How to measure customer service performance? Introduction to the metrics of success

13 billion dollars: that’s the stunning amount of profit with which Verizon, the American telco company stands out from its competitors. Guess why? It’s thanks to their above-average customer satisfaction. Whether you’re big or small, if you live off your customers, you have to measure satisfaction. To do so, you need to know your KPIs. Let us help you.

In the world of contact centers, an enormous number of metrics are counted, for example, the US benchmarking company Metricnet is working with nearly a hundred. The question is, what to measure and what to do with the measured results. Before we go deeper into this, let us share some surprising facts. According to research on the US customer service market, the following relationship has been revealed between individual customer services and KPIs:

• 100% of the contact centers have KPIs, so something is definitely measured;
• 90% produce reports from KPIs for someone;
• 80% can define what the meaning of each KPI is;
• 60% set goals for each KPI in some time perspective;
• 30% are aware of the causes and effects of the results measured in each KPI;
• 20% use metrics to detect errors;
• 10% also take additional steps to improve their operations (to get better results in the next measurement);
• 5% use metrics to compare themselves with the best call centers in the world because they want to be one of them.

All in all, only 10% of customer services use their measurements in a sensible way. Shocking data, but it seems so obvious what to do next.

You can’t miss ROI

For starters, you should take a look at your good old ROI. ROI is the percentage of return on investment. If you invest 100 units and receive 1,000 from your investment a year later, your annual ROI = (1000 -100) / 100 = 900%. Taking and refining measurements, analyzing results, defining goals and implementing changes can be costly. If you are to gain leadership support to cover the costs, you need a plan that shows why it’s worth the effort to invest in customer relationship development.

Not all KPIs can be measured in money

On some markets, SME managers don’t have time for such “insignificant” things. However, the American market proves a clear link between the improvement of contact center metrics and business results on an empirical basis. Before showing specific measurement examples, please note that the return on investment may not only be expressed in terms of money (such as cost per contact – CPC). Some results are so-called “soft” returns, such as improved customer satisfaction (CSAT) or brand strength (NPS). It’s important to understand the connections between hard and soft indicators if you want to design ROI. Here’s an illustration of the context:

CSAT: customer satisfaction; FCR: first contact resolution; AHT: average handle time; ASA: average speed of answer; AR – abandonment rate; AJST: agent job satisfaction

So far, we’ve only guessed it, now we see it

It seems that the FCR is strongly correlated with AJS and CSAT, which is also supported by some comprehensive research. In the representative survey, the FCR and CSAT values received from customer services were compared with the following results:

It can be clearly seen that the data is organized around a linear function: where the number of cases solved by the first contact is high, there is no surprise that the customer satisfaction is rising, too. The same measurement method shows similar results between operator satisfaction and customer satisfaction (what a surprise…).

Hopefully, we haven’t said anything new, we just want to point out how obvious the relationship is between our wallet and the factors affecting each KPI. Yet only every 10th customer service is doing something to improve the organization’s numbers…

Thick profit from customer satisfaction

Here are some other analyses (also from Metricnet’s research) that show how much customer satisfaction contributes to productivity. Maybe it gives enough inspiration to go to the field of action after analyzing the results.

The first column of the first table shows the companies that produced outstanding customer satisfaction in the industries listed in the second table. The second column shows by how much the profit each company generated exceeds the company’s industry average.

Those convinced by the above amounts and profit margins can start working on improving their customer service. Draw the customer relationship KPI map, create measurement methods for each KPI, analyze your results, and build an action plan based on the outcomes. This is how you can evolve from good to great (just to quote the title of our favorite business book, which we recommend you to read). Of course, the introduction to the metrics of success does not end here, since it is worth having a well-thought-out benchmarking methodology for accurate measurement.