11 Customer Service Metrics that Really Matter To Your Business

6 min read
Customer Service
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Did you know that almost 70% of American consumers would prefer spending more money with companies who provide excellent customer service?

For modern day businesses, customer service is no longer a support function. It has a direct impact on several key organizational KPIs and is often the difference between an average company and an industry leader.

But how do you really know if your service standards are up to your customers’ expectations?

After all, almost 80% of companies believe they provide “exceptional service” to their customers. Unfortunately, only 3% of customer reciprocate that feeling.

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This is why the only dependable way of knowing your actual service standard, and making any informed decisions about it, is by calculating the right customer service metrics.

Customer service metrics are not just some fancy numbers that fill up your monthly performance dashboards. They are key performance factors that give you a clear idea of the contribution your services department is making to the overall progress of your company.

In this post, I’ve zoomed in to the most important organizational and operational level customer service metrics that you should closely monitor. Instead of stretching yourself too far, just focus on these metrics and try to maintain optimal performance against each one of them.

Operational Customer Service Metrics

1. Average Ticket Count (Daily/Weekly/Monthly)

No matter how good your product quality is, you’re bound to receive a certain number of complaints from your customers. Calculating the average number of daily, weekly and monthly tickets will help you in a number of ways.

First of all, you’ll be able to work out the standard ticket counts for different months which will help you create benchmarks for your company staff. Secondly you’ll be able to identify frequently occurring issues and determine whether they can be automated or not.

To be more precise, if you see an escalation in the number of service related tickets, you need to track the reasons and rectify them. You can use this metric to assign service targets to your support staff and gauge their performance against it.

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2. First Response Time

Image result for timing is everything

33% of customers in the US feel positive about a brand that gives a quick first response, even if it’s ineffective. The first response time of your service staff is a crucial customer service metric.

Companies that really care about their customers have quick first response times, and bind their services staff to approach clients as soon as possible. First response has the same effect with your customers as first aid. It gives immediate relief and buys you additional time to understand and resolve the customer’s issue.

The first response times usually vary with the number of customers you have. But to give you an idea, WooThemes, reports that 40% of its customer tickets are responded within 24 hours. While the rest are contacted within 48 hours.

Many Saas customers, however, expect quicker responses from their service providers. For example, this study by CMO Council shows that almost 47% customers expect a response within 24 hours while more than 22% expect an instant response.

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3. Average Ticket Resolution Time

A great indicator of the efficiency of your customer service staff is the average time they take to resolve a ticket. Having quick first response times is fine, but if you take too much time resolving the customer’s concerns, it will eventually hurt your customer experience.

But quick issue resolution times can mislead you as well. It’s a known practice among many service based companies where the support staff tags tickets as resolved without actually resolving the issue completely, only to meet their targets.

So you need to have a strong QA system that ensures that the resolved tickets actually represent resolved issues. This, again, is one of the key customer service metrics that needs to be monitored closely.

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4. Number of Interactions per Ticket

The ideal number of interactions per ticket is 0. Because you’d ideally want to resolve customer issues even before they arise. But for operational purposes, you still need to define an ideal number of interactions in which you’d want to resolve your customer’s issues.

Too many interactions can often mean that your support staff is not asking the right questions about the customer’s issue, or the customer is not being directed to the right people. So if you see the average number of interactions per ticket rising, you may need to look closely and find out the reasons for it.

5. Issue Resolution Rate

This is another important customer service metric that needs to be monitored closely at the operational level. It represents the percentage of issues your staff actually resolves from the total queries received.

Again, this requires strong QA at the back-end to ensure that the issues are actually being resolved. A rising resolution rate is a clear indication of the efficiency levels of your staff.

6. Preferred Communication Channel

This is an operational customer service metric that has organizational implications. It effectively tells you about the general preferences of your customers. For example, the majority of customers in the US prefer using direct phone calls when they face problems with a service.

According to a research by eConsultancy, US consumers prefer support from the following channels: Phone support (61%), email (60%), Live Chat (57%), online knowledge base (51%), “click-to-call” support automation (34%).

But this rate varies according to the nature of your business. So you need to track how your clients contact you and then optimize those channels for an improved service experience.

