Choosing The Right Metrics For Your Customer Service Operations

Measuring the success of your customer service by using a single metric is impossible. It’s like flying a plane by just looking at your speed without taking the altitude into account. You need to measure a set of competing metrics to make up a Balanced Scorecard that includes the cost of doing business and customer satisfaction. Service operations that have sales responsibilities should also track revenue generated. And in industries with strict policy requirements, like healthcare, insurance, and financial services, compliance with regulations is yet another set of metrics to track.

Choosing the right set of metrics to measure also depends on the stakeholders that use this information. For example:

  • Service managers need operational data that tracks activities, while executives want strategic KPIs that track outcomes of customer service programs.
  • Service managers need granular, real-time data on their operations, while executives need to see only a small number of KPIs on a periodic basis.  

I always think of it as a two-step process to pinpoint the right metrics for all your stakeholders:

  1. Understand the strategic objectives of your company; choose the high-level KPIs for your contact center that support your company’s objectives. These are the metrics you will report to your executives.
  2. Choose the right operational activity metrics for your contact center that map to these KPIs and which the customer service manager uses on a daily basis to manage operations. Here’s an example of this mapping:

KPIs measuring service outcomes

Operational metrics measuring  activities

  • Cost of service
  • Average handle time
  • Average talk time
  • Average hold time
  • Agent productivity
  • Rework
  • Number of escalations to tier two support
  • Agent turnover and training
  • Schedule adherence
  • etc...

So how do you choose the right metrics? We all know that there are lots of predefined metrics that you can use — and we also know that tracking lots of metrics doesn’t mean that you are performing any better than if you only tracked a couple of metrics. My tips include:

  • Align activities to outcomes. If you are measuring and optimizing an activity metric that cannot be mapped directly to a KPI, it is probably of lesser importance to the success of your business.
  • Customize metrics that are right for your business. Predefined activity metrics provided by customer service software tools are vendors’ best guesses at the measures that will be needed. Use these metrics as starting points to help guide the definition of metrics that are valuable for you to track. For example, don’t only track handle time, but also track hold time to understand your customer’s experience when waiting in a queue.  Likewise, don’t rely on predefined KPIs. Use these to calculate the right KPIs for your organization, pulling data from several different applications and systems.
  • Analyze metrics by varying timeframes. Sometimes overall metrics look good, while actual metrics over shorter time intervals don’t. For example, daily handle time metrics may be aligned to operational goals, which can hide large hourly fluctuations that point to staffing challenges.
  • Look at metrics for the different communication channels that you use. See if there are discrepencies, and do a root-cause analysis to understand why differences exist.
  • Use the right set of metrics for your audience. Executives speak the language of KPIs and service managers speak the language of activity metrics. It’s important to create a language bridge between these groups of metrics. For example, the request of a service manager customer to add headcount to a knowledge management program can be framed as “We need to evolve our knowledge management solution to provide a better quality of knowledge to our agents. This will ultimately lead to a measurable, quantitative increase in our Net Promoter Score, an increased first-time fix rate, and lower operating costs.”

Metrics is an art as well as a science, and you may have to go through several iterations to pick the right ones that really measure business success.

 And don’t forget that good customer service is the result of good technology, good customer service processes, and — most importantly — a well-managed organization that values its employees. Pay attention to the human factors, such how you measure your agents, how you compensate them, and how you empower them to make decisions to ensure that they deliver to expectation. After all, your agents are the key to your success.

 

Check out the full report on the Forrester site at: http://www.forrester.com/rb/Research/implement_effective_customer_service_metrics/q/id/59407/t/2

Comments

Hi Kate, really interesting

Hi Kate, really interesting post but I have some observations to tell you. I agree with the need of operational metrics that make you understand " how the machine is working" espacially when you have a budget to control or a workforce management plan. But besides strategic KPI (surely linked to corporate objectives like NPS, CSAT, ROS and others) I think Call Centres miss a perspective that see them as a service experience hotspot where it's extremely important to monitor and evaluate your efforts through different metrics that link the resolution process with the CSR activity. I mean, I'd like to see officially that the best indicator for a service manager is "case handling time" and not AHT which is tipically referred to the call. From the customer perspective (the only one perspective to consider) the WOW experience is achieved when you have fixed his problem and not when you hang up.

Absolutely

AHT will only paint one picture - what about the wait time? And the callback time? for example, you may have a good AHT but have your customers on hold for a long time to the point where they become disatisfied. A critical metric to track is the end-to-end case handle time as you point out.

What about a "Recommend Index"?

Kate,

I agree with the operational metrics and KPIs you outline above, and I think for performance management, these are all good metrics to include in reporting to management and tracking productivity. However, these may be more internally-focused metrics, where we are trying to optimize resources internally to increase profitability. It's the cut costs vs. grow revenue argument on how to improve company performance.

I would propose that there could be a single metric for tracking customer service that is customer focused - the "recommend index". Ultimately, this is the highest form of customer satisfaction - if the customer is willing to recommend your company to somebody else. This index can clearly identify how satisfied, as a whole, your customers are with the company (products/offerings, service, support, etc). For shareholders, it's a quick way to answer the question "how are we doing overall". The question: "Would you recommend to a friend/colleague" is incorporated into a larger customer satisfaction survey, but answers the most critical question.

I have worked on projects like this for a large technology company and the interesting thing we gathered from this is that, though sometimes customer service was below par, the customer would still recommend the company (ie. loyal customer) and though customer service was very good, the customer would not recommend the company (ie. product issues). Not only were we able to identify what our overall "recommend index" was (which for reference was around 92%), it was also a way to cross-reference the index against other customer satisfaction metrics to identify loyal customers and why other customers might not be loyal.

Anyway, great post and definitely good operational metrics to determine customer service performance.

Ryan

recommend index

Does recommend index include cost of doing business? I know Zappos uses this as their sole metric, but then they have a disciplined way of doing service: communicate expectations clearly, and always meet or exceed expectations, while keeping the customer in the loop. However, in most cases, recommend index may not paint the entire picture - I remember a few dot.com companies that did very well with satisfaction, but did not pay close enough attention to cost which resulted in their eventual downfall.

Competing KPIs

Andrea starts down this path, but I thought it might be worthy of a little more detail: the challenge between quantity and quality. She discusses 'case handle time', which I think would be the overall time to get to solution, totalling all calls related to that customer and incident. But what of the additional work the customer had to do in terms of repeated calls? Are the first calls really 'defects'?

We believe in metrics that 'rub' competing metrics against one another. Quantity and quality are two obvious examples. I may create a ton of output - but what is my defect rate? Or I may do perfect work, but very little of it. Depending on your business, you need to establish the relationship between the two. The airline industry is a good example - they can not afford any defects on take off or landing. But they can afford to run out of Bud Light when serving drinks.

Most businesses have a grey area where a certain number of defects are acceptable, but significant performance is critical too. So the end metric could be a 'performance metric', that applies weighting to several individual KPIs to generate an overall measure.

This is a simple example, and most businesses should consider aggregating measures into some overall value for quick assessment (like a grade point average in school), then allow drill down to detail (passing science, failing english), etc.

sorry paul but Andrea is a

sorry paul but Andrea is a male name in Italy :)

My apologies Sir!

I apologize for the gender mix up!