KPIs review in customer service
Key Performance Indicators (KPIs) are, as the name suggests, crucial to the development of any business. As Peter Drucker, a prominent management expert once said, "you cannot manage something that cannot be measured." If you don't measure KPIs, how would you rate the success of your activities? It is important to know which KPIs to use and when. Which metrics are most commonly used in customer service?
If you are serious about improving customer service in your organization, you need to track the relevant KPIs. Let's start by explaining what KPIs are.
Key Performance Indicators (KPIs) are measures that allow to assess the level of achievement of the goals of a given organization, as well as determine whether the company is working properly, identify areas of ineffectiveness, and observe changes taking place in the company. These are essential management tools that any business can - and should - use.
The research carried out by BOTWISE shows that the overall efficiency indicator most commonly measured by managers and directors of Polish customer service departments is NPS, while in the telecommunications industry it was First Contact Resolution FCR, and in IT the most frequently measured KPI was the quality of customer service. Regardless of the industry, however, tracking customer service KPIs is critical to any company's financial success.
See which KPIs are most often measured by customer service departments around the world!
First Contact Resolution (FCR)
The FCR indicator, i.e. First Contact Resolution (sometimes referred to as First Call Resolution), gives information about the percentage or number of contacts with the contact center that resulted in solving the customer's problem during the first call or conversation. This is a great way to determine how effective customer service specialists are at solving problems quickly, efficiently; without having to transfer the client to another agent or call back.
FCR is expressed as a numerical indication of the percentage of contacts or calls that were resolved during the first contact – the best score is 1. The lower the fraction, the worse, so a value of 0.5 indicates that two contacts with customer service were required to resolve a customer problem.
According to an Ascent Group study, 60% of companies that have measured FCR metrics for at least a year have improved their performance by up to 30%.
Net Promoter Score (NPS)
Proposed in 2003 by Fred Reichheld in the Harvard Business Review, Net Promoter Score was to be a measure of customer loyalty and an alternative to traditional customer satisfaction surveys. According to the researchers' assumptions, the NPS value was to be correlated with the increase in revenues.
The NPS values are calculated based on the answers to the question "What is the probability that you would recommend [brand] to a friend?" The answers are scored on a scale of 0-10, where 0 means that the respondent does not intend to recommend anything to anyone, and 10 is a guarantee that the customer is satisfied and will certainly recommend a product, service, or company to a friend. People who check 9 or 10 are "promoters", those who say 7 or 8 are "passive" and the rest are in the "critics" group.
NPS quickly gained popularity around the world as an effective and easy-to-implement method of measuring customer loyalty and satisfaction. Although it is probably the most recognizable KPI to date, the opinions of experts who trust it with a quick retirement have been growing for several years. According to critics, the NPS measures intention, not actual behavior, and has no actual correlation with revenue growth.
Customer Effort Score (CES)
Do you want to gain a regular customer? Never make him exert too much effort. This is the premise behind the creation of the Customer Effort Score indicator, which is increasingly gaining popularity among customer service departments concerning the Net Promoter Score indicator. Unlike NPS, which emphasizes sourcing "promoters" to recommend the company to others, CES focuses on creating an "easy-going experience" for customers.
Customer Effort Score measures the effort put by customers in solving a problem or getting a service offered by your company. During the survey, customers are asked to rate the ease of use of the products or services, for example by asking to what extent they agree with the statement "The company helped me solve my problem."
Several types of CES surveys differ in how they are calculated and assessed. As part of the Likert Scale, respondents are asked to answer the question at the compliance level, usually on a 5- or 7-point scale, from 1- "strongly disagree" to 5 - "strongly agree" (or from 1 - "absolutely not" to 7 - " absolutely yes "). CES is also measured on a 1-10 point scale, as well as using colored emoticons that make it easier for respondents to respond intuitively.
Consumer Satisfaction Score (CSAT)
CSAT stands for Consumer / Customer Satisfaction Score, which translates as "Customer Satisfaction Score", and - as the name suggests - is an indicator that measures the level of customer satisfaction.
How it's working? CSAT is most often measured with just one key question: "How would you rate your overall satisfaction with the product or service you received?" The respondents then choose their answers on a specific scale. The obtained results are then averaged to calculate the average customer satisfaction score. Most often it is a percentage, where 100% means that all customers were satisfied.
Assuming a scale of 1-5 is used, the CSAT score is calculated based on the number of respondents who chose 4 (satisfied) or 5 (very satisfied), called the "first two field measure".
Average Speed of Answer (ASA) and Average Wait Time (AWT)
Both Average Speed of Answer (ASA) and Average Wait Time (AWT) are KPIs that are most often encountered in a call center. These are KPIs that measure the average customer waiting time to be connected to the hotline. What's the difference?
AWT, i.e. the average waiting time of the client for connection with the consultant, is counted from the moment of starting the connection, while ASA is the average waiting time for the connection, counted from the moment the service is completed by IVR *.
Depending on the industry and problem complexity, the average "optimally low" client connection time should be 30 seconds.
* IVR (Interactive Voice Response) is an automated telephone system technology that allows callers to the hotline access to information via a pre-recorded voice response system without speaking to an agent, as well as using voice dial or keypad menu options to redirect their call to specific departments or specialists.
Call Abandonment Rate
Some time ago, on the BOTWISE blog, we mentioned that a study conducted by Uniphore after the outbreak of the global COVID-19 pandemic showed that as much as 72 percent of the respondents terminated the connection before contacting the hotline consultant.
Call abandonment rate is the percentage of people who hang up before being able to contact a call center consultant. It is usually expressed as a percentage, e.g. if the call center answers 1000 calls a day and 50 are dropped, the drop rate is 5%. A call abandonment rate of 5 to 8% is considered normal, however, this value may vary depending on the specifics of a given industry.
Measuring this KPI in a call center helps to implement the right strategies to provide clients with real-time active support and optimize their experience.
Average Handle Time (AHT)
Average Handle Time (AHT) is a key performance indicator that tells how long it takes a consultant to handle one customer. The AHT measurement usually starts from the moment the client initiates the call and includes the waiting time for the connection and the tasks that follow the conversation or interaction until the agent can start the next conversation or chat.
AHT is the main factor when deciding on the employment level in a call center. Knowing how long each interview is likely to take helps managers plan the consultants' work as well as see which employees may need additional training.
Using tools that facilitate quick access to information can lower AHT and lead to significant cost savings and increased employee productivity.
Customer retention rate
Customer retention rate is expressed as the percentage of the company's current customers who remain loyal to the company over a given period.
It is a KPI that can help companies assess the effectiveness of their marketing strategy or the quality of customer service. It is worth remembering the research of experts, which shows that increasing the customer retention rate by 5% increases profits by 25% to even 95%.
Employee Turnover Rate (ETR)
Employee Turnover Rate is the percentage of employees who leave the company within a certain time. It can be easily calculated by dividing the number of employees who left the company by the average number of people employed. If the ETR is high, it is probably a good idea to look more closely at the company's culture and work environment.
