How do you measure customer service?
What types of metrics measure customer satisfaction?
How do you choose the right metrics to measure?
If you’re trying to get inside the heads of your customers you’ve probably asked yourself any of these questions and plenty more.
We’re going to answer all of them in today’s post.
Let’s start by defining customer service metrics.
Customer service metrics are measurements of the happiness and satisfaction of your customers which reflects the effectiveness of your customer service team.
These metrics give you all kinds of insights into your customers’ purchasing patterns, what they love and hate about your company, where they prefer to review you or receive customer assistance, and the list goes on.
Ultimately, customer service metrics tell you what’s working and what isn’t. After that, it’s up to you what to do with the information you gather.
But before you can start raking in customer service data, you need to know which metrics you should even be measuring.
You’re trying to make measuring customer service metrics easy, but it’s often overwhelming looking at all the metrics you could possibly measure.
And right now, the last thing you want is analysis paralysis.
What you need to do before analyzing customer service data is to decide on what metrics matter most to your business and your goals.
To do that, consider the following questions:
Your “why” drives a lot of the decision-making in your business and the same is true in data analysis.
Why does measuring customer service matter to you?
For some businesses like Basecamp, a high first-response time and deeply satisfied customers aren’t just indicators of excellent work by their team…
They’re defining features of Basecamp service to their customers. These metrics tell them how well they’re delivering what they promise.
Another business may be in a high-growth stage. For them, it’s hiring season, which means they’ll want to measure the volume of support tickets per agent along with customer satisfaction levels.
Your reasons for tracking customer service metrics will be different.
But once you’re clear on your reasons, you’ll be able to decide on what to measure and what not to.
Knowing your audience is key to making sure the information you present will be well-received.
Metrics that matter to your ground-level team can be different from the metrics that matter most to your CEO who has a different perspective and different problems to worry about.
This means you’ll probably end up breaking metrics into different buckets, such as:
Nail down who will see and benefit from your reports to identify the right metrics to measure.
If you know what you want to accomplish with your customer service metrics, you can be laser-focused on only those that will move the needle forward.
Maybe you want to retain more customers.
If that’s the case, then you should start by measuring customer retention and customer churn to see how many customers you’re losing to your competitors and how many stick around.
Whatever the outcomes you’re looking for, use metrics that will give you the opportunity to achieve them.
That means they should:
There are many ways to measure customer service metrics and there are many metrics to measure.
We pulled out some of the most important ones most businesses will benefit from.
We broke them into 3 categories:
Let’s dive in.
We obviously had to start this list with the customer satisfaction score (CSAT).
It’s one of the most commonly used customer service metrics.
In fact, many companies request a CSAT survey from every customer after they interact with a service representative.
Customers are asked to rate their service interaction from 1 through 5.
If you want to calculate how many satisfied customers you have, simply add up all the 4s and 5s you receive, divide that number by the number of survey responses and times it by 100.
So if you sent out 100 surveys and 40 of them were 4s and 20 were 5s, then you have a 60% customer satisfaction score.
NPS essentially calculates how many customers are likely to spread your brand through word of mouth – the most powerful form of marketing there is.
It works like this:
You ask customers, on a scale from 0-10, how likely are they to refer you to their friends and family.
People who answer with a number from 0-6 are your “detractors.” They either don’t care to spread your brand or don’t want to.
Numbers 7-8 are what’s called “passives.” They may or may not tell others about your brand. Hard to say.
Numbers 9-10 are your “promoters.” They’re your hardcore customers who can’t wait to spread the good news about your solution.
Your goal should be to have as many promoters as possible.
Customer effort score is a very unique metric.
It measures how much effort a customer exerted to get their problem resolved, request fulfilled, product shipped or returned, or a question answered.
The idea is that the less effort the customer has to expend, the more loyal they’ll become.
To gather data on this customer service metric, ask customers “On a scale from 1-7, how much effort was involved in resolving your request?” or something to that effect.
Measuring your customer retention rate is critical for optimizing cash flow and understanding your budget.
The Harvard Business Review found that it’s anywhere from 5-25 times more expensive to acquire new customers than it is to retain existing customers.
So once a sale has been made and a customer is on board, the best thing you can do is provide as much support, assistance, and goodwill toward them so they can’t imagine ever leaving.
A rising retention rate will tell you if you’re doing the right things. So will the next metric.
