As the Customer Experience Manager at Dr. Squatch, a men's naturally-derived personal care company, I’m constantly looking for ways to craft exceptional experiences for our customers. But the question to ask is: does it actually make a difference to our revenue?
Unearthing the impact of your customer service team starts with evaluation. To do this, it’s essential to track metrics and key performance indicators (KPIs) around customer service.
Evaluating the impact of a customer service team can sometimes be an ambiguous task. That’s why I’m here to outline the most important customer service metrics to watch, so you can effortlessly recognize the ways your customer service team directly moves the needle.
What is customer support evaluation?
Customer support evaluation is the process of measuring your customer service program's impact on the business.
It requires using metrics and KPIs to understand whether your support team is providing a great customer experience that can generate repeat customers, positive reviews, referrals, and more.
Evaluating your customer support also requires understanding the return on investment (ROI). In other words, do the benefits produced by your support efforts outweigh the cost of your support program?
The benefits of evaluating customer service
In almost every business, a developed support program is worth its weight in gold. Evaluating your program is how you prove it to company leadership, earning you additional budget for tools and team members.
You can think of a strong customer experience as a rising tide that lifts all ships — the impact is vast but also hard to quantify.
At Dr. Squatch, we’re close with our customers and even closer to the numbers. Once we started employing a data-driven approach to customer service, it made a huge difference in both customer satisfaction and hitting company targets.
Let’s look at the five incredible benefits you get after you make evaluation a regular part of your customer service program.
1) Detailed insight into your customers’ needs
Customer inquiries are a treasure trove of rich data for you to dig into to create a better experience for future interactions. By evaluating metrics like customer satisfaction (CSAT) or average resolution time, you can identify key trends and issues online shoppers are dealing with.
On Gorgias, your incoming tickets are automatically sorted by AI-powered intent and sentiment detection, giving you a quick overview of which customer issues should be at the top of the list.
2) Identifies which customer service tasks can be automated
It’s not enough to have a talented team replying on behalf of your brand. You need to make sure your team is focusing on the right activities and not wasting their time on the wrong ones.
By measuring metrics related to your team’s performance — like first response time and resolution time — you can identify which tasks can be done with automation. You’ll also be able to figure out which agents on your team may need more training and support.
3) Balances your revenue and expenses
Customer acquisition is becoming more expensive, so keeping track of customer service can give you an idea of how much customer service truly provides within your organization.
4) Lets you calculate the true customer lifetime value
True lifetime value is the measure of a customer’s worth over the duration of the customer-business relationship.
Keep in mind, it’s less expensive to keep current customers than to find new ones. This is increasingly true as customer acquisition costs and social media ad prices soar.
5) Helps to create predictable support quality
Solid customer support quality is predictable. And that’s not a bad thing. That means when anything new, surprising, or daunting happens, you don’t need to call in a special task force.
Thanks to your stable operations, your whole team will simply need short-term and long-term action plans, like establishing a list of steps to take and point of contacts and to inform.
Four key indicators that your customer service program needs a makeover
Beyond bad reviews and customer complaints, there are a few quick ways you can tell if your customer service program is not doing well.
These four key indicators are major signs that your customer service program needs some refining.
1) High contact rate (over 33%)
A contact rate of over 33% means something about your customer journey, communication, or product is not quite right. Your customers aren’t getting the answers they need.
The goal of your customer service team should always be to resolve tickets efficiently. If a customer has to reach out to your brand multiple times, you most likely need to update your support resources.
Leading indicator: Multiple touchpoints per customer
How to fix it: Include more self-service options to give customers quick answers without having to wait to talk to an agent. Add a Help Center, chat widget, or send informative confirmation and post-purchase emails. For example, our chat widget at Dr. Squatch suggests common questions and answers them via an automated quick response flow based on the customers’ reply.
2) A customer satisfaction score (CSAT) under 4/5
Your customers should be coming away from interactions feeling good about your brand and the support it provides. There’s no acceptable reason for a low CSAT score, so you should always take a closer look when it starts to fall.
Leading indicator: Friction in customer conversations
How to fix it: Provide additional training to your support agents to ensure they’re equipped to handle the most pressing customer requests effectively and empathetically. Then, actively seek feedback from customers and use their input to make continuous improvements to your program.
3) Inconsistent first response time and resolution time
Your first response time (FRT) will fluctuate, and most people understand that, but waiting 4 days for an email from support is unacceptable for today’s shoppers. In general, customers want answers within 10 minutes.
Leading indicator: More customer complaints and a low CSAT
How to fix it: Align with your team and identify your customer base’s main complaints. To deflect repeat inquiries, immediately add self-service options like a Help Center or a chat widget to your online store. You can also use automated responses to acknowledge inquiries right away.
