When it comes to excelling in providing customer service and meeting your customers’ needs, there’s one thing you need to keep top of mind: your key performance indicators.
A customer service KPI metric, or key performance indicator, is a metric that gives you insight into how your team is performing against key indicators. These metrics, when analyzed strategically and in unison, can help you strategize how best to help customers and support agents and can help you determine what needs to be improved within your organization.
This post details why customer service metrics or KPIs are important, what they tell you, what metrics your teams should be tracking and why, and how you can go about improving them.
Here is the entire list of 15 customer service KPIs and metrics customer service teams need to track:
- Customer Satisfaction Score (CSAT): Measures customer satisfaction out of 100.
- Net Promoter Score (NPS): Measures customer’s desire to promote your business.
- Customer Effort Score (CES): Measures how difficult it is for a customer to do business with a company.
- Customer Retention Rate (CRR): Measures the rate at which you are retaining customers.
- Customer Churn Rate: Measures the rate at which you’re churning customers.
- Time to Resolution (TTR): Measures the amount of time it takes an agent to resolve a customer support ticket.
- Average Resolution Time (ART): Measures the average time it takes agents to resolve customer support tickets.
- First Response Time (FRT): Measures the amount of time it takes to initially respond to a customer support ticket.
- First Contact Resolution (FCR): Measures what proportion of first responses solve customer support tickets.
- Average Handle Time (AHT): Measures the average length of contact for a customer support interaction, typically over the phone.
- Employee Satisfaction (ESAT): Measures employees’ satisfaction out of 100.
- Ticket Volume by Channel: Measures the volume of tickets by channel according to an organization.
- Tickets Handled Per Hour: Measures how many tickets an agent opens and interacts with over the course of any given hour.
- Occupancy: Measures the time agents are actively working on customer support tickets.
- Self-Serve Rate: Measures the rate at which your customers self-serve and resolve their needs on their own.
At the end of the day your goal is to meet your customers where they’re at in order to support them and increase customer satisfaction. Working to track these metrics will help guide your team to success and help streamline processes for how you’re serving customers and agent needs.
Why Measuring Customer Service Key Performance And Metrics Is Important
You may be wondering why it’s important to measure customer service key performance indicators and there are a few reasons you should.
When you track KPIs you can do one of three things:
- Focus on strategic and operational improvement
- Create an analytical basis for decision making
- Help bring attention to what’s most important
Working to improve support metrics can help you resolve customer pain points and improve performance and customer satisfaction. Did you know that 27% of Americans report that ineffective customer service is their number one customer support frustration?
When you’re focused on a clear set of goals you can also make advancement to make your agent’s work day better. Focusing on improving things for customers will in turn improve things for agents.
Key performance indicators also help with:
- Measuring progress and performance
- Monitoring company growth/health
- Analyzing patterns over time
- Setting more informed goals
- Tackling new opportunities
- Informing teams of progression or areas of improvement
- Improving customer satisfaction
- Improving the customer and agent experience
KPIs are more than just stats on a screen. They show you a clearer picture of the health of your support team and can help you strategize ways to improve them.
Let’s take a look at the different categories of KPIs for your customer service organization.
Here Are The 15 Customer Service KPIs People Need to Know
1. Customer Satisfaction Score (CSAT)
When customers are satisfied with a product, service, or customer support interaction you can expect to see high customer satisfaction, or CSAT.
Organizations measure this key performance indicator to find out what their customers think about them and to see how happy they are with their organization at a specific point in time. CSAT surveys are typically presented at the end of a specific interaction such as chatting with a support rep or finalizing a purchase.
This metric is measured out of 100%. 100% CSAT means your customers absolutely love your product or service while 0% would mean no one does.
You’ve likely been served a survey that asks something like “On a scale of 1-10, how satisfied are you with X services today?” That is a customer satisfaction survey. You’ve likely glossed over it.
While CSAT does provide insight into the health of your customers, it doesn’t tell the whole story. You need other customer metrics to see the whole picture.
2. Net Promoter Score (NPS)
NPS, or Net Promoter Score is a customer loyalty and satisfaction score that company’s determine by asking customers how likely they are to recommend you, your product, or service to others.
Net Promoter Score surveys will ask, “On a scale of 1-10 how likely are you to recommend X Company to your friends and family?”
NPS is important to your organization because it can aid in predicting business growth. Your org should aim for high NPS because it shows you have a healthy relationship with your customers and they want others to know about you. They’re helping spread the word about your company and if your customers are promoting you then there’s definitely room for improvement somewhere.
3. Customer Effort Score (CES)
Customer Effort Score, or CES, measures how easy it is for a customer to do business with you. Tracking CES and figuring out what affects it the most allows you and your team to make changes and continue to strategize ways to improve it.
Studies have shown that the amount of effort a customer has to put into doing business with you is directly related to their loyalty to your product or service.
Reducing the amount of effort your customers put into interacting with your company can help increase CES. If customers are struggling to find key information on your website and need to speak to a representative to find that information, you likely have a high effort score. Making interactions and processes easier can help you win customers and keep them loyal.
