Your customer service team is your direct link to customers or clients. They answer questions and resolve issues, all the while influencing customer loyalty. But how do you know your team is providing great customer service? You need key performance indicators (KPIs) to measure its success.
This article covers some important metrics you can use to rate your company’s customer interactions.
1. Response time
Your response time is how long it takes to get back to a customer. Customers expect reliable answers from several channels fast. There are two response times you should keep track of:
- First response time: This is the amount of time it takes to initially respond to a customer’s message.
- Overall response time: This is the total time it takes to resolve a customer’s issue.
Why it’s important
A quick response time is important because it shows that your company respects your customers and their time. Even if you can’t fix a customer’s issue at that moment, you can let them know you’re working on it.
Replying to your customers promptly makes them feel valued and taken care of. If you leave them hanging too long, they may feel ignored and will likely take their business elsewhere.
Manage your customers’ expectations. On each platform, add disclaimers letting them know when they can expect a reply. For example, you might have a message on your website that says, “Please give us up to 48 hours to reply to your inquiry.”
How to measure it
Find your average first response time by taking the total response time from all of your business’ tickets and dividing it by the number of tickets there are.
Total First Response Time / Total Tickets = Average First Response Time
Finding your overall response time is similar. Take the total response time to resolve all tickets and divide it by the number of resolved tickets.
Total Response Time to Resolve Tickets / Total Resolved Tickets = Overall Response Time
How to analyze the data
Almost 33% of consumers believe they should receive a reply within an hour of contacting a business on platforms like email and social media. If your average first response time is over an hour, you could be upsetting a huge portion of your customer base.
Customers who contact your business by other methods may want answers even quicker. Phone calls should be answered in three minutes or less, while customers who reach out by live chat options or SMS should be answered immediately.
Cutting your response time can be difficult if your service team is already stretched thin. Companies like Upwork can help you increase your team’s bandwidth by leveraging independent customer service reps to handle customer questions and concerns across platforms while your core team deals with more pressing service issues.
2. Customer satisfaction (CSAT)
Customer satisfaction (CSAT) shows you how content your customers are with your services. It represents their overall customer experience. Your customer service team can use CSAT scores to gauge its performance during crucial touchpoints with customers.
Why it’s important
Knowing your CSAT score helps you maintain or improve your communication with customers, improves their user experience, and keeps them loyal to your brand.
Your CSAT score gives you a comprehensive picture of how happy your customers are with your customer service. Happy customers are not only reliable customers; they’re also more likely to advocate for your business. A great CSAT score can help grow your customer base and increase sales.
How to measure it
You can find your CSAT score by sending out surveys to customers after a ticket has been resolved. Present surveys to customers after each interaction. Use tools like SurveyMonkey and Google Forms to create short (no more than 10 questions) CSAT surveys. Email these surveys to customers.
A good way to set up your CSAT survey is to let your customers rank aspects of your service from one star to five stars. Here are a few questions you might ask:
- What rating would you give your experience with our product?
- What is the likelihood that you’d endorse our product to a friend?
- To what extent did our product fulfill your needs?
- How would you rate your experience with our website?
- How would you rate the customer service you received?
If the survey has a five-star ranking system, high ratings would be four or five stars. To calculate the CSAT score for a question, take the total amount of high ratings, divide them by the total amount of ratings, and multiply the number by 100.
(Number of High Ratings / Total Number of Ratings) x 100 = CSAT Score Percentage
How to analyze the data
The average customer satisfaction score varies by industry. For example, soft drink companies could have average scores of just over 80%, while television service providers could have average scores of just over 60%.
If your scores are below the benchmark for your industry, you know you have improvements to make. For example, if customers continually rate their experience on your website three stars or lower, it may be beneficial to hire user experience (UX) or user interface (UI) design experts from a working marketplace like Upwork to update the site.
3. Customer support volume
Customer support volume is the total number of tickets you receive over some time. Some customer issues are inevitable, but your business should aim to limit them. Customers prefer a seamless experience, and dealing with their issues can cost your company time and money.
Why it’s important
Keeping track of the number and nature of customer service tickets can show you where you can improve. It also helps you anticipate periods when you’re likely to have more inquiries so that you can prepare your team.
For example, if the majority of your customers ask questions about how to use your product or service, you could use software like Document360 or Knowledge Base to create a self-service option, like a frequently asked questions (FAQs) section, where customers can find answers.
How to measure it
The larger your business gets, the more customer service tickets you’ll have. Your customer service software will keep track of the tickets you receive and what each one is about. You can track how many tickets you receive weekly, monthly, yearly, or over any other period.