4) Significant percentage of revenue spent on support
Ecommerce companies should aim to spend anywhere from 10% to 15% of revenue on customer service. If you’re spending significantly more than that, it may be a sign that it’s time to reprioritize and take a closer look at how your agents are performing.
Leading indicator: Low agent efficiency
How to fix it: Analyze ticket volume and estimate how many tickets each agent should be able handle and in what set amount of time. When expectations are set within a service level agreement (SLA), align your team and train them on your new methods.
Challenges that impact your customer service program
Managing a customer service program comes with challenges that typically start from the top of the organization and quickly become a domino effect.
Here are the most common challenges a customer service program faces:
- A lack of buy-in from your company. Executive teams may not understand the value in investing in a support team. They often think customer service is there to keep problems away, instead of bringing new value in.
- Under-supported agents. A lack of trust in the customer service team trickles down to agents. It results in insufficient resources and, in turn, overworked and unmotivated support reps.
- Inadequate policies and guidelines. Since agents don’t have the proper resources, the quality of policies take a hit. Whether customer-facing or internal, these policies can suffer from being too broad or unenforced.
- High ticket volumes. An non-cohesive team ultimately affects how customer service runs and the biggest indicator is a workflow that can’t handle a large number of customer inquiries.
These challenges usually exist for one reason: your company hasn’t seen the tangible value your customer service program brings.
So, how do you prove it? By prioritizing data collection and evaluating your customer service program, of course.
📚 Read more: 12 customer service challenges harming your team and revenue (+ how to solve them)
How to evaluate your customer service program’s success
Let’s dive into 12 of the most important customer service KPIs to track to help evaluate your customer service program. By doing so, you’ll be able to recognize how the assistance you provide directly impacts your goals, revenue, and customers.
Note: It’s hard to create a one-size-fits-all reporting template — due to the differences between industries and companies — but a solid understanding of these metrics will help you create a plan for tracking the ones that matter most to your business.
1) Customer satisfaction score (CSAT)
The customer satisfaction score tracks how satisfied customers are with your company’s products and services. A high CSAT is a reliable measure of good customer service.
How is it measured?
First, you’ll need to collect customer data through a customer satisfaction survey, typically sent through email. It includes a single question like, “On a scale from 1 to 5, how satisfied are you with your experience today?”
Once you’ve collected enough responses, use this formula:
CSAT = (Satisfied customers / Total customers surveyed) x 100
Tools for measuring CSAT
There are a ton of tools out there to help you track your organization’s CSAT, but a few to check out include:
Why is it important?
Tracking your company’s CSAT gives you important insight into exactly how satisfied customers are right after an interaction with a member of your team. It can even help identify potential issues before they grow too large.
2) Net promoter score (NPS)
Net promoter score (NPS) measures how likely a customer is to recommend your brand to another person. It indicates how effective your customer service is as well as how satisfied customers are by gathering data about how likely they are to promote your brand.
How is it measured?
Like measuring CSAT, you can use a survey approach. Through email, you can ask your customers, “How likely are you to recommend our brand to a family member or friend?”
To determine your NPS, subtract the percentage of detractors (people who say they wouldn’t promote your brand) from the percentage of promoters (those who said they would promote your brand). The resulting score is a whole number between -100 and 100.
Here’s the formula:
NPS = Percentage of promoters - Percentage of detractors
Similar to tracking CSAT, NPS data can be continuously gathered, but we recommend checking in on a monthly basis.
Read more about NPS scores and how they’re calculated.
Tools for measuring NPS
Check out our guide to how to create an NPS survey that gets responses.
Why is it important?
Your brand’s NPS directly ties to the customer relationship as well as how well your customer success team is doing. Tracking NPS along with CSAT can give you a clearer picture of how customers feel about your brand.
3) Customer retention rate (CRR)
As mentioned previously, retaining customers is always less expensive than finding new customers, that’s why your customer retention rate is a vital metric to keep track of. In particular, ecommerce companies have an average CRR of about 30%, according to Omniconvert, so if your company’s CRR is lower than that, it could be a sign that your customer support isn’t as effective as it could be.
How is it measured?
To calculate CRR, you’ll need the following information: number of customers at the end of a given time period (E), number of customers gained within that time period (N), number of customers at the beginning of the time period (S).
Then, plug those numbers into this formula:
CRR = [(E-N)/S] x 100
Tools for measuring CRR
Why is it important?
Your company’s ability to retain customers directly relates to its success because when customers disappear, so does revenue.
