The primary objective of customer service should be the same as the primary objective of the entire organization: to improve business by optimizing the customer experience. To do this, effective customer service teams focus on three specific goals.

Increasing customer satisfaction and retention

Generally speaking, happy customers mean successful business. By measuring the costs and benefits of acquiring, losing, and maintaining customers, organizations gain a deeper understanding of their service tasks and processes.

This provides essential insights into customer expectations, allowing the business to better serve their needs and more effectively address potential issues that may arise. At the same time, customer service agents gain a clearer understanding of how their work directly affects the business.

Optimizing operational efficiencies while reducing costs

In business, there is a cost associated with every action. Reducing the cost of providing customer service without negatively impacting the quality of the service is a priority for most service teams.

To cut costs without sacrificing the customer experience, many businesses focus on improving operational efficiency. Using the right KPIs, organizations can review and evaluate the effectiveness of their customer service efficiency strategies, making necessary course corrections and ensuring that the company’s success remains top of mind.

Improving agent satisfaction and limiting risk

Customers are not the only ones whose satisfaction can have a major impact on business success—agents who interact with customers have the power to pass that excitement on. They are also more likely to provide higher quality work and be more productive.

Happy, engaged agents are vital to customer service success. As the work environment changes, metrics and KPIs used to measure agent satisfaction can be acted on to proactively address staffing concerns, leading to bottom-line improvements amongst other benefits.

Sometimes, it’s easy to see when customers are unhappy and why. But increasingly, customer satisfaction and the root causes of various related issues may not be so clear. These metrics can help organizations develop a more accurate picture of the customer experience and what might be affecting it.

Net Promoter Score (NPS) and Customer Satisfaction Score (CSAT)

Although customer satisfaction is a complex entity that may depend on a variety of factors, sometimes understanding the customer experience is as simple as asking the right questions. Net Promoter Score (NPS) and Customer Satisfaction Score (CSAT) are two survey-based metrics designed to solicit actionable customer insights directly from the source.

NPS is a metric that calculates the likeliness of a customer generating positive word of mouth for a business. On a scale from 0-10, up to 6 are detractors, 7-8 are passives, and 9-10 are promoters of your company. Customer Satisfaction Score (CSAT) is a different metric. This is a rating of user satisfaction with a product or service, calculated using the average response. Using both of these metrics together is important to understand the full picture of your customer satisfaction.

Customer effort

Customers are happier when they don’t have to put in as much work. The customer effort score (CES) takes a closer look at customers who are attempting to have an issue resolved, and how much effort they need to invest to see it through to completion. As this test is more subjective, this metric is best used in addition to NPS and CSAT for clearer understanding of the customer service landscape of your organization.

In essence, CES measures how easy it is for customers to do business with a company. Organizations can apply insights gained from CES surveys to reduce friction in the user experience, better tailor self-service options, pinpoint areas that demand improvement, and develop a clearer understanding of their customer service landscape.

Customer churn

It is natural to lose some customers, but if a significant percentage of customers are falling away, that may signal larger issues. Customer churn is an extremely important metric in customer service since it allows businesses to measure retention levels among their customer base.

It does this by measuring the percentage of customers that leave during a given time period. This provides an accurate assessment of how many customers are being lost during the customer journey. Understanding customer growth or loss over a period is vital to any customer service organization and can show what service- and non-service related issues might be impacting it.

Product adoption

Customers don’t appear ex nihilo—they are attracted to do business with an organization based on the products or services it provides. Product adoption is a metric that takes this truth into account, tracking the rates at which customers learn about new products, and decide to purchase and use them.

It is worth recognizing that purchase rates may not always coincide with adoption rates—a customer may choose to purchase a product, but never actually implement it, resulting in low adoption. Low adoption can easily lead to reduced customer loyalty and increased customer churn. However, improving points of service like self-service can lead product adoption rates to begin to climb.

Renewal rate

Renewal rates are another vital metric to a subscription-based business, like SaaS companies. Renewals are a key revenue driver, meaning this metric must be at the forefront of goal setting for product teams. Increasing customer satisfaction will typically lead to higher renewal rates, so customer service through omni-channel contact centers and self-service points can drive renewals long term.

