Key Performance Indicators (KPIs) are a special set of metrics that help determine whether business is going in the right or wrong direction. At first glance, it seems that customer service KPI scores take a backseat to traditional business KPIs, like profits, costs and regional sales. However, key customer support metrics may paint a more complete picture of success for the long-term viability of a business.
Jeff Bezos has gone on the record to say that customer obsession is “the first and by far the most important” key to building a successful business. Amazon isn’t alone in this belief: Netflix is one of many other Fortune 500 businesses that believe happy customers are the foundational element of a successful business. So what customer service KPI metrics are worth obsessing over?
This post will highlight everything you need to know about customer service KPIs, including:
- Why are customer service metrics important?
- What are the most important customer service KPI metrics for teams?
- What is a customer service KPI dashboard?
- Why are top customer service KPIs hard to achieve?
- How do you improve customer service KPIs?
Why are customer service KPI metrics important?
Customer service teams have their work cut out for them: the need to optimize margins and cut costs, all while providing a higher level of care that meets the modern customers’ expectations for immediate, personal and effortless support.
It’s now widely understood that for support teams, the stakes have never been higher. People are increasingly making their buying decisions based on the support they receive. Customers will stop doing business with a company after one poor customer support experience. Because of the impact support can have on a company’s bottom and top lines, it’s critical that support leaders are tracking the performance of their support agents, understanding areas for improvement and what’s working, as well as celebrating exceptional performance. To do that, there are specific customer service key performance indicators that need to be monitored on an ongoing basis in order to adjust processes or optimize agent training.
When you’re tracking the right KPIs, you get an undoctored, objective view of your team’s performance, which increasingly, has an impact on a company’s bottom line. Let’s take a look at what those are now.
What are the most important KPIs for customer service teams?
It’s more important than ever for customer service teams to understand how you are performing against your customers’ expectations. There are core KPIs that every customer support team needs to be tracking closely. Some are based on very tangible metrics like resolution time, while others look at your customers’ feelings towards your company and how they perceived an interaction.
Here are the 15 most important Customer Service KPI Metrics:
- Customer Satisfaction Score (CSAT)
- Customer Effort Score (CES)
- Employee Satisfaction Score (ESAT)
- Total Tickets and Tickets Per Customer
- Volume by Channel
- First Response Time (FRT)
- Average Handle Time (AHT)
- First Contact Resolution
- Cost Per Resolution
- Top Topics
- Consistent Resolutions
- Net Promoter Score (NPS) As A Customer Service KPI
- Customer Retention
- Employee Turnover Rate (ETR)
- Top Performing Agents
CSAT score is the most popular and straightforward way to measure customer satisfaction. It’s a metric that measures sentiment towards your product, service or a specific interaction. To measure CSAT, you’ll ask a simple question, such as: On a scale of 1-5, how satisfied are you with your recent purchase/support interaction/service? You’ll want to carefully review the interactions for people who responded with low scores to analyze what went wrong to update procedures and responses or conduct additional agent training.
Read how we increased WestJet’s CSAT by 24% with AI here
Minimizing disruption in a person’s life and requiring minimal effort on their part are the cornerstones of good customer service. CES measures how much effort your customer had to put in to resolving a particular issue or answering a specific question. CES depends on a myriad of factors including time spent, total back-and-forth interactions, and the number of times a person has to reach out.
To determine CES, you’ll ask your customers, On a scale from “Very Easy” to “Very Difficult”, how was your experience? If you find that you have a low CES score, identify how to remove obstacles and friction.
Customer service has one of the highest attrition rates of any industry. Measuring employee satisfaction with their job, processes and team can alert you to any issues or attrition risks, and as a result retain your agents (and keep recruiting, training and onboarding costs at bay). Take frequent employee surveys, have 1-on-1 check-ins and encourage open communication to understand your employee satisfaction.
The most straightforward KPI for customer service teams is tallying the total number of customers submitting support tickets. In addition to tracking the top-line figure, you’ll want to analyze to identify how volume fluctuates based on times of day, day of the week, or based on seasons.
You can’t just take the number at face value, though. You need to understand if you are getting more service requests because your product/service is broken or because you are getting more customers. Tracking tickets per customer can help inform resource allocation through the lens of long-term vs. short-term needs.
Track where your customers are reaching out from in order to optimize staffing and prioritize channels that would benefit most from technologies like automation.
For example, companies generally have been de-prioritizing customer support email as a support channel in favor of social messaging and live chat. In a recent study, we found that customers prefer email support over all other digital channels. By tracking ticket volume per channel, you prioritize and shift resources to where your customers are.