4) Net retention rate (NRR)
Sometimes known as net dollar retention (NDR) or net revenue rate, NRR is the percentage of recurring revenue retained from your existing customer base over a period of time. This period can be monthly, quarterly, or annually. According to Klipfolio, a good NRR can range between 90% and 125% depending on your brand’s target customer size.
How is it measured?
NRR = [(Monthly recurring revenue (MRR) at the start of a month + expansions + upsells - churn - contractions) / MRR at the start of the month] x 100
Tools for measuring NRR
Why is it important?
Net revenue retention is another extremely valuable metric that helps you understand how your customers are feeling about your brand and products, as well as how your business is doing from a financial standpoint.
5) First reply time (FRT)
First reply time, or first response time is how long it takes one of your customer service reps to respond to a customer inquiry on average. This could be over email, phone, or chat. Typically, a “good” first reply time is less than 24 hours in a ticketing system, less than 90 seconds for live chat, and three minutes for phone, according to Klipfolio.
If your brand dedicates a lot of time to live chat, check out these metrics specific to live chat.
How is it measured?
You can calculate your first reply time by measuring the duration of time between when a customer submits a request and the time when a member of your customer support team responds.
FRT = Total first response times during period of time / Total number of tickets resolved in that period
Tools for measuring FRT
Why is it important?
First reply times are directly related to your brand’s CSAT. No customer wants to wait days for an email response, or sit on hold for several minutes. Decreasing your first reply times will inevitably increase customer satisfaction.
6) First contact resolution (FCR)
First contact resolution, or first call resolution (FCR), measures an agent’s ability to resolve a customer’s problem or question within the first interaction without requiring a follow up. The average standard benchmark for FCR is 70% to 75%, according to global research.
How is it measured?
You can use this simple formula to calculate FCR:
FCR = Total number of inquiries resolved on the first call / Total number of unique inquiries
Tools for measuring FCR
Why is it important?
Your company’s FCR also directly ties to boosting customer satisfaction. According to McKinsey & Company, 83% of customers expect to be able to resolve their complex issues within one interaction. When you meet customer expectations, you encourage brand loyalty and repeat customers, and reduce encountering difficult customers.
7) Average resolution time (ART)
Customers are happier when they don’t have to wait a long time, and average resolution time (ART) is another metric that keeps track of this data. ART shows how customer service team members are performing, and lets you see who may need additional training or support.
How is it measured?
To measure average resolution time, take the total duration of all resolved conversations and divide that by the number of customer conversations that took place over a specific period of time. This metric is also sometimes referred to as the mean time to resolve, or MTTR.
ART = Total resolution time for all resolved tickets / Total number of tickets solved
Tools for measuring ART
Why is it important?
Your ART is a vital metric that helps keep tabs on how efficient your customer service team is. If your ART is long, or you notice that it’s getting longer, this is a sign that you need to give your processes a closer look and adjust your strategies if needed.
8) Total resolution time
Resolution time is the total time it takes to complete a customer interaction. This is similar to average resolution time, but focuses on the total time spent resolving tickets rather than the average time spent resolving tickets.
How is it measured?
To measure your total resolution time, note the start and end time of each customer conversation over a specific time frame, such as a one-month period.
Measuring your total resolution time doesn’t require a formula, but is much easier to track with a helpdesk that includes support performance statistics like Gorgias.
Tools for measuring total resolution time
Why is it important?
Total resolution time gives you a deeper look into how long your customer service team spends helping customers solve their issues, which can help inform further strategy and business direction.
For example, if the total response time steadily increases over several months, you may need to look at hiring additional customer support reps.
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9) Customer effort score (CES)
Your customer effort score (CES) tracks how much effort customers feel like they need to put into resolving an issue. The effort customers should have to put into resolving the issue should be minimal, so you want this score to be as low as possible.
How is it measured?
To measure your brand’s CES, you can use a questionnaire with a scale and ask the question, “On a scale of 1 to 5, how easy was your experience today?” with 1 being “very easy” and 5 being “very hard.”
Once you have your responses, tally up how many of each score you received — meaning, how many times were you rated a 1, a 2, etc. Then, you can use this formula to determine your CES:
CES = Percentage of “very easy” responses - Percentage of “very hard” responses
Much like NPS, CES is a whole number between -100 and 100.
Tools for measuring CES
Why is it important?
CES gives you the opportunity to see how your support team is performing through the eyes of your customers. It can also help identify areas for improvement within your operations if you give customers a place to voice feedback within your questionnaire.
10) Conversation abandonment rate
Your brand’s abandonment rate is a simple, yet highly informational metric. Whether the conversation is happening via email, chat, or phone, if a customer abandons the session, it should be a red flag that there is friction in the process.
How is it measured?