You should group your tickets by content as well. Monitor how many inquiries you get about product issues, sales processes, and company information.
How to analyze the data
Customer support volume helps your team be ready for anything and proactively respond to future problems. It gives you insight into where your customers need the most help and the situations (time of year, product launches, sales, etc.) that cause the ticket volume to rise.
Here’s an example: Your company designs time-tracking software. Last July, your business launched a software update and experienced a huge increase in service tickets. CSAT scores dropped dramatically because your support staff couldn’t get to every customer. The next time you release an update, you know to increase the size of your customer service team to handle the extra workload.
4. Customer effort score (CES)
Your customer effort score (CES) represents the level of effort with which customers can do business with you. It tells you how hard it is for a customer to buy from you, return products to you, or have their questions answered.
Let’s say you have an e-commerce website that sells designer socks. Your most popular item is a Christmas-themed pair of socks. Many visitors type the phrase “Christmas socks” into the search bar to find the item.
However, the search bar recognizes the product by its actual name, “Santa’s Fuzzies,” and won’t show the item in its search results for the phrase “Christmas socks.” Some customers will look through your inventory until they find the product, but some will become discouraged, and you’ll lose business.
Why it’s important
If customers can’t get their needs met easily by your customer service team, they’ll search for products elsewhere. They might also bad-mouth your business to their friends and family.
How to measure it
Gather CES data after every customer interaction. This can be when they buy from you, when they use your website, or when they connect with your customer service team. At the end of customer interaction, ask the customer how easy it was to get their needs met.
If a customer has just returned a pair of your socks, send them an email asking, “How difficult was it to make this return?” Give them seven options from “very difficult” to “very easy.”
Customer Effort Survey:
How difficult was it to make this return?
- Very Difficult
- Difficult
- Somewhat Difficult
- Neither Difficult nor Easy
- Somewhat Easy
- Easy
- Very Easy
Remember that the CES question will look different depending on what a customer is trying to do.
How to analyze the data
Good CES scores are five or above. If you have an average number score lower than that, you know you need to make some adjustments. Get more detailed about a user’s ranking by giving them a space to explain it.
One customer might say, “It was difficult to have my issue resolved because you don’t offer a FAQs section or user forum on your website. I had to call your company directly, which was inconvenient.” If you get several similar comments, create opportunities for customers to find their answers.
CES has its limitations, though. Because CES surveys are given after a single interaction, they don’t take into account the different demographics of customers. First-time customers are lumped in with long-time customers. There’s no way to tell if a negative rating is coming from a loyal customer who just had a bad experience but will likely continue to buy from you or a new client who won’t.
5. Social media metrics
Social media metrics show the effectiveness of your marketing efforts over platforms like Facebook, Instagram, and Twitter. They help you create and adjust your social media strategy over time.
For example, let’s say your public relations (PR) company uses Facebook Ads to promote your services. Your ad has 100,000 impressions (the number of times your ad appears on someone’s feed). However, the ad has only been clicked 50 times. Your ad isn’t effective.
Why it’s important
Customers from every demographic share their opinions about products or services on social media. Social media metrics show you how your target audience is engaging with your business. They also show you what is and isn’t working. Measuring the effectiveness of your posts gives you an idea of your intended audience’s needs and desires and helps you improve your social media strategy overall.
How to measure it
Several metrics can help you gauge your performance on social media:
- Engagement: These can be likes, comments, shares, or anything else that requires someone to interact with your post.
- Reach: This is the number of different accounts that your post shows up for. Reach is different from the number of impressions your post has because it only takes into account the number of times your post is shown to unique users rather than the total number of times it’s featured.
- Referrals: These are people who click on your post and are transported to a landing page for your product or service.
- Conversions: These are people who complete the action you’re trying to get them to complete. Conversions can be actual sales, or they can be new leads who fill out a form.
Most platforms have their analytics program, like Twitter Analytics and LinkedIn Page Analytics. However, it can be time-consuming to search through these for every platform. A social media analytics tool like SproutSocial or BuzzSumo can make it easier to manage metrics from several sites.
How to analyze the data
When you’re aware of your social media metrics, you can create posts that speak to your intended audience. If your social media advertisement is getting a lot of impressions but people aren’t engaging with it, change it.
For example, quality Twitter ads often have average click-through rates (CTRs) much higher than 1% (depending on the industry). If yours has a CTR of 0.5%, you need to adjust it.
6. Net promoter score (NPS)
Your net promoter score (NPS) is a measurement of how likely your customers are to recommend your product or service. References are extremely important. Many customers find them more trustworthy than advertisements.
