“It takes years to build a reputation but just moments to ruin it.” The above quote effectively addresses the importance of keeping a customer happy and satisfied. So, it becomes crucial to measure customer service success.
Where modern business is very much aware of the fact that providing positive experience dramatically impacts business growth. Good customer service is as important as featured in Barron’s magazine.
Customer service is a vital element of business processes that can impact your bottom line and affect how your company is viewed in the public eye. The major strategies to measure customer service should focus on instant response and meeting customer expectations.
Why is it crucial to measure customer service success?
Customer service is a timeless thing. American Express survey says 70% of consumers say they have already made a choice to support a company that delivers great customer service.
Measuring customer service is crucial as it helps you to know how well your business is performing, what your customers think about your products & services, and most importantly improve the gaps to achieve complete success in the three major areas.
Team and agent performance
When you measure customer service through your defined metrics and KPIs you are able to know your support team productivity. Based on the performance you can schedule training and improvement plans to improve customer service benchmark.
The customer satisfaction rate is an important KPI for customer service. If your customers are happy and satisfied with your service they will be associated with your business and recommend it to their friends and colleagues.
To measure customer service helps to know the customer satisfaction rate. The happy customers retain with your business for a long time and advocate your brand with positive word of mouth.
Key Metrics and KPIs to measure customer service satisfaction
Customer service KPIs or metrics is a performance measurement used by businesses to monitor and analyze customer relations by considering the overall customer journey.
Below is a list of important KPIs to measure customer service metrics and help to decide how you benchmark your customer support.
1. Customer Satisfaction Score (CSAT)
The most important metric to measure customer service performance is customer satisfaction is CSAT. Measuring customer satisfaction helps to gain customer insights and what they think about you.
CSAT score refers to how satisfied a customer is with your business. You directly ask your customers to rate their satisfaction with your products and services. Different communication channels such as live chat, email or phone can be used to collect customer feedback as a form of survey.
Some of the commonly CSAT questions are:
- How would you rate your satisfaction with our product or service? (Answers can be Very Satisfied, Unsatisfied, Somewhat Satisfied etc.)
- Were you satisfied with our product or service? (Yes/No)
- On a scale of 1-10, how satisfied are you with _?
Your CSAT scale can include regular numbers, stars, smiley faces, tiny unicorns, etc. There is no unified measurement of a CSAT score but that being said one could execute this below formula to determine the proportion of satisfied customers:
The higher CSAT score indicates better satisfaction. Implement the ways to collect qualitative and quantitative feedback, that helps you know what is or is not working.
2. Net Promoter Score (NPS)
NPS metric measures customer experience and assumes the growth of the business. The score helps to find out how likely your customers are to recommend you to their friends and relatives. NPS replies are less influenced by customer’s mood unlike CSAT that aims at emotion, not the intention.
How NPS is calculated?
You can find out your NPS with the help of the key question with an index on a scale from 1 to 10. How likely is that you would refer the brand to someone?
The customer replies are put into three categories:
- Promoters (9-10) – They are your loyal customers who will continue buying and refer others with good word of mouth.
- Passives (7-8) – They are your satisfied customers but are vulnerable to competitive offers and deals.
- Detractors (0-6) – Are the unsatisfied or unhappy customers who negatively impact your brand through negative word of mouth.
To calculate your NPS score you have to take the percentage of promoters (9-10) out of the total respondents and deduct subtract it from the detractors (0-6).
The NPS metric is just considered a good loyalty metric bu it is also closely associated with increased business growth. So never miss out a single opportunity to take your business to the next level.
3. First Response Time
The first response time refers to the time between the chat made by the customer and agent responses. Delayed response time is one of the top 3 reasons why customers leave your website. This is one of the most important metrics to measure customer service that determines customer satisfaction level.
The average response time is one of the important attributes of good customer service. Ifbyphone research finds 59% of customers are more likely to buy when brands answer their queries in under a minute.
First response time is even more important than the team’s overall response time for the below reasons:
- It acknowledges customers issues are being looked into
- It indicates the quickness of your team’s issue addressing
- Also, it aids you to learn if your team is enough or need more resources
Here is how the first response time is can be found out:
In order to reduce your response time, you must either scale your support agents or implement a chatbot. Chatbots can handle the basic queries 24×7 when the agents are not available that reduces the number of support tickets raised and forwarding the complex queries to human agents.
4. Customer Retention Rate
Customer retention is the result of great customer service and experience. If you create a good experience, that is consistent and predictable, then undoubtedly you will be improving customer retention.
The average global value of a lost customer is $243. Acquiring new customers indeed improves your brand image, however, retaining them for the longer term shows that you developed trust & loyalty.
How to measure customer retention rate?
Jeff Haden summarizes the best way of measuring customer retention with the below formula:
Customer Retention Rate = ((CE – CN) / CS)) x 100, where
- CE indicates the number of customers at the end of the process,
- CN means the number of new customers acquired during the process, and
- CS stands for the number of customers at the beginning of the process.
Read more on topic – customer retention strategies.
Every business focuses on improving the retention rate, and that’s why it should be amongst the main support metrics to measure. A general positive brand image and high satisfaction score will directly increase your customer retention graph.
5. Customer Effort Score (CES)
Customer effort score (CES) is quite similar to the CSAT score. The difference is instead of asking how satisfied the customer was, you ask them to evaluate their customer experience with their products and services.
In a way, you are still registering satisfaction, but now you are guessing effort. The philosophy here is the easier it is to finish a task, the better the experience. Apparently, making an experience a low-effort one is one of the greatest ways to decrease frustration and increase loyalty.