Measuring CES is based on asking customers to rate them on a scale of 1-5 based on how much effort it took for them to complete a transaction, resolve a support issue, or interact with their company, product, or service.
Creating this survey is simple but your metrics will depend on whether your wording is seeking 1-star rating or a 5-star rating as good.
4. Customer Retention Rate (CRR)
How often are customers coming back to your company?
Customer Retention Rate, or CRR, is an important key performance indicator that tells your team the rate at which you’re retaining customers.
Organizations will often spend more time and effort in prospecting new customers when they can strategize ways to retain the ones they already have. By measuring CRR you can gain a better understanding of what keeps customers with your company.
CRR is presented as a % and can be calculated using three pieces of information:
- The number of existing customers at the start of a given time period (X)
- The number of total customers at the end of a given time period (Y)
- The number of new customers added within the given time period (Z)
With this data you can use the following formula for your CRR:
[(Y – Z)/X] x 100 = CRR
5. Customer Churn Rate
One metric you’ll want to measure in conjunction with your Customer Retention Rate is Customer Churn Rate, which is simply the inverse of your customer retention rate. If you’re retaining 80% of your customers, then you’re churning 20%.
You can easily calculate Customer Churn by taking the number of churned customers during a given time frame, divide it by the total number of customers during a given time frame, divide it by the total number of customers at the beginning of that same time period, and then multiply the result by 100.
Here’s your formula:
(Churned Customers / Original Total Customers) x 100
6. Time to Resolution (TTR)
Differentiating between time-sensitive KPIs can be tricky at times. We’ll do our best to detail their differences and clarify how they work in conjunction with each other as we explain their importance.
Time to resolution (TTR) measures the average amount of time between when a customer interaction is created and when that interaction is marked as “resolved.” Time To Resolution may also be called Mean Time to Resolution and abbreviated as MTTR or TTR.
TTR is important because your customers’ time is important. Serving up accurate answers is only part of delivering excellent customer service; the other piece is doing so in a timely manner and getting information to people when they need it most.
Time to resolution is the average time spent on any given conversation or support interaction. This can get tricky to calculate since there are nuances that can affect the average. Should a ticket be marked as resolved if it does not have an answer attached? Or what if an agent replies to an email but doesn’t get a response and has a pending ticket? You’ll need to have very clear definitions for your KPIs in order to ensure you’re measuring correctly.
7. Average Resolution Time (ART)
While TTR is the average time for a ticket to close, Average Resolution Time or ART is the average time taken by your support agents to solve all open tickets in a given time frame. So while TTR may be an overall average, ART will be a specific average for a specific time frame and not the overall.
This metric is also usually used on a per-agent basis which allows support team leaders to see how agents are doing in resolving tickets. Average resolution time will vary depending on the complexity of incoming support tickets and the ratio of available agents to queued tickets in the time frame you’re measuring.
8. First Response Time (FRT)
Your customers don’t want to wait. We know we don’t when we’re seeking customer support. First Response Time, or FRT, measures how long it takes a company to provide an initial response to a ticket. It tells you the average amount of time between customer contacts and agent responses.
FRT should be measured for each channel you provide customer support in. Whether you provide support through email, chat, or phone, you should measure FRT for each as they will vary and will provide valuable insight for your agents.
Here’s a chart of what good FRT should look like across these channels. This information was pulled from Zendesk’s 2020 CX Trends Report and their Multichannel Customer Care report from 2017.
|≤ 12 hours||≤ 4 hours||≤ 1 hour|
|Social Media||≤ 2 hours||≤ 1 hour||≤ 15 min|
|Live Chat||≤ 1 hour||≤ 5 minutes||≤ 1 minute|
Better FRT for your organization means you’re letting your customers know you’re there and ready to serve their needs as they come.
9. First Contact Resolution (FCR)
A key performance indicator that goes hand–in-hand with measuring First Response Time is First Contact Resolution, or FCR, which measures what proportion of first responses solve the customer’s problem.
Unlike First Response Time, FCR doesn’t encourage replying to the customer as soon as possible at any cost. Tickets will then get resolved with the emphasis that they’re all equally important. FCR is really a measurement of helpfulness. It tells you how often agents are resolving issues the first time, how helpful they can readily be the first time someone contacts them for support.
Industry standard for a good First Contact Resolution rate for support teams is approximately 74%. But this will vary depending on the nature of the request, the platform, and the organization that a request went to. Generally, you’re working on a scale of 1-100 where it’s better to be around or above the standard.
10. Average Handle Time (AHT)
We’ve said it before and we’ll say it again, your time is precious and so is your customers’. Average Handle Time is a key performance indicator that measures the average length of contact for a support interaction and is usually attributed to customer support delivered over telephone.
Average Handle Time is important because it helps you assess agent efficiency as well as the customer service organization as a whole. According to Zendesk, 66% of customers still typically resolve their issues with a company via telephone, making AHT a valuable metric for support organizations.
While Average Handle Time is usually meant to measure phone call handling, it can also help support teams who provide omnichannel support by comparing phone support AHT with other channels such as live chats and automated support.
