Measuring Customer Service Performance

 

Alright, so you’re responsible for customer service in the call center.

You’ve moved up the company ladder and upper management has placed their faith in you.

You’ve got a lot on your plate – managing quality assurance via call recording and monitoring.

You’re hiring and training new agents all the time.

Not to mention that you’ve been given a budget and are responsible for the measuring the success of your call center metrics.

It’s a tall order, and you’re wondering how you can take the customer service team to the next level.

Or perhaps, your manager is already pushing you for improvements.

There’s pressure from the top to align the performance of the customer service team with the goals of the entire organization.

Your starting to hear the acronym KPI tossed around at conferences and even between members of the executive team.

You know that at some point your going to have to incorporate KPIs into your team’s strategy.

You want to do it well, you want to stand out, but you’re not sure where to get started.

Well, don’t stress out too much.

I’m going to break it down so that KPI metrics are easy to understand and easy for you to implement 

And, if you read all the way through this post, you’ll see why using KPIs to manage your call center will actually make your life easier and make you look like a hero.

 

What’s In Store

First, I’m going to give you a quick primer on KPIs and how to use them.

Then, I’m going to show you why the customer service team is so important to the rest of the business and why you really do need to be in alignment with the overall goals of the company.

If you’re already familiar with KPIs, but are still struggling to understand how they relate to the call center, skip down to the section titled, Why Should the Customer Service Team Set KPIs?

Next, I’ll give you some specific KPI metrics specific to a call center based customer service team, so you can use to improve your team’s performance to drive results.

And finally, we’ll talk about specific ways that your KPIS  can improve your organization’s bottom line.

So, let’s get into it…

 

You might be wondering:

What are KPIs? And, what do KPIs have to do with customer service metrics?

A KPI or Key Performance Indicator is a series of metrics or goals used by companies to align their objectives throughout the organization.

KPIs drive the behavior that drives the results your business is focused on achieving.

In other words, KPIs are set and measured to ensure that all levels of the business are effectively helping the company achieve its highest-level objectives.

Usually the highest level KPI for a company is increased profits – either through revenue growth or cost reductions.

High-level KPIs may focus on the overall performance of the enterprise, while low-level KPIs may focus on processes in departments such as sales, marketing or, you guessed it, the call center.

 

Just because your company doesn’t use the term KPI, doesn’t mean you’re doing something wrong.

Other common names for KPIs include organizational goals, objectives, or even company scorecard.

The important thing is that your company is aligned from top to bottom to achieve your desired business results and that you are doing your part by improving the performance in your call center.

 

If you really want to learn more about generic KPIs you can do so here.

Now, Let’s Look at the Why and How of Setting KPI Metrics for Customer Service

 

Why Should the Customer Service Team Set KPIs?

 

While the objective of most companies is earnings, not all KPI metrics are related directly to a company’s finances.

The balance sheet lists all sorts of important assets, but the most important asset a company can possess is its relationship with its customers.

That relationship is in the hands of the customer support and/or customer service agents in the call center.

This is why the principles behind Key Performance Indicators suggests that everyone in the company have a role in driving the success of the business.

The importance of quality customer service is something that cannot be ignored in today’s, “Age of the Customer”.

 

“Just one phenomenal  customer experience can make a world of difference when it comes to word-of-mouth promotion”

– Karl Wirth, Co-founder & CEO at Evergage

The customer service team is often the most common contact touchpoint for many customers and becomes an opportunity to create value and loyalty – or destroy it.

Setting goals that improve customer interactions is a successful business strategy that helps companies retain existing customers and acquire new ones

 

Here are 4 Reasons why customer service is important to the Company’s Bottom Line.

A quality Call Center allows an organization to:

  1. Reduce churn, increase adoption, and improve retention
  2. Gather valuable customer data for product and service improvements
  3. Identify customer issues and/or upsell opportunities
  4. Provide alerts to identify “at-risk” and satisfied customers

If you want more direction on how to improve the customer experience check out our previous post – 4 Best Practices for Call Center QA to Optimize Customer Experience

 

How to  Set Customer Service KPIs

 

First of all, when you set KPIs you want to make sure that they make sense, not only for the company but for the call center agents and management.

