakes are higher than ever. Businesses need to quickly deliver the outstanding personalized service consumers expect and satisfy their needs. All while cutting costs and improving the bottom line. 

Without monitoring how well the customer service team does, you won’t know what areas your customers are growing infinitely for your business or when they are on the verge of churning. 

Building a solid relationship with your customers indeed takes time and strategic planning. But losing a customer takes only one negative interaction.

The hard truth is one poor customer service inquiry can be detrimental to a business. Consumers are likely to tell around 15 people about their experience with your brand. They will post about it on social media and other review sites, like Google. 

Just one negative review tells the world about the bad service they received. Then, upwards of 96% of those customers will churn and buy from a competitor. Your revenue will sink fast, and the business will struggle to stay afloat.

The great news is that positive reviews will lead to favorable word of mouth and online reviews resulting in repeat business, referrals, and increased revenue. An organization can be successful solely by providing exceptional customer service. 

With so much riding on delivering exceptional customer care, business leaders need to closely track the key indicators to understand the areas that need improvement. More importantly, implement a strategic plan to do better at pleasing customers.

Let’s look at how to track KPIs and the most important key performance indicators for customer service. 

Top Key Performance Indicators for Customer Service

Several key performance indicators for customer service will tell you when and where your business is falling short. Some KPIs are super simple to track, and others take a little bit more effort. 

1. Customer Satisfaction Score (CSAT)

Customer satisfaction score is a KPI used most often since it’s a simple and direct question. After an interaction, the question gets asked whether through a call, email, online chat, or SMS. There’s not a set question that’s asked. It’s customizable for what works for each business or interaction.

CSAT is done by asking for a quick answer

• You can ask for a rating on a numeral scale such as 1-5 
• You can ask for a yes or no answer
• You can ask for a satisfaction level such as extremely satisfied, satisfied, somewhat satisfied, or dissatisfied.

Example questions asked for CSAT:

• How would you rate the service you received?
• How satisfied are you with our company, product, or service?

2. Net Promoter Score (NPS)

Net promoter score gets feedback to understand the service level needed to get referrals. Customer referrals are so valuable to a business. A lead that comes from a happy customer is worth a million bucks. Well, maybe not that much, but you get it. 

Referrals close at a higher rate and faster than other leads. So, ensuring your customers are happy is an excellent form of marketing. The Net Promoter Score is an excellent indicator of company growth. 

You get your company’s Net Promoter Score by asking this question:

On a scale of 0-10, how likely is it that you would recommend [company name] to a friend or colleague?

3. Customer Effort Score (CES)

Without a doubt, consumer efforts levels are declining. The advanced technology available at most of the world's fingertips makes it extremely easy to buy with some companies. 

Consumers have seen the effortless options, so they now have higher expectations. They expect great personalized service quickly and meet their needs with minimum interactions. 

If you make buying from your company or receiving service time-consuming or difficult, your customer is at risk of churn. Tracking your customer effort score will let you know how easy you’re making it to do business with your company. 

You get your customer effort score by asking the customer the difficulty level of your service. You can ask a question like:

How easy was it to receive service and get the help you were looking for?

You can give choices like Super Easy, Somewhat easy, Not that Easy, or Difficult. You can then see where you may need a little fine-tuning. Sometimes, the difficulty stems from outdated technology, and upgrades are needed. 

Customers are more likely to return if you make it easy to buy from your company. Even if they have to pay a little more, if it’s effortless, they will buy again. Companies like Amazon have nearly perfected effortless buying, and it's paid off big time. 

4. Employee Satisfaction Score (ESAT)

You might be thinking, why employee satisfaction would have anything to do with customer service. It’s because employees work directly with customers providing the service they need. A happy employee that feels appreciated will be more dedicated to the success of your business and is more inclined to deliver excellent service to ensure customer satisfaction. 

Considering that customer service has one of the highest employee turnover rates of any industry. Measuring their wellbeing is an excellent way to nip any areas causing attrition in the butt before it happens. 

Investing the time and effort into your employee satisfaction is investing into your company’s success. After all, employees are the backbone of an organization and hold the hands of customer happiness. 

So how do you measure employee satisfaction to get your ESAT? Sending employee surveys is the easiest way to get honest employee feedback. 

You can send surveys to get anonymous responses where employees are more inclined to tell the truth. Or you can get feedback where the individual is known to identify the employee who is lacking job satisfaction. 

That allows you to sit down with the individual and gain valuable feedback on areas you can improve on to attain total employee satisfaction, or at least try to. 

It’s best to send the surveys digitally and make them super easy for an employee to fill out. You can ask a question such as:

How satisfied are you with your job here?

Then give them similar answer options like in CSAT, like extremely satisfied, satisfied, somewhat satisfied, or dissatisfied. 