Also referred to as First Reply Time, FRT measures how long it takes a company to provide an initial response to a ticket. Valuing a person’s time is the most important thing a company can do with regards to customer service according to 73% of consumers, so decreasing the time it takes to at least acknowledge a person’s request is critical to a person’s overall satisfaction. Across the board, first response time needs to be a key area of focus. Research has found that the average first response time is 12h 10m, but 75% of customers expect it within 5 minutes. It’s important to note that confirmation emails with generic auto-responders skew first response time metrics. If your company uses autoresponders, you may need to define a new KPI that measures “first impactful response time.”
75% of customers expect a response in 5 minutes. The average is 12h 10 min.
Getting back to your customers quickly is one thing, but how long it takes for you to actually resolve an issue is even more important. To calculate AHT, add up the tidal time it takes to close a ticket, from the time your customer initially reached out, hold / wait time, back-and-forth interaction and subsequent tasks, and post-interaction system updates.
You can minimize AHT by decreasing time your customers are waiting and optimizing each back-and-forth interaction. Using hybrid support models, like human+AI vs. purely human agents can significantly help reduce wasted seconds.
You don’t want your customers to have to reach out to you multiple times to resolve a single issue. That’s the recipe for frustration that directly impacts retention. That’s why measuring first contact resolution, or whether or not you resolved an issue in a single chat session, phone call or email response, is a good indicator of how your team is performing. If your customer needs to reach back out or be escalated to another source for support, it does not count as first contact resolution.
To measure First Contact Resolution, ask your agents to check a box or confirm within the agent desk if an issue was resolved at the end of an interaction (you’ll want to audit this on a regular basis), or follow up with your customer and ask if their issue was resolved.
This is a better resolution time measurement than average resolution time (ART). While first contact resolution results in a solution being provided in the initial outreach, average resolution time measures the amount of time it takes to completely close a case. If you are in a service industry where issues escalate or move to other departments, measuring ART takes the true view of your performance out of your hands.
Let this sink in: 265 billion customer support requests are made every year, costing $1.3 trillion1. Understanding how much it costs to solve a single ticket is critical not only to operating costs and staffing but also serves as a great way to measure the effectiveness and ROI of adopting tools like AI.
To calculate cost per resolution, take your total monthly operating expense (salaries, technology, training, licenses, overhead, office supplies, etc.) and divide it by the total number of tickets. If you have a high cost per ticket, or notice that it is increasing, you’ll need to look for ways to bring efficiency to your group. This could come in the form of new training and employee performance review, a need to review systems used like agent desk platforms or the need to adopt new technologies.
In addition to tracking the number of tickets, analyzing the topics and reasons why people are reaching provides opportunities to carefully review processes, responses and policies to ensure a positive customer experience. You’ll also be able to identify opportunities to proactively communicate throughout the customer journey and create ways to surprise customers and catch them before a problem becomes a pain point.
For instance, if there is a high volume of troubleshooting questions for a particular product after three months, your company could proactively provide steps on how to keep a product working as expected.
Think about whenever you’ve visited In-N-Out. You know you’re going to get great service and your meal is going to taste the same as every time before. Like with their burgers, people also expect consistency when they reach out to a company – no matter the channel, the agent on the other end or time of day.
In fact, In our own consumer research, we found that consistency in a company’s service and experience is one of the most important factors in creating satisfied customers. Striving to provide consistent resolutions is something that is becoming increasingly critical – especially as people are more than eager to loudly share their negative experiences.
To measure consistency, use AI to analyze how agents respond to different people reaching out with the same query and flag discrepancies.
Net Promoter Score (NPS) measures loyalty and the probability that someone will recommend your company to other people. NPS looks at overall, long-term brand perception, and is measured by asking a simple question: On a scale of 1-10, how likely are you to recommend [company] to a friend/colleague?
NPS can be an indicator of growth potential for a company because peer recommendations carry so much weight in our society that is social media-obsessed.
You should track the retention rate of your customers who reached out with an issue. Did they come back and buy from you again? Did you manage their issue well enough for it to not rupture your relationship with the customer? This will require integrating into your CRM platform, and making sure all systems (agent desk, eCommerce, etc.) are feeding data in and out of your CRM for a 360-degree customer view.
This is also a key performance indicator for determining overall customer loyalty to your brand, so the implications of good customer retention go beyond repeat purchases.
Employee Turnover Rate is the percentage of employees who leave a company within a certain amount of time. If you run a large support team, make sure you have a close pulse on your ETR so you can address issues head-on. The cost of replacing employees (recruiting, training and onboarding) is huge and any time you have a new agent, there is potential for inconsistency and other metrics to slide.
You’ll want to track and recognize your agents who have the lowest average handle time, highest first contact resolution, solve a large volume of tickets, deliver high CSAT and more. Ensure your agent desk platform allows you to drill down to specific agent performance, including both human and AI-powered virtual agents.
What is a Customer Service KPI Dashboard?
A customer service KPI dashboard is a place where managers can access data in real-time – whether it’s CSAT, resolution time or effort score. Data is presented in graphs or charts and is continuously updated, enabling leaders to understand exactly how their team is performing. Within a dashboard, you can examine how your team is performing over time. And if you make new hires, change policies or procedures, or adopt technology like AI, you can easily see how performance is affected.
