Key Performance Indicators (KPIs) are one of the most powerful tools an organization can harness in its business intelligence efforts. As the name suggests, key performance indicators, or KPIs, are metrics that are used to monitor business activities that are critical to the success of the company. They help to quickly cut through the massive data.
Particularly, the big data information that constitutes day-to-day business operations to retrieve key insights. This last point is especially crucial, as it allows businesses to make adjustments in real time. For this reason, in particular, many companies are always looking into the best KPI software tools as a means of maintaining a consistent business pulse.
For this reason, in this article, we’ll take a look at what Key Performance Indicators (KPIs) are and the best software tools any business can utilize to maintain a consistent growth curve. We’ll also learn how your KPIs should directly tie into your organizational goals and mission. As well as how to get started building your KPI Dashboard with these metrics.
What Are Key Performance Indicators (KPIs)?
Key Performance Indicators (KPIs) are a special set of metrics that help determine whether a business is going in the right or wrong direction. At first glance, it seems that customer service KPI scores take a backseat to traditional business KPIs, like profits, costs, and regional scales. The key customer support metrics may paint a more complete picture.
More so, a success picture for the long-term viability of a business. Jeff Bezos has gone on the record to say that customer obsession is “the first and by far the most important” key to building a successful business.
But, Amazon isn’t alone in this belief: Netflix is one of many other Fortune 500 businesses that believe happy customers are the foundational element of a successful business. Perse, we are going to dive into a mix of various elements.
We’ll highlight everything including:
- Why customer service KPI metrics are important
- What are the most important customer service KPI metrics for teams?
- What is a customer service KPI dashboard?
- Why are top customer service KPIs hard to achieve?
- How do you improve customer service KPIs?
As you’ll learn, later on, KPI monitoring tools and dashboard software are essential if you want to reap the full benefits of your BI solution. By tracking the right KPIs, the solution does the hard work for you; it enables you to spend less time.
Resource Reference: KPIs And Metrics Every SME Should Understand
In particular, it takes less time doing tedious reporting and more time taking action. By using KPI measurement tools, it becomes much easier to implement a decision-making strategy that’s based on accurate, concrete data. So, why are Customer Service KPI Metrics important?
Customer service teams have their work cut out for them: the need to optimize margins and cut costs, all while providing a higher level of care that meets the modern customers’ expectations for immediate, personal and effortless support.
It’s now widely understood that for support teams, the stakes have never been higher. People are increasingly making their buying decisions based on the support they receive. Customers will stop doing business with a company after one poor customer support experience. It shows the impact support can have on a company’s bottom and top lines.
Resource Reference: A Definitive List Of Key Performance Indicators For Business Success
Therefore, it’s critical that support leaders are tracking the performance of their support agents and understand areas for improvement and what’s working. As well as celebrate exceptional performances. To do that, there are specific customer service key performance indicators that need to be monitored on an ongoing basis.
More so, in order to adjust processes or optimize agent training. When you’re tracking the right KPIs, you get an undoctored, objective view of your team’s performance. And, it has an impact on a company’s goal. It’s more important than ever for customer service teams to know your performance against your customers’ expectations.
The KPIs summary benefits:
- Remarkably, KPIs engage business employees
- KPIs make everyone accountable for performance
- They connect your purpose and your culture in the same direction
- KPIs unify employees to work towards a common objective
- Performance KPIs will help employees measure their impact
- They make everyone a happy contributor to business success
That said, there is Core Customer Service KPIs that every customer support team needs to be tracking closely. Some are based on very tangible metrics like resolution time. While others look at your customers’ feelings towards your company and how they perceived an interaction. Below are some of the most important Customer Service KPI Metrics to consider:
Customer Satisfaction Score (CSAT)
CSAT score is the most popular and straightforward way to measure customer satisfaction. It’s a metric that measures sentiment towards your product, service, or a specific interaction. To measure CSAT, you’ll ask a simple question, such as: On a scale of 1-5, how satisfied are you with your recent purchase/support interaction/service?
