This week we feature an article by Julien Rio who writes about the most common KPIs and how to understand them, select the right ones and how to improve them. – Shep Hyken
Depending on whether your Customer Care department is an extension of your marketing or your customer service strategy, the KPIs you give yourself may be different. In this article, we will review the most common KPIs, how to understand them, how to select the right ones and how to improve them.
Type: Customer Centric
Customer Satisfaction (CSAT) is the most common KPI companies track when it comes to Customer Care. Using a simple survey sent to customers/visitors after each conversation, you are able to analyze the level of satisfaction.
Unfortunately, a few elements make this approach quite unreliable. First of all, depending on the length of your survey (using a smiley or star system or a more complete question/answer survey), you would get different results. The trigger for sending such questionnaire also matters: is it sent to every person you had a conversation with or to a specific sample? You may also keep in mind that dissatisfied customers tend to share their feedback more easily than satisfied ones.
Overall, CSAT is something you must track consistently (using always the same method) to have results that can be compared and evaluated over time. The possible variations in companies approaches make it impossible to compare with your competitors but also make it an essential KPI to monitor internally to analyze your evolution.
Type: Customer Centric
Originally used by marketers, the Net Promoter Score is another very common KPI used by Customer Care departments. Knowing that referral usually is the best yet most uncontrollable vector of sales, the NPS calculates the probability that a customer would recommend your brand. The calculation is fairly simple: after asking people whether they would recommend you with a 10 points scale, you divide answers into three categories: 0-6 (detractors), 7-8 (passives) and 9-10 (promoters). You then take the percentage of promoters and deduct the percentage of detractors: that is your NPS.
As is, the NPS doesn’t tell you anything. It is hardly comparable with your competitors as the method varies (who do you ask too? At what stage of their journey?) and, while your CSAT is mostly focused on the experience with an agent, the NPS covers the entire customer experience, beyond the borders of your Customer Care department.
Nonetheless, similarly to CSAT, the NPS is a great indicator of your progress over time and an important one to track.
First Response Time
Type: Performance Centric
Speed is always a major component of customer satisfaction. No one likes to wait. Being able to respond quickly is always a good start to a positive conversation. But beyond customer satisfaction, your FRT is an important KPI of productivity and performance.
A high FRT is usually the reflection of a long backlog or a poor message allocation: messages are coming faster than you can treat them, they accumulate, and the delay in responses increases over time.
Monitoring your First Response Time and keeping it low and steady is the first brick of an efficient customer care. When this indicator increases, your first reaction must be to find the bottleneck: is there an unexpected peak of traffic? Is my team overwhelmed or understaffed? Are messages allocated to the right agents?
The best way to smoothe your customer relationships is to set expectations: let people know when they can expect to hear from you, and always over-deliver.
Average Handling Time
Type: Performance Centric
The AHT is an essential KPI since it gives you a great indication of the cost attached to each customer interaction. A lower Average Handling Time means more satisfied customers, more productive agents and a lower cost per interactions.
There are various levers you can pull to control this KPI: allocating messages efficiently to the right agent to avoid unnecessary transfers, providing your team with templates to reduce their workload, offering them regular training on customer care, products and offers, giving them authority to solve issues without having to refer to multiple supervisors, etc.
Reducing or controlling your AHT is vital since it will directly impact your customer satisfaction but also the size of your backlog and the cost of each interaction.
Type: Management Centric
“It is cheaper to retain a customer than acquire a new one” – what is true for customers is even more relevant for employees. Beyond the cost of recruitment alone, there are other aspects making employee retention an essential KPI: adaptation time (period during which the new agent isn’t productive yet), cost of training, difficulties to manage always-changing teams, etc.
Customer Care departments in general and Call Centers, in particular, are famous for having high employees’ turnover. The job is hard, the pay is low, there is often a lack of recognition and some tasks can be extremely repetitive.
Monitoring your Employee Retention is a great way to improve other KPIs by investing in your team. There are a few levers you can play with to improve this KPI: giving more autonomy and authority to individual employees, removing them from redundant tasks and giving them more interesting problems to solve, providing them with tools that make their lives easier and their jobs more interesting, “gamifying” their daily tasks, etc.
First Contact Resolution is my favorite KPI as this one impacts every other. Your FCR represents your ability to solve your customer’s problem in a single conversation, without dragging the issue over time.
When your FCR decreases, every other KPI improves: customers are more satisfied since they do not need to contact you multiple times, volume of incoming messages, workload and backlog decrease since customers contact you only once, First Response Time decreases in consequence of the reduction of workload and Employee Retention increases because of less redundant tasks and more satisfying conversations with customers. Ultimately, increasing your FCR improves all aspects of Customer Care and help you reduce costs.
To impact your FCR, you may need to train your team towards the single objective of “solving customers issues.” The goal is no longer to open & close as many “tickets” as possible, but truly to solve your customer’s problems and satisfy them within the first interaction. The extra handling time involved is quickly absorbed by the reduction of the number of incoming messages.
An increase of 1% of your FCR shall increase customer satisfaction by 1%, your cross-selling acceptation rate by 20%, your employee satisfaction by 1 to 5% and reduce your operating cost by 1%.
Once you have defined the right KPIs for your Customer Care strategy, set up a consistent method for analyzing them and monitor your progression over time. The next step is to identify the various levers you can act on to improve these indicators and fine tune your strategy.
Entrepreneur specialized in web marketing, Julien Rio has been developing online platforms and strategies for numerous companies across Europe and Asia for the since 2007. Passionate about Digital Customer Care, Julien leads the marketing effort at Dimelo and helps companies all around the world get closer to their customers.
For more articles from Shep Hyken and his guest contributors go to customerserviceblog.com.
Read Shep’s latest Forbes Article: IBM CEO Shares How Companies Large And Small Can Put Smart To Work