Organizational Customer Support Metrics

7. Net Promoter Score (NPS)

Image result for word of mouth

One of the best indicators of the strength and effectiveness of your customer service is the word of mouth it generates for your business. The Net Promoter Score (NPS) calculates just that. It’s often a simple question that asks your customers about the likelihood, on a scale from 0 to 10, of them referring your services to their friends.

Customers with responses from 9-10 can be classified as promoters, 7-8 as passives while the ones below 6 can be categorized as detractors. You can calculate the NPS by subtracting detractors from promoters.

To give you an idea, companies like Apple (iPhone) and Amazon recorded NPS scores of 70% and 69% respectively in 2013.

To make this customer support metric even more actionable, also add a quick question about the reasons behind your customers’ response. This will help you find out the exact areas that need to be improved. You can use tools like Promoter.io to measure NPS easily.

At the organizational level, the NPS metric will give you a strong sense of how satisfied the customers are with your product/service, and will also play a key role in your marketing campaigns.

8. Customer Satisfaction

Customer satisfaction is another key performance indicator that you need to closely track and monitor. Satisfaction is often a subjective metric and doesn’t always show you the full picture. So you need to use it in combination with other customer support metrics to make sense of it.

For example, if the satisfaction rating for a customer is high but the NPS rating is low, you’ll need to dig deeper to find out the reasons for it.

Related post: The Quintessential Guide to Measuring Customer Satisfaction

To track customer satisfaction, you’ll need to use a combination of surveys, and quick feedback ratings every time the customer makes a purchase or visits your website. Survey Monkey has a detailed manual on how SaaS companies can create effective survey questions. I recommend using it as a guideline when creating your customer satisfaction surveys.

You can match your results with the your industry benchmarks. For example, according to the The American Customer Service Index, the average customer satisfaction rating in the internet retail industry for 2014, is 82% in the US. For the internet service provider industry, this rating is 64%.

An upward trend in satisfaction means both your product quality and the service standards are up to the mark.

9. Frequency of Up-sells and Cross-sells

The boundaries between sales and services departments have blurred for modern day businesses. That is why upselling and cross-selling have become important customer service metrics for many organizations.

Upselling is when you convince your clients, often with high quality service delivery, to opt for a higher priced version of your product. Cross-selling is when you convince the clients to purchase a complementing product to the existing product/service they have.

Higher upselling and cross-selling rates mean your service departments are doing an exceptional job and successfully convincing customers to spend more on your products. This eventually improves the per customer dollar value, another key organizational KPI.

10. Customer Experience Rating

Almost 90% of American consumers are prepared to spend more money for a superior customer experience. More than your advertisements and your claims about your product, customers remember their experiences of using your product and interacting with your services staff.

Customer experiences are built upon small things like the voice tone of your service staff, their eagerness to resolve customer issues, the concern and understanding of the service staff, the time it takes to resolve their queries etc.

This is a key customer service metric because it ultimately impacts your customer retention, upselling/cross-selling and satisfaction rates. You can measure customer experience using a combination of transactional surveys and in-person feedback.

If you have a sense of your customer’s preferences, you can provide customized service to create memorable experiences.

11. Customer Retention Rate

The probability of selling to an existing customer is 60-70%, much higher than the 5-20% probability of selling to a new prospect. This clearly suggests that retaining your customers is absolutely crucial, not only for your sales figures, but also for your brand image and per customer dollar value.

Your services team has a major stake in customer retention, and that is why you need to monitor this customer support metric from their perspective. Once a sale has been made and the customer is on board, his major contact point is your service staff.

A rising retention rate means that your services team are doing an exceptional job. A decline, on the other hand, means that things are not working as they should.

Related post: A Complete Guide to Reducing Customer Churn

Wrapping it Up

You can’t improve your service standards unless you know where you currently stand. By measuring the right customer service metrics, you’ll get a clear understanding of your existing service standards and how you compare with the industry benchmarks. Once you have these numbers on your dashboard, you can make calculated moves to improve each metric and enhance the overall performance and service standards of your company.

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Jawad Khan
Jawad Khan is an experienced project manager, a content marketing consultant and a freelance blogger for hire. He's an active consultant to several tech startups and SaaS companies in the US, Middle East and Australia. Follow him on his blog Writing My Destiny, Twitter and Google+