Cost to serve

By measuring the cost of acquiring, serving, and retaining customers, an organization gains insights into the shortcomings of their offerings and where costs outweigh customer satisfaction-related benefits. In operations like customer service, where labor and other processes can be expensive, automation can be incredibly valuable.

Check out Virtual Agent to see how an organization can lower its cost to serve. This metric may be a difficult one to track without visibility across the organization, and this is exactly where ServiceNow’s Performance Analytics can simplify the reporting process.

Although many customer service metrics include the added benefit of improving business efficiency, operational KPIs are more directly focused on operational performance and cost effectiveness. These metrics help detail the effectiveness of operational efforts and how they contribute to a business’ success.

Cost of service

As organizations and their revenues grow, it is no surprise that expenses to maintain customer satisfaction and efficient service will grow as well. However, by tracking this metric, managers can indicate where expenses are growing faster than revenues to limit burn. Due to the increasing costs of labor and other customer service processes, automation may be key in reducing service costs.

Service-level agreement (SLA) adherence

Service level agreements (SLAs) establish expectations of service from a business. These can be formal, contractual obligations, where failure to provide agreed-upon service levels can result in penalties or legal action. They can also be informal, simply referring to the fact that customers expect a quality experience for service and platform products at all times. By measuring SLA adherence, managers can keep teams focused on the most important work first, maintaining customer satisfaction and helping renewal rates in the long term.

Mean time to resolution (MTTR)

Mean time to resolution (MTTR) averages out the amount of time it takes to resolve service issues. This KPI is especially important since customers expect their inquiries to be met with prompt responses. It can highlight flaws in specific products or areas where teams may need additional training.

First time complete rate

Customers who reach out to a business to resolve a problem may not be overly happy having to invest the time or effort, but when they have to reach out multiple times to resolve the same problem, their satisfaction is likely to take an even bigger hit. The first-time completion rate measures the percentage of customer service cases or field service work orders that can be resolved in a single contact. To assist this metric, organizations can look to automate their customer service toolkit using solutions such as Virtual Agent.

Simply put, engaged agents provide better customer service. As such, tracking agent satisfaction is vital to quantifying and improving customer service in any organization. These metrics provide deep insight into agent effectiveness.

Agent engagement

This internal metric tracks agent engagement through voice-of-the-employee surveys and other similar tools to identify and address employee issues before they arise as well as in the present. Attrition rate is a similar metric to measure the satisfaction of agents and employees.

Contact deflection

Every new contact puts additional strain on a business’ resources, as well as adding to the workloads of individual agents. Agents that are overworked are less productive and tend to leave the organization quickly. Helping both employees and customers, the more often a contact is resolved via self-service, the better. Customer surveys and internal trackers can build this metric, allowing manager insight into where customers are best able to answer their own questions and concerns.

Implementing customer service KPIs can make a significant difference for customer support operations, but it has to be done the right way. Following these best practices can ensure that organizations get the most out of the metrics they choose to implement.

1. Choose the right KPIs for your goals

It’s important to select metrics that truly reflect your customer service goals. Your business likely tracks various data points, but identifying which ones align with your objectives is essential. Some of the most common KPIs used to measure customer service performance include:

• Average response time
• First call resolution
• Customer satisfaction scores

2. Choose only KPIs that are measurable

KPIs need to be based on data that you can reliably obtain and measure. Think about the data points necessary for monitoring a specific KPI, whether you have the technology and resources to access this data, and whether you can afford the necessary processes and tools.

3. Make sure your KPIs and metrics are accurate

Accuracy is crucial when it comes to relying on data for decision-making. After all, inaccurate data can lead to misguided strategies and wasted resources. For example, if one of your KPIs is to reduce response time, make sure you have reliable data sources like customer service software that accurately tracks response times. Avoid relying solely on subjective data like self-reported response times from agents, as these can be biased or inaccurate.

4. Ensure that all KPIs and metrics are actionable

It is also important to measure aspects of customer service that you can directly influence and improve. If your KPI is to increase the customer satisfaction score, you need to track actionable metrics like resolution time and agent performance. These metrics will help you identify areas for improvement and implement strategies to achieve your goals. For instance, if satisfaction scores are low due to long wait times, you can take targeted actions such as hiring more staff or optimizing workflow processes.