Customer Service Evaluation: 12 Metrics to Monitor

Customer Service Evaluation: 12 Metrics to Monitor

Introduction

In today’s competitive business environment, customer service is critical to a successful business and its growth. The quality of customer service can make or break a company’s reputation and determine its ability to retain customers in the long run. Companies must provide high-quality customer service to maintain loyalty and grow their customer base. However, more than providing excellent customer service is required. Companies must also monitor and evaluate their customer service metrics to ensure they meet their customer’s needs and expectations.

In this blog post, we will discuss 12 essential customer service metrics that companies should monitor to evaluate the effectiveness of their customer service operations.

1. First Contact Resolution (FCR)

FCR is a critical metric that measures the percentage of customer issues resolved during their initial contact with the customer service team. This metric is important because it reflects the customer service team’s efficiency and ability to resolve customer issues quickly. A high FCR rate indicates that the customer service team is well-trained, knowledgeable, and empowered to solve customer problems, which can improve customer satisfaction and reduce the workload on the customer service team. FCR can also help them identify trends and patterns in the types of issues customers are contacting them about.

When customers contact a company with an issue, they expect a quick and convenient resolution to their problem. They may become frustrated and dissatisfied with the company’s service if they cannot resolve their issue during their first contact. This can lead to negative word-of-mouth, lost sales, and even lost customers.

Ask customers if their issue was resolved during their first contact with the company. If the customer answers “yes,” the contact is considered a first contact resolution. If the customer responds “no,” the contact is not considered a first contact resolution.

2. Response Time

Response time is the time it takes for a customer service agent to respond to a customer inquiry or request. This metric is essential as customers expect a quick response when they contact customer service. Response times can lead to satisfaction and irritation, damaging the customer’s relationship with the company. Companies should set specific response time goals for their customer service team and monitor their performance to ensure they meet these goals.

Response time can be measured through various channels like email, phone, chat, and social media. Depending on the track, response time benchmarks may vary, but in general, customers expect a timely response regardless of the channel they use. By monitoring response times and taking steps to improve them, companies can increase customer satisfaction rate, loyalty, and retention.

3. Customer Satisfaction (CSAT) Score

CSAT is a metric that measures how satisfied customers are with the service they receive from the customer service team. Companies can use surveys or feedback forms to collect CSAT scores from customers. A high CSAT score indicates that the customer service team is meeting the needs and expectations of customers. A low CSAT score suggests areas for improvement in customer service operations.

Companies typically ask customers to rate their satisfaction with a specific interaction or overall experience to measure CSAT, usually on a scale from 1 to 5 or 1 to 10. Customers can also provide open-ended feedback to provide more context around their rating. Moreover, CSAT can be measured through various channels, including email surveys, phone surveys, in-app surveys, and social media polls. Companies can use this feedback to identify areas for improvement and take steps to address customer concerns.

4. Net Promoter Score (NPS)

NPS is a metric that measures how likely customers are to recommend the company to others. Companies can use surveys or feedback forms to collect NPS scores from customers. A high NPS score indicates that customers are satisfied with the service they receive and are likely to recommend the company to others. A low NPS score suggests that issues with the customer service operation need to be addressed.

To calculate NPS, companies typically ask customers to rate on a scale from 0 to 10 how likely they are to recommend the company’s product or service to a friend or colleague. Customers are then categorized into three groups:

• Detractors (those who give a score of 0 to 6).
• Passives (those who provide a score of 7 or 8).
• Promoters (a score of 9 or 10).

The NPS can be calculated by deducting the detractors’ percentage from the promoters’.

By measuring NPS and taking steps to improve it, companies can improve customer loyalty and advocacy, ultimately leading to increased revenue and business success.

5. Abandonment Rate

The abandonment rate can be defined as the rate of abandoned customer queries before getting resolved. This metric is important because it provides businesses with an understanding of how frustrated customers are with the support process. High abandonment rates indicate customers experiencing long wait times or needing help reaching customer service agents. Companies should monitor their abandonment rates and take steps to reduce them, such as increasing staffing levels or improving their self-service options.

Companies typically track the number of customers who hang up while waiting on hold or leave a chat session before their issue is resolved to calculate the abandonment rate. They divide that number by the total number of attempted contacts.

