KPI Tracking 101: 4 Essential Customer Service Metrics

Customer service is a crucial constituent of providing a fantastic customer experience to customers. Customer service matters at each customer touchpoint, and it has the power to directly impact your sales and revenue as more than 80% of all U.S. customers are ready to switch to doing business with a competitor following a poor customer experience.

As the old saying goes—it takes years to build a reputation but just moments to ruin it. This quote effectively addresses the importance of delivering excellent customer service and keeping clients happy. Customer service is a crucial piece of modern-day business processes that can hugely impact your business and affect how your organization is viewed in the public eye.

For that reason, it becomes extremely important to measure the most critical customer service metrics and keep tabs on where your business is at the moment, whether you’re doing well with customers and where you need to improve. Nevertheless, in the digital age we live in, you can easily track hundreds of customer service metrics because not having enough actionable data is no longer a problem like it was in the past. So, now when we’re data-rich, the problem is not whether you should measure customer service metrics but which metrics are worth tracking. And with so many out there, how do you determine which are the best indicators for your business?

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That’s precisely what we’re going to answer here. In this blog post, we’ll first explain the importance of measuring customer service KPIs or key performance indicators and metrics to help you measure your progress against your strategic objectives of customer service efforts. Later, we’ll take a look at the four most important customer service metrics and KPIs you should regularly measure to know your customer service satisfaction levels so that you can deliver an even better customer experience to your existing and prospective clients.

The Importance Of Measuring Customer Service Metrics And KPIs For Businesses

Customer service KPIs and metrics are beneficial because they offer a look behind the scenes at how businesses interact with clients. As a company executive, you might think that the service your company delivers is the best of the best, but customers might perceive things quite differently than what you think.

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Customer service metrics and KPIs provide unbiased numbers for you to measure your customer service success. Bottom line, without accurate measurement, it’s impossible to know the service areas you’re doing well in and the areas you need to improve.

With the introduction of customer service metrics and KPIs, your customer service department can have concrete data analytics to make informed and better business decisions and improve the gaps to sustain complete success in the three essential areas mentioned below:

  • Boosting customer satisfaction. Being one of the critical components of customer support metrics, customer satisfaction determines how content your customers are with your service. Consequently, the higher the customer satisfaction score, the longer the customer lifetime value.
  • Measuring team performance. Besides boosting customer satisfaction, customer service KPIs and metrics can effectively measure how efficiently your team handles the service requests. Measuring the right metrics can offer you insights and knowledge about the gray areas of your team and help you create enhancement plans and schedule training sessions to accomplish your customer service benchmarks.
  • Increasing customer retention. Tracking the customer satisfaction KPIs can also offer you insights on customer satisfaction scores so that you can put your best efforts into aligning your offerings to your customers to keep them happy. Keeping them happy is the first step to increasing customer retention rates and turning your loyal clientele into your biggest brand advocates.

4 Essential Customer Service Metrics You Need To Keep An Eye On

Determining and measuring the right customer service metrics or KPIs can help your company monitor and analyze customer relations by considering their overall journey. Below, we’ll take a look at the five most important KPIs for customer service evaluation and acquiring actionable feedback that you need to measure.

Customer Satisfaction Score (CSAT)

Customer satisfaction score or CSAT, also known as happy customer key performance indicator, is the number one customer satisfaction KPI that helps to evaluate the customer’s satisfaction rate with your company, products, or services. Measuring CSAT helps to gain valuable insights into what your customers think about your business.

CSAT is usually measured using just a single question like:

  • How would you rate your overall satisfaction with the product or service that you received? (Answers can be satisfied, unsatisfied, or somewhat satisfied);
  • Were you satisfied with our company’s product or service? (Respondents can answer with a simple yes or no);  
  • On a scale of 1-5, how satisfied are you with …? (Obviously, respondents will rate their satisfaction level from one being the lowest to five being the highest).
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You can ask your customers to rate their satisfaction across multiple communication channels like live chat to collect real-time customer feedback, or just after purchasing a product or using your service, etc. Essentially, your CSAT score is the average of all customer responses, and the KPI itself is usually represented as a percentage.

In the end, the higher your CSAT score, the better is your customer satisfaction rate. Measuring your CSAT is a genuine way to collect quantitative and qualitative feedback that will help you acknowledge the areas working well and the gaps that need to be addressed.

Average Resolution Time (ART)

Since every customer expects a fast and consistent support experience, quick resolution time is always a good determinant for customer satisfaction. Therefore, addressing customers' requests and queries in real-time is imperative for your business to keep them from churning for another company that offers more expedited customer service.

Average resolution time, or ART, refers to the total time taken by your customer service team to resolve a support ticket once it's looked upon and is measured in online hours or days. Of course, it goes without saying that the lower the ART, the higher the customer satisfaction with your customer service efforts. You can calculate your business's average time to resolution by simply dividing the sum of all resolution times by the total number of resolved cases.

If this essential customer service KPI happens to be high, then you should seriously think about fixing it in its early stages before it becomes a severe problem where customers wait for days before their queries get resolved. To address this, consider implementing Y Meadows' latest AI and machine learning-commanded software within your existing ticketing system to speed up the automation of your ticketing procedure and pin down the tickets which require immediate attention from the ones that don't. Then, with the help of our revolutionary software, you can keep your customer service agents more organized and your customers happy with your speedy assistance.

Net Promoter Score (NPS)

Net promoter score is one of the most well-known customer service metrics that measures how likely your existing clients will recommend your business, product, or service to prospective customers. To measure their business’s NPS, companies ask their customers what is sometimes called “the ultimate question:” how likely is it that you’d recommend our business, product, or service to a friend or a colleague?

To calculate your NPS, you should prompt your customers to select from a scale of 0 to 10, where ten is “very likely,” and 0 is “never.” Customers who choose scores of 9 or 10 get categorized as promoters, those who choose 7 or 8 get classified as passives, while those who select from 0 to 6 are called detractors. The NPS metric is decided by subtracting the percentage of detractors from the percentage of promoters.

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Higher NPS scores indicate a healthy company with good customer relations, while negative scores indicate poor customer satisfaction and loyalty, which should immediately be investigated.

Cost Per Conversation

Figuring out the percentage of customer support expenses of your company’s total revenue is another essential customer service KPI out there. When you compare the support expenditures in terms of your revenue, it helps you assess how much your customer service efforts represent when compared to your total company revenue.

Each company concentrates on delivering the highest possible quality customer service at minimal costs, so it’s vital to track the following components:

  • Infrastructure costs
  • Resources in terms of salary costs
  • Costs for training and managing the team of agents

Cost per conversation could easily be calculated simply by dividing the total support costs by the number of issues. This way, you’ll know how much each support query costs your business so that you can incorporate that price into your end product packages. The support costs can be managed by adjusting the staffing schedule according to your business needs and hiring a well-trained team. If you measure this customer service metric over time and the percentage of cost per conversation is unusually high, we suggest finding out the key reasons and plan how to fix the issue.

Bottom Line

We hope that this brief list of the most important customer service metrics and KPIs provides what you need. Nonetheless, metrics alone won’t produce satisfied customers. It’s on you and your team to take these customer service metrics, use them to hone your monitoring process, save time, and gain valuable insights so that you build a customer service experience that will impress your respected customers.


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