Customer churn, otherwise known as customer attrition, is when a customer stops using your solution.
There’s no single predictor of churn, which makes it harder to measure.
But as an American Express study found:
“More than half of Americans have scrapped a planned purchase or transaction because of bad service, and 33 percent say they’ll consider switching companies after just a single instance of poor service.”
So while there’s no single indicator, bad customer service is a big one. Fix that, and fewer customers will be searching for your competitors.
Agents need to respond to customers fast.
Toister Performance Solutions found that customers expect a response from a customer service agent in 1-hour or less. Toister says:
“The new one hour standard reflects the longest response time that will meet at least 80 percent of customers’ expectations.”
That means anything longer runs the risk of upsetting the majority of your customers and leaving them with a bad experience.
The faster you reply to customer service issues, the better off you’ll be.
Your first call resolution rate (FCR) gives you an excellent measurement of how well-trained your customer service reps are and what impact they’re having on your customers’ perception of your business.
Engaging customers through multiple interactions, especially with multiple different people, is highly inefficient – wasting a lot of time, resources, and energy – but it’s also incredibly frustrating for customers.
A high FCR indicates competent and efficient customer service reps and managers.
A low FCR may mean you need to hire more reps, invest in better training, develop a more robust knowledge base for frequently asked questions, etc.
A common customer service metrics that complements FCR is average customer support ticket resolution time.
For the customer issues or requests that aren’t resolved right away, how long do they actually take to resolve?
Being passed around to multiple agents is frustrating enough for the customer, but to be led along without a resolution for a long time may be the straw that breaks their back and causes them to churn.
At the very least, a long resolution time will damage your customer service experience severely.
Monitor this metric closely and attempt to identify all ways to speed up ticket resolution time.
Having a relatively large number of customer support tickets may indicate one or two things:
It may be either or both.
Oftentimes, it’s a bad sign that something is seriously wrong with your product or service.
That may mean you need to hire more reps, check your solution for defects, or identify some other issue causing an outcry from your customers.
Even if you have a large number of support tickets, you may be able to handle them and resolve them at a fairly quick pace.
But you should be closely watching the volume of unresolved customer service tickets to make sure you’re not leaving more and more customers still waiting for help.
Again, this may be a case of too few customer service agents, a bad product, or a lackluster knowledge base.
By tracking this hard-to-swallow metric, you can find real solutions to the root causes of too many tickets.
An overlooked customer service metric is your customers’ preferred communication channels.
This is an important preference that you need to be hyper-aware of so you can speak to and help customers using the form of communication they prefer.
The best way to use this metric is to track how your clients contact you and improve or optimize those channels for excellent customer service.
Customer service reps are not just there to help customers find what they’re looking for, they’re also there to sell.
We already pointed out that acquiring new customers is extremely costly, so selling to existing customers is a more profitable strategy long term.
Train your customer service reps how to up-sell and cross-sell different promotions or complementary products and track how well they do.
If you have a knowledge base, you’re already doing customer service better than many other businesses.
But not all of your articles are going to satisfy your customers.
It’s important to get their feedback on what you write so you can make the material better.
One way to do this is to ask a simple question at the end of every support article:
Was this helpful?
And provide two options to choose from:
Yes or No.
That’s what Google puts at the end of their articles. If you answer no, a small box appears with a second question:
How can we improve it?
So not only does this tell you how helpful your articles are, you get to leverage your customers into telling you how to make them even more helpful.
Tracking the types or categories of customer support tickets helps you do 2 things:
If a lot of people are experiencing IT issues, like reporting on software bugs, that may mean you need an extra IT agent. It may also mean you need to produce more support articles regarding these IT issues.
Customers are often irate and frustrated when they contact customer service.
Pointing them to an article or talking them through a problem isn’t always enough to help them.
Sometimes they need to be shown what to do, or would appreciate speaking to someone face-to-face.
But it’s not like you can meet every customer in person.
So what do you do to provide that extra level of service?
It brings you HD screen and webcam recording, GIF creation, screenshots and annotations to the cloud in an easy-to-use, enterprise-grade app so you can quickly create and share visual content with your customers.
By making it easy to leverage the power of visual communication, we help teams like yours:
And ultimately, help them answer their questions and solve their problems quickly and easily.
Discover why CloudApp is an essential customer service tool today.