6. Average Handle Time (AHT)

AHT is the average time a customer service agent takes to handle a customer inquiry or request. AHT is an essential metric because it reflects the efficiency of the customer service team and can impact customer satisfaction. A high AHT can indicate that customer service agents take too long to resolve customer issues, leading to frustration and dissatisfaction.

To calculate AHT, companies typically measure the time it takes for an agent to handle a customer inquiry, including the time spent talking with the customer, placing the customer on hold, and any additional time spent resolving the issue after the call has ended. Companies then divide this time by the total number of calls handled to arrive at the AHT.

7. Customer Effort Score (CES)

CES is a metric that measures how easy or difficult it is for customers to resolve their issues with the company. Companies can use surveys or feedback forms to collect CES from customers. A high CES indicates that customers can resolve their problems quickly, improving customer satisfaction and loyalty.

Customers are typically asked to rate their experience immediately after interacting with customer service through a follow-up survey or as part of a post-call or post-chat evaluation.

8. Repeat Contact Rate (RCR)

RCR is a metric that measures the percentage of customer inquiries or requests that require multiple contacts with the customer service team to resolve. A higher RCR is better, as it indicates that your customers are more likely to do business with you again.

To calculate RCR, companies typically measure the number of customers who contact customer service more than once to resolve their issues. Then, they divide this number by the total number of inquiries handled. RCR can be measured through various channels, including phone calls, live chat, and email.

9. Customer Retention Rate (CRR)

CRR is a measure of customer loyalty. It is calculated by dividing the number of customers you retain over a given period by the total number of customers you had at the beginning. A higher CRR is better, indicating that your customers are more likely to stick with you over time. It can also suggest that the company meets or exceeds customer expectations and provides a positive customer experience.

To calculate CRR, companies typically measure the number of customers who continue to do business with the company over a specified period and then divide this number by the total customers at the beginning. CRR can be measured over different periods, such as a month, a quarter, or a year.

10. Average Wait Time (AWT)

AWT is when customers wait on hold or in a queue before speaking to a customer service agent. This metric is important because it helps businesses understand how long customers will wait for support. A high AWT could indicate that customers are frustrated and may want to avoid doing business with the company.

11. Service Level Agreement (SLA)

SLA measures how long it takes for your support team to respond to customer inquiries. This metric is essential because it sets customer expectations and ensures that your support team meets those expectations. A high SLA can negatively impact the customer satisfaction rate.

SLA includes multiple elements such as:

Availability refers to the hours during which the service provider is available to respond to customer inquiries or issues. The SLA may specify the hours of availability and any exceptions or contingencies for extended downtime or maintenance.

Quality Standards: This refers to the specific quality standards that the service provider must meet to deliver customer service at a high level of quality. These may include metrics such as CSATs, first-call resolution rates, or AHTs.

It also includes elements like response and resolution time.

Overall, an SLA is a critical component of customer service evaluation as it provides a clear framework for both the service provider and the customer to ensure that expectations are met and that high-quality service is delivered.

12. Churn Rate

Churn rate is a term that provides the percentage of customers who quit doing business with your company over a specific time. It’s a crucial metric to monitor as it can help companies evaluate the effectiveness of their customer service operations and identify areas for improvement.

To calculate the churn rate, companies typically measure the number of customers who stop doing business with the company over a specified period and then divide this number by the total number of customers at the beginning. The churn rate can be measured over different periods, such as a month, a quarter, or a year.

A high churn rate can indicate that customers are unsatisfied with the products or services offered by the company, the level of customer service they receive, or other factors such as pricing or competition. It can also suggest that the company needs to meet or exceed customer expectations and provide a positive customer experience.

Conclusion

Customer service evaluation is a critical aspect of business success, as it can help companies identify areas for improvement and provide a better customer experience. By improving these metrics, companies can build strong customer relationships, improve customer satisfaction, and ultimately increase revenue and business success. It’s important to note that these metrics are interconnected and can impact each other, so taking a holistic approach to customer service evaluation is essential.

Furthermore, companies should continuously monitor and evaluate these metrics, take proactive steps to improve customer service operations, and adapt to changing customer needs and preferences.