After all, these are the folks who will be driving the performance of the KPIs.

Setting KPIs for your customer service team can be tricky at first, so use the popular, goal-setting acronym SMART to guide you.

SMART stands for:

  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time-bound

If your KPI is not specific, measurable, attainable, relevant, and time-bound your team may not understand what they are being asked to do, which can lead to reduced moral and performance.

For more help on setting achievable goals here’s a post that breaks down the differences between results-based goals and activity-based goals.

Examples of Call Center KPIs

Every business is different, so you should ensure that you’re setting goals that are relevant to your success.

But, if you need a little help, here are 8 excellent examples of customer service KPI metrics every inbound and outbound call center should be tracking.

  1. First Response Time
  2. Average on-hold time for customers
  3. Post-call survey rating
  4. Net Promoter Score (NPS)
  5. Overall customer satisfaction rating
  6. Customer Retention Rate
  7. Service Quality (ServQual)
  8. Employee Engagement

 

A Closer Look at the 8 Call Center KPIs

 

 

1. First Response Time

 

First response time is one of the most important metrics for creating a great customer experience and thus providing excellent customer service.

The simple definition of First Response Time is the amount of time it takes for your call center agents to contact a customer after they submit a query.

Contacting customers in the shortest amount of time possible will not only lead to more satisfied customers, it can also lead to more repeat sales and reduced customer churn.

First response time can be calculated per day, week, month, or year. Just make sure that you’re consistently tracking and comparing, to enable improvement.

How to calculate First Response time:

first response time formula

 

 

2. Average on-hold time for customers

 

The average on-hold time is the average amount of time a customer waits on the line to speak with an agent after the answering system puts them in queue.

When the average on-hold times become too long, call center agents also face the reality that the caller could hang up. Frustrated callers lead to poor business results.

Managing your on-hold time for your customers is critical to ensuring they have a good experience with your brand.

On-hold time can also be calculated per day, week, month, or year. Again, ensure that you’re consistently tracking and comparing, to enable improvement.

How to calculate Average On-hold Time:

average hold time formula

 

 

3. Post-call survey rating

 

The first thing to recognize when it comes to post-call surveys is that they are not the same as customer satisfaction scores.

Confusing these two metrics can frustrate your customers and skew the intended results.

A post-call survey should be only about one thing – the call the customer was just on.

What you’re looking for in a post-call survey is to know whether or not the customer support agent satisfied the needs of the customers on the call.

 

Did they answer their questions?

Did they resolve their concerns?

 

This information will inform you about the type of training your agents need, whether your call center’s current approach is working, and whether or not the agent is working out.

Very few customers want to stay on the phone much longer after their questions have been answered, so make it brief and to the point.

 

4. Net Promoter Score (NPS)

 

The NPS has become a hallmark of customer success management and is widely used across industries to track the approval rating of customers.

The process of determining your NPS is simple; using a 0-10 scale you you ask your customers the following question: How likely is it that you would recommend [your brand] to a friend or colleague?

 

Each respondents is grouped into one of the following categories:

 

  1. Promoters – customer with scores between 9-10. These customers are loyal enthusiasts, who will keep buying and refer others, fueling growth.
  2. Passives – customers with scores between 7-8. These customers are satisfied but not enthusiastic, who are vulnerable to competitive offerings.
  3. Detractors – customer with scores between 0-6. These customer are unhappy and can damage your brand, as well as impede growth through negative word-of-mouth.

 

To calculate the NPS, you simply subtract the percentage of Detractors from the percentage of Promoters.

So, if every customer is a Detractor you will have a score of -100 and if every customer is a Promoter you will have a score of 100. Thus the range is from -100 to 100.

NPS provides a good indication of your customer’s overall impression of your brand, and higher NPS scores are linked to repeat customers and referrals.

So, focusing on improving your customer’s overall experience can improve your NPS score and drive your bottom line.

