So, you’ve decided to set up a digital CX solution. You have all of the tools in place, and a rich analytics dashboard that provides your teams with all of the essential reports. Really, the only way to improve customer experience is with a data-driven approach.
To help guide your teams in the right direction, we’ve compiled a list of the best KPIs to track when it comes to customer service.
What are customer service KPIs?
CSAT score, or customer satisfaction score, is sometimes called the ‘Happy Customer KPI’. CSAT is generally measured using just one key question along these lines:
“How would you rate your overall satisfaction with the product / service that you have received?”
Respondents would then select their answer from a scale of choices. The results from multiple respondents are then averaged to calculate a composite customer satisfaction score.
This is most commonly represented as a percentage wherein 100% indicates that all customers were satisfied. This is calculated based on the number of respondents who selected either #4 (satisfied) or #5 (very satisfied), called the ‘top-2-box measure’ as it only considers the top two choices.
Net Promoter Score (NPS) is a measure of how likely it is that your customers will recommend your brand, product, or service. Customers are asked what is sometimes called the ultimate question.
“How likely is it that you would recommend our company/product/service to a friend or colleague?”
They are prompted to select from a scale of 1 to 10, where 10 is ‘very likely’ and 0 is ‘never’. Respondents are categorized as promoters, if they chose 9 or 10, passives if they chose 7 or 8, and detractors if they chose from 0 to 6. NPS is determined by subtracting the percentage of ‘detractors’ from the percentage of ‘promoters’. Higher positive scores tend to indicate a healthy business with good customer relations. Low negative scores indicate poor levels of customer satisfaction and loyalty which should ideally be investigated.
The average response time measures the time between the moment a customer calls and the moment an agent responds to it. This is an important one among the various KPIs for customer service to consider when evaluating your performance, as it is a main factor of complaints by customers. By responding quickly enough to your customers, you can respect their time and give them a good impression of your brand – which is important as when they call, it is likely that they already have a problem. Keep in mind that in general, a third of customers hangs up after one minute on hold, and two third have quit the line after three minutes: these missed calls have a price, both financial and in terms of image and reputation.
To keep the response time as low as possible, you must have enough agents available for your predicted demand: tracking the number of daily, weekly or monthly calls are other support metrics to measure.
Customer loyalty plays a fundamental role in a business’ success. It is usually measured dividing the number of customers doing repeated business/purchases by the total number of customers. It is an important metric as it is well known that retaining a customer is less expensive than acquiring a new one. By maximizing this customer service KPI, you can reduce costs, or assign them to other channels that will grow your business. There is no specific value as it varies according to your business model and sector – a car dealership can still grow even if customer retention is low, while an online retail store should try to have a high rate to be sustainable in the long run.
Another important customer support metric, especially for Software-as-a-Service (SaaS) companies, is the customer effort score. Knowing how easy it was for your clients to get what they wanted from your company is a good indicator of their experience. You need to keep that score low, otherwise, you will have frustrated customers complaining about how difficult it is to use your services, usually on social media or rating platforms; and they might well end up terminating their partnership with you to go for a competitor with a more user-friendly approach. The question to ask depends on what you are providing, but should be similar to the following: “On a scale of 1-10, how much effort did you put while using our product/finding what you were looking for?”
Customer churn or attrition is one of the most important customer service KPIs and needs continuous attention and meticulous analysis since you need to evaluate the reasons why customers stopped using your product or service, especially in SaaS businesses. The goal is to keep the churn rate minimal, but it happens in every business so you don’t need to panic immediately. In our example, we have visualized the monthly customer churn rate over the course of almost a year and, in this case, calculations include cancellations and downgrades. You can instantaneously spot which months performed best and which ones encountered issues. We can see that October is showing particularly higher churn rates and this information enables us to dig deeper and discover why.
The service level calculates your capacity to complete the standards set in the service level agreement provided to your customers. It is an ensemble of services agreed upon as a standard that your company is committed to maintain. For instance, you stated to answer 70% of the email requests you receive within 1 business day. Monitoring these customer service metrics is important for you to know if you are performing well in comparison to this predefined goal. It doesn't really matter which specific metrics you chose, but it is essential to respect these agreements. Not evaluating them might let you out of track and some problems might also go unnoticed, delaying the moment you are aware of them and start fixing what has to be.
What are the 3 types of customer service measures?
Overall satisfaction
“Overall, how satisfied are you with this restaurant?”
This question reflects the overall opinion of a consumer’s satisfaction experience with a product he or she has used.
The single greatest predictors of customer satisfaction are the customer experiences that result in attributions of quality.