5. First Response Time (FRT)

Consumers want their questions answered and problems solved with few interactions, one being preferred. If you make your customers wait for answers or it takes communicating with your company several times to resolve issues, you can be sure their level of satisfaction with your brand will decrease. 

Getting a customer's First Response Time is as simple as asking a yes or no question after an interaction with a customer service representative. You can ask questions like:

• Were we able to resolve your issue today?
• Did we satisfy your needs today?

Understanding your First Response Time will give you an idea of processes that need tweaking or employees that need additional training, so your customers' needs get met faster.

6. Service + Quality (SERVQUAL)

Servqual is also known as the RATER model. It’s a multi-faceted customer service KPI that measures the satisfaction level of services provided and overall experience compared to their expectations. 

Servqual measures the five service factors (RATER), which are:

• Reliability
• Assurance
• Tangibles
• Empathy
• Responsiveness 

Servqual is measured on a seven-point scale: Strongly agree, agree, somewhat agree, neutral, somewhat disagree, disagree, strongly disagree. The areas you’re looking at are:

• Reliability – The ability to deliver promised services accurately
• Assurance – The ability to trust the customer service representative and they are knowledgeable and courteous 
• Tangibles – The appearance and professionalism of the customer service representative 
• Empathy – The caring and personalized attention to customers 
• Responsiveness – The company’s ability to provide prompt service and willingness to help customers 

Servqual questionnaire is broken down into two sectors:

1. Their expectations of the idea service
2. The quality of service delivered 

The metrics from Servqual will help you see if your customer service is meeting your customers’ expectations. Yes, some customers have higher expectations than others, but it’s always best to try to meet them.

7. Average Handle Time (AHT)

The Average Handle Time refers to how long it took your customer service representative to handle the customer's inquiry. So, it starts when the inquiry comes in and ends when the customer's needs are met. 

The AHT metrics are commonly used in call centers when the point of contact is immediate, such as a call, online chat, or SMS. This KPI metric is not used for other contacts, such as an email where it’s not live.

A company’s Average Handle Time is critical since consumers today hate waiting. They expect friendly, efficient service fast as lightning. The longer you make them wait, the lower their satisfaction with purchasing from your brand. 

The industry standard Average Handle Time is six minutes and 10 seconds. The goal of each business should always be to do better and lower the AHT while maintaining high-level standards.

You calculate Average Handle Time by:

Add talk, hold, and follow up (if needed to resolve a customer's issue) times and divide it by the number of calls. 

For example: If you had 100 calls that averaged 1000 minutes with an additional 400 minutes of hold time and 200 minutes of follow-up time, you have an AHT of 16 minutes. 

To lower your Average Handle Time, you can:

• Ensure customer service agents are fully trained on your products and services
• Offer a self-service knowledge base 
• Ensure adequate staff volume 
• Limit hold times 

What to Do With the Customer Service KPI Indicator Results

What you do with the customer service KPI metrics is most important. Putting a plan in action to improve is the goal of receiving feedback. 

You’d want to pay close attention to any that have rated low, so you can figure out what went wrong and make changes to policies and procedures or provide additional training to lower-performing customer service agents.

If there are areas that consistently receive high scores, evaluate what’s going right to determine if there are successful actions that you should implement in other customer service interactions.

Savvy business leaders are learning there’s a more effective and less costly way to get customer service functions, and it’s through outsourcing. Customer service outsourcing providers have a team of experienced professionals who solely deliver exceptional care. 

Outsourcing is a proven business strategy that has helped thousands of businesses scale.

How Often Do You Track Customer Service KPI Metrics?

It’s best to track your customer service key performance indicators consistently. With so much riding on high levels of customer satisfaction, you always want to know when your excellent customer service is slipping. 

You never want to overwhelm your customers with after-service surveys. One survey at a time is best to keep it simple for your customers. You can track metrics for a specific timeframe, then switch it up and track another.

For some of the surveys, you can go a step further and ask for more details of why they gave your customer service the rating. Getting specific reasons will help you understand where your company can improve to reach total customer satisfaction and increase loyalty. 

Key Takeaways

Tracking your company’s KPIs will give you the information you need to know what areas need fine-tuning or which customer support agents need additional training. Monitoring your key performance indicators for customer service will help you identify customers at risk of churn, so you can win them back over before it’s too late. 

With a bit of effort and elbow grease, you can get your customer service team to provide flawless 5-star service in no time. In turn, you will see the needle on your revenue shoot up with increased customer retention, referrals, and positive word of mouth. 

Are you ready to hire a team of customer service experts to blow your customers away with exceptional service? If so, contact Awesome CX today.

Sources:

The Secret Ratio That Proves Why Customer Reviews Are So Important | Inc.com

Ninety-Six Percent Of Customers Will Leave You For Bad Customer Service | Forbes

Want More Customers? Get Quality Referrals From Existing Customers. | Entrepreneur.com