 

5. Overall Customer Satisfaction Rating

 

Similar to the NPS, a Customer Satisfaction Rating (CSAT) is a good indicator of the success or failure of your customer relationship management program.

The difference is that a Customer Satisfaction Rating is typically measured on a five-point scale rather than a 0-10 scale. The scale ranges from 1, which means very dissatisfied, to  5, which means very satisfied.

You simply ask each customer to rate their level of satisfaction with your brand on a scale from 1-5.

The Overall Customer Satisfaction Rating is an aggregate of individual responses over the course of a predetermined time frame.

The Overall Customer Satisfaction Rating provides a good indication of your customer’s overall satisfaction with your brand and follow-up questions can be used to discover where you’re falling short and need to improve.

 

6. Customer Retention Rate

 

Customer retention is a metric that allows you to see how many of your customers you keep (or retain), each time a renewal period passes.

In simple terms, Customer Retention Rate is the percentage of customers you keep relative to the number you had at the start of your period. It is essentially the opposite of customer churn.

Retention is measured at  certain ongoing intervals (e.g., monthly, quarterly, or annually) which can differ depending on your business. Knowing this time period is important when calculating your retention rates.

Remember, don’t get Customer Retention Rate confused with Revenue Retention Rate, which measures dollars rather than customers.

Here is the formula to calculate Customer Retention Rate:

customer retention rate formula

 

 

7. Service Quality (ServQual)

 

Service Quality (ServQual) is a tool developed by Valerie Zeithaml, A. Parasuraman and Leonard Berry based on research they did while writing the book, Delivering Quality Service.

They found that customers care about five very specific characteristics, when it comes the service they receive from brands like yours.

In order of importance, these are the top 5 characteristics of ServQual:

  1. Reliability: The ability to perform the promised service in dependably and consistent manner.
  2. Responsiveness: The ability and willingness to help customers in a timely manner.
  3. Assurance: Demonstrating a thorough knowledge of your product and/or service and an understanding of your customers.
  4. Empathy: The ability to care for each customer as an individual and provide them with the attention they need.
  5. Tangibles: The physical appearance of facilities, equipment, personnel, and marketing materials.

Using customer assessments, you can determine where your call center meets or exceeds customer expectations and where you fall short.

Service providers should definitely consider all five characteristics, but if you must sacrifice one for another, reliability has been shown to be the most critical.

 

8. Employee Engagement

 

The final call center KPI to measure and track is employee engagement.

Employees, such as your call center agents, are the ones within your organization who will interact directly with customers.

Happy employees lead to happy customers.

For an employee to be engaged at work, they must be satisfied with the work environment, the mission of the organization, and their role in that mission.

There are various employee engagement metrics that can be tracked; such as Happiness, Personal Growth, Loyalty and Alignment, Internal Relationships (peers and managers), Recognition, Feedback, Wellness, and, of course, Job Satisfaction.

Using this list, determine what is important for you to track and use that make critical changes.

Often times, organizations don’t need complete overalls, they just need small tweaks to get it right for their employees.

If you put in the effort for your employees, research shows that they will put in the effort for your customers.

 

Measure, Report, Adjust

 

Remember, KPIs are of no value for the call center or your customer support staff, if they do not align with the KPIs of the overall organization.

And, you certainly don’t have to track every single KPI recommended above, but you should figure out which ones make sense for your call center.

Once you’ve determined which KPIs to focus on, you’ll need a set of tools for gathering the information, recording it, and reporting it.

Voxjar is a tool designed to help call center agents improve their interactions with customers by transcribing, and analyzing each call. 

Metrics can be broken down into time periods. High level KPIs can focus on a calendar year, then be divided into quarters and months.

Make sure that everyone in your organization understands what they are responsible for, and which KPIs they directly affect.

Consistently measuring KPI performance over time will allow you to see what is working and where changes need to be made.

Don’t be afraid to make adjustments as needed. Iterate slowly on your processes and test new assumptions.

Measuring, reporting, and adjusting are the surest way of achieving the results you’re seeking.

 

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