Average Handle Time takes into account total talk time, total hold time, and number of calls handled. You calculate AHT with the following formula:
[Talk + Hold + Follow Up Time] / # of Calls = AHT
According to Call Centre Magazine, the industry standard for AHT is 6 minutes and 10 seconds.
11. Employee Satisfaction (ESAT)
Keeping customers satisfied and serving them their needs comes at the cost of your employees and customer support agents. We are often so hyper-focused on meeting customer needs that we forget to help the people who are helping them, our employees. And keeping employees satisfied is key to keeping them around.
One important metric making headlines recently is Employee Satisfaction, or ESAT, which measures how satisfied employees are with their job and how they’re treated by their employer.
Employee satisfaction feeds directly into customer satisfaction. If employees are happy with their jobs and the tools they’re provided to make it easier for them to perform, then they’ll readily and willingly serve customers with the best service possible. Happy employees make for happy customers.
On the other hand, if you’re not treating your employees well or providing them with the necessary tools to empower them in their roles, they will not want to perform or serve customers well leading to dwindling CSAT and NPS and likely an increase in CES.
You can measure ESAT by asking for feedback in the form of company feedback surveys and having conversation with employees.
12. Ticket Volume By Channel
Support volume will vary depending on the support channels you provide your customers. It’s important for your teams to track all tickets in your support queue over a given period of time.
To calculate ticket volume by channel you take the total tickets and conversations and sum them up. You can calculate this within your helpdesk when utilizing Zendesk, Freshdesk, Talkdesk, etc.
Ticket volume by channel gives you a high-level view into where customers are coming to you with their issues. You get an idea for what high and low-volume workloads look like for your agents and over a long period of time gives you insight into peak support times during the year. Having an idea for where customers and agents are spending the majority of their time allows you to manage staffing needs and strategize ways to make improvements for your teams if needed.
13. Tickets Handled Per Hour
Support metrics are usually attributed to teams as a whole but there are a few that work best on a per agent basis, such as Tickets Handles Per Hour.
Tickets Handles Per Hour tells you how many tickets an agent opens and interacts with over the course of any given hour.
It can be difficult to predict ticket volume, so when measured in conjunction with ticket volume by channel and tickets per agent, you’ll have a pretty clear picture for how much work your agents are managing on their own. This allows insight into where you can improve and how you can better assist your agents in their workloads.
One last customer service team metric you should consider tracking is Occupancy. Occupancy tells you the amount of time your customer service representatives spend actively working on tickets and interacting with customers to meet their support needs.
Occupancy includes time spent answering customer support chats, answering phone calls, and reducing ticket volume. According to Zendesk, calculating Occupancy can be done with the following formula:
(Total Handling Time / Total Time Logged Handling) x 100 = Occupancy Rate %
Measuring Occupancy helps support teams and their managers determine and have insight into how busy their representatives are. If one agent is much busier than another, there’s likely something off that could be improved.
Target Occupancy ranges from 75-85% but the ideal percentage will vary depending on agent bandwidth.
15. Self-Serve Rate (SSR)
We’re seeing more and more about customers hoping for self-service in customer support. In fact, 70% of customers now expect a company’s website to include a self-service option.
Self-service allows you to provide online support to customers without requiring the interference of a support representative. Most companies will provide robust knowledge bases and automated support through web widgets or email forms.
Self-Serve Rate, also known as Self-Service Completion Rate, is a KPI that analyzes the effectiveness of a company’s self-serve options. SSR can also help determine the helpfulness of a helpdesk and support team by measuring the percentage of issues users are able to troubleshoot through them.
When you’re using the right tools for your teams and customers you can help improve SSR and other metrics by alleviating repetitive communication for tickets and enabling better automation that actually helps customers.
What is a Customer Service KPI Dashboard?
These KPIs are best shown and displayed within a KPI dashboard. A customer KPI dashboard is a tool that displays key performance indicators and company metrics within interactive tables and charts which allow for organized analysis of performance data. With a KPI dashboard support leaders or team members can get a holistic overview of how they’re performing when it comes to providing customer service.
Every organization has goals and long-term objectives they’re trying to reach. Whether they’re business-wide or team-specific, having insight into how your teams are performing (and where they could improve) can help you strategically meet customer needs and expectations as they change.
Leveraging AI To Improve Customer Service Metrics
When you have the right tools to get the job done you can accomplish anything your teams set their minds to. Many support organizations struggle to find the proper solutions that will empower them to do more for their customers and agents and actually improve metrics and give insight into the health of support.
The thing that could boost metrics, make for better support, and help scale your org comes in the form of customer support AI.
By utilizing customer support AI within your customer support interactions, your teams have the ability to:
- Automate repetitive tasks and reduce response times
- Improve self-serve rates for your customers with better processes
- Deflect and automate redundant agent tasks
- Reduce first contact resolution rates for your reps
- Gain insight into where to re-strategize and change goals
Key performance indicators are just the start of what you can pull together to make better customer and agent experiences.