Perceived quality is often measured in one of three contexts:
It is commonly believed that dissatisfaction is synonymous with purchase regret while satisfaction is linked to positive ideas such as “it was a good choice” or “I am glad that I bought it.”
Loyalty measures
“Would you recommend this restaurant to your friends and family?”
This single question measure is the core NPS (Net Promoter Score) measure.
Customer loyalty reflects the likelihood of repurchasing products or services. Customer satisfaction is a major predictor of repurchase but is strongly influenced by explicit performance evaluations of product performance, quality, and value.
Loyalty is often measured as a combination of measures including overall satisfaction, likelihood of repurchase, and likelihood of recommending the brand to a friend.
A common measure of loyalty might be the sum of scores for the following three questions:
“Would you come back to this restaurant again?”
When wording questions about future or hypothetical behaviour, consumers often indicate that “purchasing this product would be a good choice” or “I would be glad to purchase this product.” Behavioural measures also reflect the consumer’s past experience with customer service representatives.
Satisfaction can influence other post-purchase/post-experience actions like communicating to others through word of mouth and social networks.
Additional post-experience actions might reflect heightened levels of product involvement that in turn result in increased search for the product or information, reduced trial of alternative products, and even changes in preferences for shopping locations and choice behaviour.
Industry standards
As mentioned before, measuring service quality depends entirely on the context and brand promise, and that varies by industry. To understand if you’re providing good service, you must know exactly what your customers are looking for in terms of service quality.
Below are examples of how service quality is measured in different industries.
In restaurants, service quality tends to focus on timely service (not too rushed or too slow), server attentiveness, and friendliness.
In fine dining restaurants with a fairly engaging experience, an expected part of service quality is the ability to make relevant recommendations. This can be easily measured by a manager asking restaurant survey questions at the end of the meal, such as “how satisfied were you with the server's recommendations?” The manager can also ask if the order placed was influenced by the recommendation(s).
However, this is clearly not a measure that would be relevant in a quick-service restaurant, showing the importance of context. In quick-service restaurants, things like order accuracy and speed of delivery are more accurate measurements. To gather this data, you can put a link to a survey on a receipt and giveaway a free menu item upon completion. Here's an article that highlights the importance of data-driven decisions in customer service.
Service quality is especially important in automotive because the customer’s car must be fixed and completed on time. This is mostly focused on the service itself, and less about the interactions with the technician or front desk attendant, except when it comes to trust (because they must trust the professionals' recommendations).
You can ask questions like “how would you rate the quality of the service you received” or “is your car now running like you expected after it was serviced?” You can also ask an NPS question like, “how likely are you to recommend our service to a friend or colleague?”
In retail, you typically ask things about staff product knowledge (think Adidas and knowing what type of running shoe best suits your use) and recommendations. You can also assess merchandise knowledge (what goes with what), friendliness, and availability (were team members on the shop floor easy to engage).
While there are all very straightforward questions to ask, they can be conditional based on the text comments or score provided on that element.
These questions help to identify both the frequency with which it happens and the customer's satisfaction with the experience.
You can then regress that against the outcome measure and see how big an impact that makes on the overall experience. This provides direction on what to focus on in your store (or restaurant), and what action you should take. For example, if shoe recommendations are a significant part of the experience and guests are not satisfied - you can provide better merchandise training, and if they are knowledgeable but not making relevant suggestions, retrain to better read guests' interests.
A walkthrough on SERVQUAL
SERVQUAL is based on a set of five dimensions which have been consistently ranked by customers to be most important for service quality, regardless of service industry. These dimensions defined by the SERVQUAL measurement instrument are as follows:
These five SERVQUAL dimensions are used to measure the gap between customers’ expectations for excellence and their perception of the actual service delivered. They can help you understand both customer expectations, perceptions of specific services, and areas of needed quality improvements. SERVQUAL has been used in many ways. They can help with identifying specific service elements that need improvement, and targeting training opportunities for service staff.
Proper development of items used in the SERVQUAL instrument provides rich item-level information that leads to practical implications for a service manager.
The service quality dimensions evaluated by SERVQUAL should be adjusted for optimal performance in different industries, including public and private sector applications.
SERVQUAL scores are highly reliable, but when used in different industries may fail to produce a clear delineation of the five basic dimensions. Other measures, such as the Six Sigma model should be considered for applicability in quantifying the gap between service expectations and perceptions.
Make your KPIs actionable
The easiest way to spin customer expectations into a more positive direction is by using technology to connect with your customers. We currently have an offer going on spanning agents and chatbots. To learn more, click here.
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