You can create your own dashboard, or access out-of-the-box data platforms from agent desk software like Salesforce, Zendesk, Gladly or Freshdesk, among other customer experience management platforms.
Why are Top Customer Service KPI Metrics Hard to Achieve?
Managing a customer support function is harder than ever. There are more channels to support, higher volume and stretched – and stressed – agents. Here are the top 6 challenges impacting support team KPIs:
- Elevated Customer Expectations
- Conversation Juggling
- Information Silos
- Angry Customers
- Unavoidable Crises and Ticket Surges
- Not Measuring the Right Customer Service KPI Goals
Meeting modern customer expectations is getting harder to do; people expect quick, convenient high-quality resolutions on their terms. People expect more, and although many companies have been trying to improve their support, whether it’s live chat or online wikis and self-help options, more than 50% of U.S. consumers have not seen any improvement in customer service over the last 12 months. Twenty-three percent have reported that customer service has grown slightly or significantly worse.
With the pressure to resolve tickets quicker, agents on digital channels like live chat and social messaging are often carrying on multiple conversations at the same time. This opens the door for distraction and mistakes.
In order to fully resolve tickets with personalization and context, agents often have to access information from various back-end systems of record – whether it’s CRM, order management systems, booking systems, knowledge base platforms, or logistics systems. This creates more work for agents that results in wait time and longer resolution times.
An article in the Los Angeles Times has referred to customer service agents as the “punching bag” on the front lines2.. The article focuses on the airline industry, but I would argue that agents across all industries deal with difficult customers daily. According to the publication, “Agents are subjected to verbal abuse almost daily. It’s a thankless job requiring patience and thick skin.” Agents often bear the brunt when something goes wrong – whether it’s a missing ingredient in a meal-kit, a lost bag, or lost package.
When the COVID-19 pandemic crept across the world, customer service teams were dealing with a surge in volume, evolving policies and new remote work environments. Many companies stopped measuring customer satisfaction during this time as they were simply trying to get back to customers, which often took days. When a crisis hits, it’s hard to maintain the same level of service previously provided, especially when using a human-only team that is affected by new work environments, external pressure and stress, and can’t scale output as volume surges.
While this might sound very basic, you need to have the right systems in place to actually measure the business-critical KPIs before you can look to improve them. If you use multiple engagement platforms, make sure all of the data is analyzed together to provide a true picture of how your support engine is performing.
How Can You Improve Your Customer Service KPI Metrics?
So how can companies actually deliver against customer expectations and turn support into a business driver? There are 3 specific ways that companies can improve their customer service KPIs:
- Hire More Human Agents
- Outsource Customer Service
- Bring AI Into The Organization In The Form Of Virtual Agents
To decrease resolution time and first response rate, companies can simply hire more agents. However, hiring an army of new agents to work around-the-clock and man all of the traditional and emerging support channels is cost prohibitive for most companies. The average salary for customer service agents is $35,437 in the U.S. [source]. You must also consider costs for human agent desk platforms, overhead costs, paid time off, sick days and more.
Many companies hire outside teams to manage customer service, but while outsourcing your customer support operations is a popular choice to save on costs, you’ll need to keep a close eye on consistency, agent training and CSAT.
Companies are starting to bring AI into their workforce to automate and augment support. The companies that leverage AI-powered virtual assistants are seeing upticks in customer satisfaction and other KPIs.
Are customer satisfaction surveys still relevant? Click to learn more.
Adopting AI can help improve customer service KPIs in two core ways:
- Automate resolutions to repeatable issues:
AI can respond instantaneously to high-volume, simple queries like order status and return requests.
- Augment human agent work: AI can help agents work faster by gathering data from a customer prior to handoff, or pulling information from other business systems like your CMS and eCommerce platforms. The AI can package up all relevant data to pass along to an agent who can quickly review, make a decision and communicate with the customer.
Give your customers instant answers to up to 85% of customer service issues with our Zoho chatbot.
How Do You Measure AI-powered Virtual Agents Against Your Customer Service KPI Goals For Human Agents?
Seventy-seven percent of executives have already implemented conversational bots for after-sales and customer service3. With more companies turning to AI, it’s important to understand the relevant KPIs for virtual agents.
Whether you’re tracking the performance of human or AI-powered virtual agents, you need to look at the same key metrics. Yes, that’s right. measure AI like you measure your human employees. Track the impact human and virtual agents are having on CSAT, retention rates, how well they collaborate with teammates, how successful they are at cross-selling, and the underlying metrics related to efficiency in closing tickets. This is a new way of measuring the impact of an automated customer service technology platform. Virtual agents are performing human work and need to be measured in the same way.
Need help improving your overall customer service KPI? Discover how other companies improved their most business-critical customer support KPIs.