You’ll want to carefully review the interactions of people who responded with low scores to analyze what went wrong to update procedures and responses or conduct additional agent training. That said, you can read how WestJet’s CSAT increased by 24% with AI in detail.
Customer Effort Score (CES)
Minimizing disruption in a person’s life and requiring minimal effort on their part are the cornerstones of good customer service. CES measures how much effort your customer had to put into resolving a particular issue or answering a specific question.
CES depends on a myriad of factors including time spent, total back-and-forth interactions, and the number of times a person has to reach out. To determine CES, you’ll ask your customers, On a scale from “Very Easy” to “Very Difficult”, how was your experience? If you find that you have a low CES score, identify how to remove obstacles and friction.
Employee Satisfaction Score (ESAT)
Customer service has one of the highest attrition rates of any industry. Measuring employee satisfaction with their job, processes and team can alert you to any issues or attrition risks, and as a result retain your agents (and keep recruiting, training, and onboarding costs at bay). Take frequent employee surveys, have 1-on-1 check-ins, and encourage open communication to understand your employee satisfaction.
Total Tickets And Per Customer
The most straightforward KPI for customer service teams is tallying the total number of customers submitting support tickets. In addition to tracking the top-line figure, you’ll want to analyze to identify how volume fluctuates based on times of day, day of the week, or based on seasons.
You can’t just take the number at face value, though. You need to understand if you are getting more service requests because your product/service is broken or because you are getting more customers. Tracking tickets per customer can help inform resource allocation through the lens of long-term vs. short-term needs.
Volume By Channel
Track where your customers are reaching out from in order to optimize staffing and prioritize channels that would benefit most from technologies like automation.
For example, companies generally have been de-prioritizing customer support email as a support channel in favor of social messaging and live chat. In a recent study, we found that customers prefer email support over all other digital channels. By tracking ticket volume per channel, you prioritize and shift resources to where your customers are.
First Response Time (FRT)
Also referred to as First Reply Time, FRT measures how long it takes a company to provide an initial response to a ticket. Valuing a person’s time is the most important thing a company can do with regard to customer service according to 73% of consumers, so decreasing the time it takes to at least acknowledge a person’s request is critical to a person’s overall satisfaction.
Across the board, first response time needs to be a key area of focus. Research has found that the average first response time is 12h 10m, but 75% of customers expect it within 5 minutes. It’s important to note that confirmation emails with generic auto-responders skew first response time metrics.
If your company uses autoresponders, you may need to define a new KPI that measures “first impactful response time.” Not to mention, 75% of customers expect a response in 5 minutes. The average is 12h 10 min.
Average Handle Time (AHT)
Getting back to your customers quickly is one thing, but how long it takes for you to actually resolve an issue is even more important. To calculate AHT, add up the tidal time it takes to close a ticket, from the time your customer initially reached out, hold/wait time, back-and-forth interaction and subsequent tasks, and post-interaction system updates.
You can minimize AHT by decreasing the time your customers are waiting and optimizing each back-and-forth interaction. Using hybrid support models, like human+AI vs. purely human agents can significantly help reduce wasted seconds.
First Contact Resolution
You don’t want your customers to have to reach out to you multiple times to resolve a single issue. That’s the recipe for the frustration that directly impacts retention. That’s why measuring first contact resolution, or whether or not you resolve an issue in a single chat session, phone call, or email response, is a good indicator of how your team is performing. If your customer needs to reach back out or be escalated to another source for support, it does not count as the first contact resolution.
To measure First Contact Resolution, ask your agents to check a box or confirm within the agent desk if an issue was resolved at the end of an interaction (you’ll want to audit this on a regular basis), or follow up with your customer and ask if their issue was resolved.
This is a better resolution time measurement than average resolution time (ART). While first contact resolution results in a solution being provided in the initial outreach, average resolution time measures the amount of time it takes to completely close a case. If you are in a service industry where issues escalate or move to other departments, measuring ART takes the true view of your performance out of your hands.
