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15 Customer Service Metrics To Measure

Blog post by on September 21, 2012 3 Comments

No man is an island, entire of itself. Each is a piece of the continent, a part of the main. The same goes for customer service metrics. There is no stand-alone metric by which a customer service organization’s success should be judged. Each is a piece of the main that contributes to an organization’s foundation and breadth. The only thing you have to watch out for is trying to bring together too many metrics; a barrage of warring data can actually detract from organizing, acting upon and achieving any forward momentum.

So how do you choose which metrics to measure? In a 2012 blog, Gartner analyst Kate Leggett advises “It’s best to start by understanding the value proposition of your company. For example, do you compete on customer experience, where satisfaction measures are of primary importance, or do you compete on cost, where efficiency and productivity measures are most important?

“Once you understand your value proposition, choose the high-level KPIs that support your company’s objectives,” says Leggett.

Looking for some suggestions for reporting? In his new book Lessons Unlearned: 25 Years in Customer Service, TSIA Vice President of Technology Research, John Ragsdale, provides suggestions on 15 key metrics that span quality, financial and operational benchmarks:

Quality Metrics

1. Post-incident surveys by channel. Following an interaction, asking customers about the agent’s customer service skills, technical knowledge, completeness of solution provided, time to respond and resolve and satisfaction to measure both effectiveness and consistency across channels.

2. Self-service and/or community experience. Asking customers if they found the answers they needed and if they have suggestions to make the site or its content more useful.

3. Relationship surveys. Quarterly or annual surveys that ask about overall support experience, satisfaction with products and value received.

4. Customer loyalty. Questions that should put your customer retention team into action if answered negatively include: Do you intend to continue purchasing products from this vendor? Would you recommend the brand to your peers?

Financial Metrics

5. Gross margin. The percent of total services revenue that the service organization retains after direct costs associated with service operations.

6. Hourly labor burden rate. Salary or wages + overtime + cost of employee benefits + cost of applicable taxes using 2,080 hours per year as the standard number of available works hours to get the hourly rate.

7. Fully burdened cost per incident. Total costs divided by number of incidents resolved in a specific period.

8. Training days per year. Agent skills and training have a strong connection to productivity and customer satisfaction.

Operational Metrics

9. Incident volume by channel. Critical for staffing plans during peak times, as well as for quality control and future investments.

10. Hold time and abandonment rates. The abandonment rate is the percentage of customers who hang up the phone or leave a queue before reaching a customer service agent.

11. Incident handling time and average talk time. These should be monitored to see if individual agents require additional training or coaching.

12. Response and resolution rates. Measuring the amount of time it takes for customers to be acknowledged by a service or support agent, and then the time it takes for the interaction to be resolved.

13. First contact resolution. How many interactions are resolved upon initial engagement.

14. Escalation rates. Identifying both issues that are being escalated, on which channels and why.

15. Incidents resolved within 24 hours. Now more than ever prompt resolution is expected and appreciated.

With these 15 suggested metrics, Ragsdale notes that it’s incredibly important to begin measuring before you begin improvement efforts or implement a technology solution. Without knowing exactly where you came from, you may not realize how far you’ve come.

In Lessons Unlearned: 25 Years in Customer Service, Ragsdale elaborates on the 15 customer service metrics above and also covers employee management and motivation, knowledge management, selecting and implementing a customer service technology solution, working with analysts, advice to start-ups and the future of customer service. The book is a fantastic new customer-centric resource highlighted by Ragsdale’s personal stories and perspectives following a quarter-century of work in the customer service industry. Find out more here.

Republished with author's permission from original post.

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3 Responses to 15 Customer Service Metrics To Measure

  1. Michael Lowenstein September 22, 2012 at 3:19 pm #

    …but, does the customer service function really need 15 metrics to justify itself? Leading companies have evolved to think of Customer Service as a profit center, and a vehicle for building positive relationships and high perceived value with customers. Zappos, often identified as a service exemplar, is a good example of new age service thinking and measurement. Zappos’ CEO Tony Hsieh says it very well:

    “We really don’t think that customer service is an expense that you should try to minimize, it’s really an investment in your brand. The telephone is one of the best branding devices out there. If you wow [customers] during that interaction, that's something they're going to remember for a very long time and tell their friends about.”

    Having worked for years with SOCAP (Society for Consumer Affairs Professionals), which represents consumer affairs and customer service management at companies across the U.S. and abroad, and having extensively researched the impact of customer service (as a component of overall customer experience), it has long been my impression that this function is under the most scrutiny of any group within an organization. The number of metrics suggested to evaluate customer service performance is one example of this.

    Zappos measures referrals and speed of response (not time to complete the transaction). As a core process and value, they also do a great deal of internal coaching and self-evaluation to make the service provided a strategic differentiator. Again quoting Tony Hsieh: “What we’ve found was that repeat customers spend more than first-time customers, and they actually drive a lot of our word-of-mouth.” From there, building service metrics is pretty straightforward.

    So, is the goal measurement or customer loyalty behavior? Ragsdale’s 15 metrics notwithstanding, many companies would likely be better served measuring response time, and the positive word-of-mouth, brand perception, and advocacy behavior (including referrals) coming from customer support.

  2. Charles Naughton February 6, 2013 at 4:33 pm #

    I don’t disagree with the gist of what you’re saying. Simplicity definitely is something we all should strive for.

    With that said, the Zappos example isn’t a one-size-fits-all approach. Here’s an example: Resolution time. In a highly technical customer support organization, this is typically one of the most important drivers of customer satisfaction. It goes without saying that solving a customer’s issue in one day is far preferable to solving it in a week. As a customer, which experience are you more likely to be happy with?

    In Zappos case, it makes complete sense to avoid measuring the time to complete the transaction. After all, they are often in sales situation, and they don’t want to make their customers feel rushed by agents who are under pressure to complete the call quickly. But this approach doesn’t fly in organizations where the interaction is much more complex, and time is of the essence to the customer.

    Many of these metrics can help you to understand your business better. Use them for that purpose, and be careful when using them as a means of measuring performance as they may lead to organizational and employee behaviors that are counter-productive.

  3. Tricia Morris February 7, 2013 at 10:55 am #

    Great insights above. Thanks so much, Charles and Michael!

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