All you need to track is the number of abandoned incidents and the total number of incidents. In this context, “incidents” refers to either calls, emails, or live chat sessions. Once you have those two numbers, you can plug them into the following formula:
Conversation abandonment rate = (Number of abandoned incidents / Total number of incidents) x 100
Tools for measuring conversation abandonment rate
Why is it important?
A customer abandoning a conversation they initiated is a bad sign and can lead to poor net promoter scores and high churn rates.
11) Contact rate
Contact rate, also known as customer contact rate, measures the percentage of active customers who ask for help in a given time period — usually a month.
How is it measured?
To calculate your company’s contact rate, you can divide the number of customers who contact your customer service team for help over the course of a month by the number of total customers. Then, multiply that number by 100.
Contact rate = (Number of customers who contact you in a month / Total number of customers) x 100
Tools for measuring contact rate
Why is it important?
Contact rate is helpful in diagnosing your company’s overall health. For example, a high contact rate may indicate that customers are contacting your support team about everything because you don’t have alternative resources like a Help Center or FAQ page.
12) Backlog
Otherwise known as revenue backlog, backlog is a metric that determines how much revenue will be coming into your business. This metric can be especially helpful if you’re an ecommerce brand that operates on a subscription-based model.
How is it measured?
The only thing you need to determine your revenue backlog is the sum of the values of your customers’ subscriptions. However, this can be much more complicated in practice if your business model has multiple types of subscriptions, so it’s beneficial to use tools to track this metric.
Tools for measuring backlog
Why is it important?
Keeping tabs on your revenue is vital to ensuring the growth and continued success of your brand. By tracking your revenue backlog, you’ll be able to see if revenue is going to drop before it actually does.
How to evaluate individual agent performance in 5 steps
Understanding your customer service program at an organizational level is an excellent step. But what about individual employee performance?
A customer service performance review is key. It gives the agent constructive feedback and provides clear guidance for improvement. The goal of a performance evaluation is to assess their abilities, yes, but also motivate them towards even better performance.
Let’s look at the common performance review phases step by step.
1) Decide the objective of your review
Lay out the objectives of the review. Is it to assess past performance, set future goals, identify areas of improvement, or all of the above?
2) Analyze relevant data
Take a look at the relevant metrics to gauge agent performance. Make sure you have a record of any previous performance reviews, goals set, training undergone, and feedback received.
Key metrics to pinpoint individual performance:
- First contact response time
- Total resolution time
- Average ticket volume
- Error rate
With Gorgias, it’s easy to keep track of every agent’s performance with Support Performance Statistics. Their intuitive dashboard provides a quick look at the health of your support team and even gives you detailed information on each of your team member’s stats, like their first response time, total closed tickets, and more.
3) Run a soft skills and behavioral assessment
How effectively does the agent communicate with customers? Are they clear, empathetic, and responsive? Assess the agent’s ability to diagnose customer problems and find solutions. Look at important customer service skills like problem solving, communication skills, as well as teamwork skills.
4) Present your findings to the agent
Share the metrics you’ve collected and any feedback received from customers. Present this so customer service agents understand how customers perceive them. Discuss the agent’s strengths and achievements, where they need improvement.
5) Set goals and expectations
Discuss immediate and future objectives with the agent. Encourage open dialogue and assure them to come to you with any feedback or concerns.
At the end of the day, you have to care. Make feedback a regular occurrence. It doesn’t have to be scary. Give feedback whether it's positive, negative, or you just want to tell someone to continue going in the same direction.
Be prepared to create action plans and reset expectations for bottom performers or people you just want to improve. Having a low performer doesn't necessarily mean that they're tanking, but maybe there's just one area of improvement they can really work on. It's just a matter of having an action plan.
Do customer service metrics really affect business growth?
Absolutely.
Customer service is the backbone of a business’s success. When you focus on giving outstanding customer service (in addition to product quality, of course), you get customer satisfaction, which turns into new and repeat customers and more revenue.
The customer service metrics outlined in this article are helpful tools to set you on the right path toward building a more successful customer service program. Paying closer attention to the data that matters most can help you identify areas for improvement, which is necessary in order for any business to grow.
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Make your customers happy and your business happier with Gorgias
Now that you know which customer service metrics are the best to track to ensure your ecommerce business’s success, you can start evaluating your customer service program.
Every metric I included above can offer your business better insights into what your current customer service program is doing right, and where there’s room for improvement. You don’t have to track all of these KPIs, but I highly recommend using a platform like Gorgias to keep your customer conversations and metrics in one spot.
If you’re ready to revamp your customer service program and improve your level of service, learn more about what Gorgias can do for ecommerce businesses or sign up today.