Why it’s important
Depending on your industry, a good portion of your business can come from referrals. Small businesses, in particular, rely heavily on word of mouth.
For example, if you’re an independent website designer, you might not have the necessary advertising budget to compete with larger website-building companies. Endorsements from satisfied customers can help you bring in new ones.
How to measure it
Ask your customers a question like, “How likely are you, on a scale from 1 to 10, to promote our brand to others?” Scores of 9 or 10 are positive and indicate that customers are likely to promote you. Scores of 6 or below are negative and indicate customers are detractors. Scores of 7 and 8 are neutral and should be disregarded.
To find your NPS, subtract the percentage of negative scores you have from the percentage of positive scores you receive. If you have 80% positive scores and 5% negative scores, your NPS is 75%.
NPS = Positive Scores (9 and 10) – Negative Scores (1-6)
How to analyze the data
When you ask customers how likely they are to recommend you, include another question asking them why they would or wouldn’t promote you. This lets you know what you can improve on and what you’re doing well.
Average NPS scores can vary a great deal by industry. For e-commerce companies, a high NPS score might be in the low-60s, while a high NPS score for a software as a service (SaaS) company might be in the 30s.
7. Customer retention rate
Your customer retention rate is how many customers you continue to serve in a period. Often, your customer retention rate is a direct representation of your customer service.
Why it’s important
Existing customers have a much higher chance of purchasing from you again than new consumers. A decline in your customer retention rate is a sign that your company needs to find the culprit and make improvements quickly.
How to measure it
You can measure customer retention for any period (week, month, year, etc.). It may even make sense to measure it over longer periods if you sell high-priced items (like computers or vehicles) that last longer than a year.
Take the total number of customers and subtract the number of new customers you’ve gained. Divide that number by the total number of customers you had at the beginning of the period. Then, multiply by 100.
[(Total Customers – New Customers) / Customers at Start of Period] x 100 = Customer Retention Rate Percentage
How to analyze the data
In an industry like insurance, where customers stay involved with a business for a long time, an average retention rate would be over 80%. In an industry like retail, where clients can make quick purchases, an average customer retention rate is just over 60%.
Find the average retention rate for your industry. If your company is below it, reach out to your customer base with emails, surveys, and phone calls to see if they have any input on how you can improve.
8. Customer churn rate
The customer churn rate is the number of customers who stop using your products. There are several reasons a customer might stop patronizing a business, but poor customer service is one of the main ones.
Why it’s important
While you’ll inevitably lose some customers, a large customer churn rate could indicate larger problems. Sometimes, a customer will give signs that they’re about to churn. They might purchase less often or in smaller quantities from your business over time.
Software like Feedbackly and ProfitWell can help you prevent customer churn by keeping track of factors likely to cause it. If you can get an idea of when customers might leave, you can proactively reach out to them.
How to measure it
Divide the total number of customers lost during a period by the total number of customers at the start of the period. Then, multiply that number by 100 to get the percentage.
(Customers Lost During Period / Customers at Start of Period) x 100 = Customer Churn Rate Percentage
How to analyze the data
Average churn rates vary depending on what your product is, how established your company is, and how much your services cost.
If your churn rate is high or rising, figure out why and fix it. This might mean contacting customers or taking a look at your business processes to get to the root of the problem.
9. Resolution rate
Your resolution rate is the number of support tickets that your support team resolves out of all the tickets it receives over a given period. A customer might ask you about a service that your product doesn’t offer or an update that isn’t available yet.
For example, let’s say your company sells editing software for writers. A customer asks about a speech-to-text function with the software, but there is no current option.
Why it’s important
Ideally, you want to achieve first contact resolution so the customer doesn’t have to follow up. The worst thing you can do is leave a customer hanging. If you can’t complete their request at the time, let them know when you’ll be able to.
How to measure it
To measure your company’s resolution rate, divide the number of resolved tickets by the total number of tickets your business receives over some time. Then, multiply that number by 100. The formula is below.
(Resolved Tickets / Total Tickets) x 100 = Resolution Rate Percentage
How to analyze the data
Periodically, take a look at some of your business’s backlog of unresolved tickets to see if you can improve your average handle time. You might have customer support team members with higher resolution rates than others. Spend some time monitoring these high performers to see what strategies they use.
Use metrics to improve your customer service team
Customer service is one of the most important aspects of your business. It’s how you build relationships with customers and meet their needs. But if you can’t measure your team’s effectiveness, you can’t know how well your customer service practices are working.
Using KPIs to measure and evaluate your service results can help you adjust and improve your customer service strategy. Better customer service means happier, more loyal customers and greater profits for your business.
