What are customer service metrics?

Customer service metrics are the key performance indicators (KPIs) that provide reliable tracking and analytics data on customer service.

Once upon a time, it may have been difficult for businesses to acquire enough relevant and reliable data relating to customer service performance. That is no longer the case. With advanced data-collection technologies becoming ever-more available, modern businesses have the power to bring together information from a variety of sources, tracking customer behavior, soliciting feedback, and placing the entire customer journey under a microscope.

However, to optimize their customer service offerings and improve the overall customer experience, organizations need to do more than simply gather data; they need to be able to refine that data into actionable insights. To do that, they have to know which customer service metrics are the most relevant.

With abundant data, focusing on certain key performance indicators (KPIs) over others can be a challenge. This is why it’s so important to remain focused on why certain metrics are being tracked, and how to employ action after insights are created. By tracking and managing the right KPIs, customer service departments can improve their performance while also positively impacting the business as a whole.

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 quantifying the costs and benefits of customer acquisition, loss, and maintenance, organizations gain greater insight into the core of their service-oriented tasks and processes.

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

Graphic showing the goals of customer service metrics.

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 primary goal of most service teams.

To cut costs without sacrificing the customer experience, 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 effectiveness

Customers aren’t the only ones whose satisfaction can have a major impact on business success; employees who interact with customers have the power to pass that excitement on, and are also more likely to provide higher quality work and be more productive.

Happy, engaged employees are vital to customer service success. The right customer service metrics can help ensure that staffing concerns are being proactively addressed. This encourages improved employee engagement, and naturally leads to a range of other business advantages.

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.

NPS and 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, showcasing the percentage difference of customers that are brand promoters vs. those who are detractors. Alternatively, CSAT is a rating of user satisfaction with a particular product or service, calculating the average response. Using both of these metrics in conjunction is important to understand a more-complete picture of customer satisfaction.

CES

Almost without exception, 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. CES is often used in conjunction or even interchangeably with NPS and CSAT.

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

It does this by taking a look at 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. This insight is vital to the overall health of a business, and customer service needs to understand 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’s 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.

For subscription-based companies (such as SaaS vendors), tracking renewal rates is absolutely essential. As key revenue drivers, renewals must be at the forefront of goal-setting for product, sales, and service teams.

Increasing customer satisfaction will lead to higher renewal rates, and good end-to-end customer service can drive renewals long term.

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 to serve

As previously stated, there is a cost investment for every company action. Businesses spend money in acquiring, serving, and retaining customers, and understanding and quantifying those costs is a vital step in identifying areas where cost may be outweighing customer service benefits. Due to the increasing costs of labor and other customer service processes, automation may be key in reducing service costs.

Case volume

Tracking and measuring customer request volume not only provides a clear picture of customer service workloads and allows organizations to accurately gauge whether they are sufficiently staffed to meet demand, but it also demonstrates trends over time. Volume can be further broken down into ‘volume by channel’ (so staffing/coverage can be adjusted) and ‘volume by topic’ (to better understand what kinds of issues customers are reaching out to resolve).

SLA adherence

Service level agreements (SLAs) are used to 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 agreements that are better suited for use in internal measurements. By measuring SLA adherence, managers can keep teams prioritized on the most important work first.

MTTR

Mean time to resolution (MTTR) averages out the amount of time it takes to resolve service issues. This allows employees and managers to not only gain insights into trends related to service; it is also valuable as an indicator of which individuals, teams, or departments may need additional training in certain areas, and whether there may be fundamental flaws in specific products or services.

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. Automation and easily available agent resources can help ensure that issues are being remediated quickly, easily, and effectively.

Simply put, happy, 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.

Employee engagement

Using voice-of-the-employee surveys and other similar tools, employee engagement is a metric used to identify and address current and potential employee issues. 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. Overworking customer-service personnel leads to reduced productivity and increased turnover. Resolving contacts via self-service options and automation not only increases customer satisfaction, it also improves employee satisfaction. 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.

Productivity measurements

There are any number of metrics that can be used to gauge agent productivity, including cases handled per day, chats handled, average handle time, and more. Productivity metrics identify areas in need of improvement. They can also give organizations clearer insight into where additional coaching or training may be needed.

ServiceNow provides customer-facing businesses with the tools and processes to identify, track, and improve vital customer service metrics.

ServiceNow Workforce Optimization offers real-time visibility into vital KPIs by channel, allowing organizations to monitor interaction, load balance, and view relevant work items. Virtual Agent and the Service Catalog improve customer self-service options, making it possible for more issues to be resolved quickly and with minimal effort. Process Optimization empowers companies to tie customer service workflows to key KPIs and gain visibility into end-to-end process flows, identifying inefficiencies and bottlenecks and improving KPI performance. Field Service Management facilitates faster, more-effective first-time resolutions. Omnichannel integration helps ensure relevant metrics are available to track, no matter where or how customers choose to interact. Agent Workspace helps increase agent effectiveness and satisfaction, using an AI-powered desktop to streamline workloads.

And, with a range of out-of-the-box dashboards, ServiceNow Performance Analytics helps customer service leaders manage and optimize their team performance and KPIs. And these are only the beginning.

With ServiceNow, put the most vital KPIs to the best possible use, and provide your customers with the high levels of service they deserve.

Make customer service flow

Results-driven solutions to help your company reach its full potential.