Cost Per Resolution
Let this sink in: 265 billion customer support requests are made every year, costing $1.3 trillion. Understanding how much it costs to solve a single ticket is critical not only to operating costs and staffing but also serves as a great way to measure the effectiveness and ROI of adopting tools like AI.
To calculate cost per resolution, take your total monthly operating expense (salaries, technology, training, licenses, overhead, office supplies, etc.) and divide it by the total number of tickets. If you have a high cost per ticket or notice that it is increasing, you’ll need to look for ways to bring efficiency to your group. This could come in the form of new training and employee performance review, a need to review systems used like agent desk platforms, or the need to adopt new technologies.
Topmost Topics
In addition to tracking the number of tickets, analyzing the topics and reasons why people are reaching provides opportunities to carefully review processes, responses and policies to ensure a positive customer experience. You’ll also be able to identify opportunities to proactively communicate throughout the customer journey.
And even create ways to surprise customers and catch them before a problem becomes a pain point. For instance, if there is a high volume of troubleshooting questions for a particular product after three months, your company could proactively provide steps on how to keep a product working as expected.
Consistent Resolutions
Think about whenever you’ve visited In-N-Out. You know you’re going to get great service and your meal is going to taste the same as every time before. Like with their burgers, people also expect consistency when they reach out to a company – no matter the channel, the agent on the other end, or the time of day.
In fact, In our own consumer research, we found that consistency in a company’s service and experience is one of the most important factors in creating satisfied customers. Striving to provide consistent resolutions is something that is becoming increasingly critical–especially as people are more than eager to loudly share their negative experiences.
To measure consistency, use AI to analyze how agents respond to different people reaching out with the same query and flag discrepancies.
Net Promoter Score As A KPI
Net Promoter Score (NPS) measures loyalty and the probability that someone will recommend your company to other people. NPS looks at overall, long-term brand perception, and is measured by asking a simple question: On a scale of 1-10, how likely are you to recommend [company] to a friend/colleague?
NPS can be an indicator of growth potential for a company because peer recommendations carry so much weight in our society that is social media-obsessed.
Customer Retention
You should track the retention rate of your customers who reached out with an issue. Did they come back and buy from you again? Did you manage their issue well enough for it to not rupture your relationship with the customer? This will require integrating into your CRM platform, and making sure all systems (agent desk, eCommerce, etc.) are feeding data in and out of your CRM for a 360-degree customer view.
This is also a key performance indicator for determining overall customer loyalty to your brand, so the implications of good customer retention go beyond repeat purchases.
Employee Turnover Rate (ETR)
Employee Turnover Rate is the percentage of employees who leave a company within a certain amount of time. If you run a large support team, make sure you have a close pulse on your ETR so you can address issues head-on. The cost of replacing employees (recruiting, training and onboarding) is huge and any time you have a new agent, there is potential for inconsistency and other metrics to slide.
Top Performing Agents
You’ll want to track and recognize your agents who have the lowest average handle time, and highest first contact resolution, solve a large volume of tickets, deliver high CSAT, and more.
Ensure your agent desk platform allows you to drill down to specific agent performance, including both human and AI-powered virtual agents.
The Main Key Performance Indicators (KPIs) Challenges
First of all, it’s good to note that the role of Key Performance Indicators (KPIs) Dashboards (Customer Service KPI Dashboard) is for managers to access data in real-time–whether it’s CSAT, resolution time, or effort score. Data is presented in graphs or charts. And then it’s continuously updated, enabling leaders to understand exactly how their team is performing.
Within a dashboard, you can examine how your team is performing over time. For example, let’s say you make new hires, change policies or procedures, or adopt technology like AI. Well, you can easily see how performance is affected. You can create your own dashboard or even access out-of-the-box data platforms.
More so, from agent desk software like Salesforce, Zendesk, Gladly, or Freshdesk, among other customer experience management platforms. For some reason, the Key Performance Indicators (KPIs) are hard to achieve. Fortunately, there are even more channels to support, higher volume, and stretched–and stressed–agents. The topmost challenges are:
High Expectations
Meeting modern customer expectations is getting harder to do; people expect quick, convenient high-quality resolutions on their terms. People expect more, and although many companies have been trying to improve their support, whether it’s a live chat or online wikis and self-help options, more than 50% of U.S. consumers have not seen any improvement in customer service over the last 12 months. Twenty-three percent have reported that customer service has grown slightly or significantly worse.