Like NPS, the CES is also directly associated with satisfied customers and business growth. So put your best effort that the score is the lowest on scale of 1-10.
6. Multiple interactions per conversation
We all might have experienced the scenario when an issue gets resolved in the first interaction and at times, it takes multiple interactions to get it fixed. The level of satisfaction is high in the first case and it is frustrating for the latter.
It is one important metric every business should measure how many interactions it takes on an average for the customer to get the right resolution. It measures the efficiency of your team to resolve an issue on the first interaction. It is an indicator used to know how good your agents are at understanding and addressing a problem without needing multiple interactions.
- Single interaction – When customers report their issue via email it is fixed in a single attempt without the need of any other interaction.
- Multiple interactions – When the customer reports the issue, the email will be reverted back asking about the previous details, then by asking some additional information, making it a thread of email interactions. In this process, a lot of time is wasted and the actual issue to be fixed gets delayed.
First interaction is very important for every business. You can optimize this KPI by training your support team to improve their communication skills. You can provide live chat scripts and customer surveys to improve resolution in the first interaction itself.
Learn more about live chat scripts and phrases.
7. Average Resolution Time
Fast resolution is a stable determinant for customer satisfaction. Every customer expects a smooth and seamless support experience. Quickly addressing to your customer’s queries is very important else you risk your customers to your competitor’s hands.
Average resolution time refers to the total resolution time – the total time taken by the support team to resolve the support ticket once it is looked upon. It is measured in days or online hours. The resolution time should be as low as possible.
How to calculate average resolution time?
It can be easily found by dividing the sum of all times to resolution by the total number of cases resolved. It will give you the average resolution time of your team.
Here is the formula to calculate average resolution time:
When the average resolution time is low, the customer satisfaction level is high. When the resolution time is higher it indicates FCR that reduces the number of customer interactions to get the problem resolved.
8. Customer satisfaction surveys
A known fact – Customer acquisition is more expensive than customer retention. Acquiring new customers is expensive, costing a business 5 to 25 times more than it takes to retain one.
It is important for you to know what is your customer experience with your products and services. And how do you do this? With the help of surveys through different channels such as live chat, email, phone call, face-to-face or even handwritten forms.
Customers prefer answering these surveys and further they can be analyzed to know what are your business strengths and the areas you need to work upon to increase overall customer satisfaction.
An unhappy customer is the worst thing that can happen as they might leave you for your competitors. The surveys help you to have a personal touch with your customers, know exactly what they are looking for so that you can make the right effort to meet and exceed their expectations.
For example Airbnb’s customer satisfaction survey:
Airbnb, popular for hospitality services, sends email to its customers to collect feedback after their stay. As a matter of fact, Airbnb has increased the sheer number of hotel bookings by 25%, just with its referral program alone.
Customer service surveys give you a picture of how well your business is doing. On the basis of the surveys collected you can implement strategies to go the extra mile to make your customers satisfied and happy.
9. Cost of customer support vs revenue
Finding out the percentage of support costs in the percentage of your total revenue is an important metric to measure customer service. When you compare the support costs in terms of your revenue it helps you to evaluate how much your customer service represents compared to your total revenue.
Every business focuses on delivering the highest quality service at minimal business costs, so it is essential to track it.
- People i.e. cost of salary
- Training and managing the team
How to calculate it by dividing the total support costs by the number of issues. You will easily
- You will get to know how much an individual support costs to your business.
It is an inevitable fact that customer support costs can be managed by well-trained team and adjusting the staffing schedule according to your business needs.
When you measure this KPI over time and analyze how your trend line is. If the percentage is unusually high it is suggested to find out the reasons.
10. Average Conversion Rate
Average conversion rate refers to the number of visitors who have completed their action successfully on your website. The higher the conversion rate, the more successful are your campaigns for business growth.
Forrester Research says 44% of online customers say having questions answered by a support agent during the buying journey is one of the most important features of a website. Communicating with the customer at the moment by answering customers queries can mean the difference between a sale and a bounce.
How to track the average conversion rate?
Follow the below formula:
Conversion rate = (Conversions / Total visitors) * 100%
Say if your website had 200,000 visitors and 10,000 conversions last month, your conversion rate is 10%
Tracking your business conversion rates is essential to gain insights from the data collected. Use the insights to engage customers in the right way and improve sales conversion.
11. Channel wise performance
With the evolution of new trends and technologies, businesses are adapting multi channel communication strategy and many of them are omni channel. With these businesses can communicate with their customers over their preferred channels such as website, phone, email, social media, messaging, etc.
Suppose you receive 100 support requests per month. But if you do not know the channels from where the customers are reaching out to you, it becomes haphazard. So, measuring these channels to evaluate the performance individually is very important.
For eg, Out of 100 requests, 40 are from live chat, 20 are from the FaceBook messenger, 10 are from email, 20 are from phone and 10 are from Telegram.
The breakdown performance of the channels helps you to know which channel is effective for your business.
Measure to know which communication channel is most effective for your business. Accordingly, you can improve the channels with low performance and maintain the service standard at the high performing channel.
Key takeaways of measuring customer service KPIs and benchmarks
Customer service is more about customers than more about measuring numbers. You can transform your business into a support powerhouse with internal customer service and boost your employee engagement.
Here are the key takeaways of measuring customer service KPIs
- Gain insights from customer analytics as it is an important aspect of delivering great customer service
- Measuring it on a regular basis helps to improve the gaps and improve customer service.
- Customer service is all about people. Hiring and training must be part of the process.