You need your customers much more than they need your services or products. If you want to stay on top, you need to work harder than your competitors to keep a good customer service reputation.
Why is it important?
Studies show that when a business starts getting a bad rap from customers, it is likely to lose about 40% of the customers to its competitors.
But, putting up an almost perfect customer support that slays your customers is not a cheap feat. The time and monetary resources you expend at their service can be huge.
That’s why you need to know how your company is faring with respect to customer service.
Are you losing or retaining more customers? What about bounce rates? What about overall customer satisfaction? Are you using any Live Chat software to help you with monitoring your progress in customer service?
Looking for Customer Service Software? Check out SoftwareSuggest’s list of the most popular customer service software solutions.
Using “Key Performance Indicators” (KPIs) is a brilliant way to measure your level of customer service.
6 Customer Service KPIs Metrics for CX Teams
It’s very dangerous to chase someone else’s metrics. Focus on tracking your own metrics because there are no two companies that are alike.
If you are in retail, for example, using customer service KPIs for a B2B enterprise will be counterintuitive.
Identify areas in your customer service that are suitable for measurement. Establish why is it important for your business. When you focus on the right measurements, you will get alerts to potential challenges or confirmations to success.
Here is what you’ll need to consider when choosing KPIs to measure in your business:
- The location and size of your business
- Your Niche
- The stage you are in the business (or even customer) lifecycle
- Your unique circumstances
- Your short-term and long-term goals
Qualities of good KPI values:
Not every metric can make a good KPI value that you can use to measure the success of your customer service. Any effective customer service KPI metric should be:
- Balanced such that it can measure both short-term and long-term KPIs.
- Relevant, meaning the metrics you have just measured are going to have an impact on your business.
- Shared so that everyone in your organization understands why they are important.
- Understandable to everyone in your business.
So what are some of the KPIs you can use to measure how your customers value your customer service?
1. Time To Resolution
Whoever who has been in good customer service knows too well how resolving customer challenges can be complicated and migraine-inducing.
TTR assists companies to track the average time good customer service reps spend resolving customer issues, concerns and complaints.
TRR is measured in hours or days and much of it depends on the nature of service or system in question. It is calculated from the time the customer submits the request to the time the request is successfully handled by the customer relationship management reps.
How do good customer service managers calculate TTR?
The general formula for average TTR = Sum of all times to resolution/ total number of cases resolved.
A good Help desk software will not only empower your customer care representatives but will also help you resolve tickets and requests satisfactorily. Besides, it helps you to effectively calculate your TTR without much hassle.
2. Abandonment Rates
Are your customers walking away before making a purchase?
There are times when customers abandon their shopping carts and head to your competitor’s e-commerce store to make purchases.
Besides, there are many choices out there, plunging customers deep into customer decision paralysis.
What does it mean for your business?
If there is anything that may cause any form of friction on their way to purchase an item, there are high chances they will head to your competitors. But if you provide support and remove the roadblocks on their purchase journey, you will win them.
How do you calculate the abandonment rate?
Abandonment rate % = [Number of attempts to make a purchase, ATP – Number of successful purchases, SP] / [Number of attempts to make a purchase, ATP] * 100%
AR = {(ATP-SP)/(ATP)}x100%
3. The Net Promoter Score (NPS)
This score measures how willing your customers are to recommend your product or services to other people. NPS score can be used to measure overall satisfaction of your customer to your services.
It doesn’t target the state of emotion of your customer. That’s why it makes a good way of gauging customer satisfaction after a live chat or after experiencing their services and products.
How do you implement NPS on your website?
You can simply ask your customers (or even prospects) to rate your customer service on a scale of 0-10.
According to the NPS, the response to your questions is usually categorized into three parts:
- Detractors(0-6) – the unhappy customers who can easily damage your brand reputation
- Passives (7-8) – the undecided customer who can be lured into the traps of the competitor
- Promoters (9-10) – highly satisfied customer who later become your brand ambassador
Your NPS is given by the percentage number of promoters minus the percentage of detractors.
4. Customer Retention Rate
Businesses have a 60-70% chance of selling to an existing customer and a probability of 5% -20% when selling to new customers according to the book Marketing Metrics.
If you want to increase the total value of sales per customer, you need to devise an ingenious way to retain and sell to your existing customers.
How are you going to estimate customer retention rate for your business?
For instance, if you wanted to customize your online CRM software to measure customer retention rates, here are some of the parameters of a good customer service that you need to define and find out:
CE = number of customers at the end of period
CN = New customers acquired over the period
CS = Number of customers from the start.
Customer Retention Rate is simply the percentage of clients that you have retained over time expressed mathematically as:
CRR = {(CE- CN)/CS} x 100%
5. Conversion Rate
Depending on the nature of your campaign, conversion rate may be the number of people that take the desired action – make a purchase, click a link on your email or fill out a contact form.
Prospect conversion rate is one of the most important customer service KPI value for that indicates whether your efforts are succeeding or not.
How can you calculate CR for your business?
Conversion Rate = Number of specific actions/number of site visitors
For example, if you are running an e-commerce website with an averaging about 20,000 of monthly visitors. What happens if, during that month, about 4000 users subscribed to your mail list? The conversion rate would be 20% (4000/20,000 x 100%).
6. First Response Time
How long does it take for you or anyone at your customer service desk to respond to customer questions or concerns?
People don’t like waiting to have their problems solved.
When it comes to the online marketplace, how swiftly you respond to their challenges and concerns could mean business or no business to you.
First response time or first reply time is the amount of time (usually quantified in business hours) that elapses between when your web visitor submits a ticket and the time customer care representations respond to their specific challenges.
According to research conducted by Zendesk first response time correlates with customer satisfaction. Customers are not going to be happy if you take a lot of time to respond to their questions. That would make them easy preys for your competitors.
How do you calculate average FRT?
Invest in good customer service software. Using the software, you can easily calculate average FRT by:
Total of all first response times (TFRT) from your website divided by the total number of such cases resolved.
Numbers don’t lie.
If you want to trounce your competitors and increase your revenues, you need to closely monitor how your customers are experiencing your brand.
In other words, you need to measure and track KPIs and use that information to provide good customer service that improves your customers’ experiences.
A Digital marketing expert with a passion for all things digital. With a wealth of experience in the field, can excel at crafting and executing data-driven marketing strategies that drive results. Also, loves to travel and explore new things.
