Your company’s approach to customer service shows the importance of customers in your business. Measuring key customer service KPIs and ensuring your business performs exceptionally well on these performance indicators tells a lot about your business and customer-centricity.
Customer service shouldn’t just be a department, it should be the entire company.Tony Hsieh
After all, 96% of consumers reported that customer service is an important factor that determines their loyalty to a brand. Take customer services lightly, and you’ll face the music.
Here is an overview of the customer service KPIs that you must track to see where your brand stands, and where to go from there.
1. Net Promoter Score (NPS)
Net Promoter Score (NPS) is one of the most used customer loyalty metrics that shows you how likely your existing customers are to recommend your product or company to a friend or colleague. The beauty of NPS is that it is an extremely easy-to-measure track. You only need to ask the following single question from your customers:
How likely is it that you would recommend this company to a friend or colleague?
The customers can select a relevant response between 0 and 10. You can then calculate detractors, passives, and promoters by categorizing responses accordingly:
It is a perfect customer service KPI that shows you how well your business is doing. You can use Emojics NPS calculator to quickly get started right away.
The NPS ranges between 100 and -100. A high score (preferably positive) means that you have a higher number of promoters. You can compare your NPS with industry benchmark reports to compare your standing in your industry.
2. Customer Satisfaction Score (CSAT)
CSAT is a single item survey that measures customer satisfaction for a specific customer interaction with your company. For example, you can use CSAT to measure customer satisfaction with customer services. Here is a sample question that you can ask:
You can then calculate CSAT using the following formula:
Number of positive responses / Total number of responses x 100 = CSAT%
You can compare your CSAT with industry benchmark to see how good you are doing. Here is a link to the industry benchmark score.
The CSAT is easy to calculate and it lets you track customer satisfaction for all types of customer interactions with your business.
3. Customer Effort Score (CES)
Customer Effort Score is a customer experience (CX) metric that tracks how easy it is for customers to interact with your business. It is a single question that asks: How easy it was to solve a problem with (company name)?
It could be a 3-point, 5-point, 7-point, or 10-point Likert scale question. However, CES 2.0 restricts you to use a 7-point scale and use the following formula to calculate the percentage of customers who agree that you made their experience easy:
(Total number of respondents who selected 5, 6, or 7)/(Total respondents) x 100
CES is a better predictor of customer loyalty than NPS and CSAT. It is easy and a quick way to understand how happy customers are with the experience they receive. You can use data to improve CX.
4. Customer Retention
Customer retention is an important customer service KPI that you must track to see how many customers your business retains each month, quarter, or year. A reduction in customer retention indicates an issue that needs to be found and fixed.
Customer retention is directly linked to profit. A 5% increase in customer retention results in at least a 25% increase in profit. It is one of the most important KPIs that you need to track and improve. Here is a formula to calculate customer retention rate:
Monitor customer retention to ensure you are moving in the right direction.
5. Conversion Rate
It is estimated that an average person sees between 4000 and 10,000 ads every single day while the average conversion rate is 2.35%. You need to focus more on improving conversion rate rather than spending money on traffic generation.
Conversion rate refers to the number of visitors who complete a specific action on your website. The average conversion rate is a measure of your website’s experience, marketing campaign effectiveness, targeting, and several other critical variables.
A poor conversion rate indicates a flaw somewhere in your funnel that is leaking potential customers. This makes conversion rate a critical customer service KPI as it identifies issues in the customer lifecycle and funnel.
Here is the formula to calculate conversion rate:
Conversion rate = (Total Conversions / Total number of visitors) x 100%
A higher conversion rate is preferable as it shows your website (and its marketing pages) can convert visitors into customers and require minimal tweaks. This eventually improves UX and CX.
6. First Response Time (FRT)
One of the core customer service KPIs is the first response time which is the time difference when a customer initiates a customer service request and agent response to it. FRT is calculated using the following formula:
(Time of first response) – (Customer request time)
The average FRT depends on the support channel. For example, 53% of customers expect to have their phone call answered by a customer support agent in under 3 minutes while 92% of customers said they expect a live agent to respond in 1 minute and 36 seconds.
Here is an overview of industry-level social media first time response rates:
How well your brand is doing on social media?
7. First Contact Resolution (FCR)
First contact resolution is a measure of your customer service’s ability to resolve customer queries in the first contact without them having to follow up. It can be calculated using one of the following formulas:
FCR ensures that customers don’t have to contact customer support again for the same problem. This is a critical customer service KPI that ensures your company is doing a great job at solving customer problems. It is estimated that 60% of companies that track FCR for at least a year report 1-30% improvement in overall performance.
Don’t ignore FCR, start tracking it today if you aren’t already.
8. Average Resolution Time
It refers to the average time your customer service takes to completely solve a customer problem. Lower time indicates your support team’s effectiveness. Research shows that average resolution time (also known as mean time to resolve) is associated with customer satisfaction. A low-resolution time increase customer satisfaction:
Here is the formula to calculate average resolution time:
Total time to resolve all customer requests / Total number of customer requests resolved
9. Ticket Volume
Ticket volume refers to the total number of customer requests (or tickets) at any given time. Tracking ticket volume regularly (several times a day) helps you identify issues and backlog.
For example, if ticket volume starts increasing instantly, you can analyze customer requests and identify patterns to identify issues quickly.
Here is an example of a ticket volume spike that shows a problem that needs to be addressed immediately:
Tracking ticket volume is important to keep identify bugs and issues in your system and/or technical glitches that all customers face.
Tracking the right customer service KPIs helps you identify loopholes and improve customer services and customer experience. These metrics provide insights into how your customer support team is doing and what problems your customers are facing.
It works both ways: Internally and externally.
Use the right tools to track these essential metrics.