Conversation Juggling
With the pressure to resolve tickets quicker, agents on digital channels like live chat and social messaging are often carrying on multiple conversations at the same time. This opens the door for distraction and mistakes.
Information Silos
To fully resolve tickets with personalization and context, agents often have to access information from various back-end systems of record–whether it’s CRM, order management systems, booking systems, knowledge base platforms, or logistics systems. This creates more work for agents which results in wait time and longer resolution times.
Angry Customers
An article in the Los Angeles Times has referred to customer service agents as the “punching bag” on the front lines. The article focuses on the airline industry, but I would argue that agents across all industries deal with difficult customers daily. According to the publication, “Agents are subjected to verbal abuse almost daily. It’s a thankless job requiring patience and thick skin.” Agents often bear the brunt when something goes wrong – whether it’s a missing ingredient in a meal kit, a lost bag, or a lost package.
Unavoidable Crises
When the COVID-19 Pandemic crept across the world, customer service teams were dealing with a surge in volume, evolving policies, and new remote work environments. Many companies stopped measuring customer satisfaction during this time as they were simply trying to get back to customers, which often took days. When a crisis hits, it’s hard to maintain the same level of service previously provided, especially when using a human-only team that is affected by new work environments, external pressure, and stress, and can’t scale output as volume surges.
Ineffective Measurements
While this might sound very basic, you need to have the right systems in place to actually measure the business-critical KPIs before you can look to improve them. If you use multiple engagement platforms, make sure all of the data is analyzed together to provide a true picture of how your support engine is performing.
The Best Key Performance Indicators (KPIs) Software
With so many options in the BI tools market, how can you determine which KPI software is the best? Well, our team of analysts did the research and I’m here to share that information with you.
But, before we can analyze any of these KPI monitoring tools, we have to first understand what KPI software is, what it does and why it’s important. Let’s dig deeper and see if we can crack the code of the mysterious KPI. In general, KPI software refers to tools that automatically track Key Performance Indicators in real time and present them to users.
Eventually, in easy-to-understand data visualizations that enable them to spot trends at a glance. These solutions help business users and decision-makers set measurable goals. Goals that align with their core objectives as an organization. And keep track of their current progress in meeting those goals.
KPI monitoring tools and dashboard software are essential if you want to reap the full benefits of your BI solution. By tracking the right KPIs, the solution does the hard work for you. Whereby, it enables you to spend less time doing tedious reporting and more time taking action.
Their key benefits include:
- Crucial Information At-a-Glance
- Better Decision Making
- Proactive Problem Solving
- Improved Company Culture
On that note, the easiest way to report on your KPIs is with a KPI dashboard. A KPI dashboard provides you with an at-a-glance view of your business performance in near real-time. Also known as a KPI report, visualizes how your current performance stacks up against your objectives. Traditionally, a KPI report is done on a quarterly basis.
Some requirements to consider are:
- Seamless Data Integration
- Customizable Dashboards
- Web and Mobile Accessibility
- Unlimited Software Alerts
By using KPI measurement tools, it becomes much easier to implement a decision-making strategy that’s based on accurate, concrete data.
How Does The Software Tools Work?
Users enter their data into the system, or connect the platform to their existing technologies – then the magic happens. KPI tools collect all that data in real-time, turn it into beautiful dashboards and simplify reporting into forms that enable users to get a quick overview of their insights at a glance. Instant alerts when KPIs dip below and spike above certain thresholds help maintain a steady course of operations.
While KPIs are often used for tracking finances, that’s not the only way to implement them. KPIs can do anything from monitor product quality to track supply chains to measure customer satisfaction, all while providing data for analytics. There’s no one-size-fits-all approach to tracking KPIs; even though there are guidelines for certain industries.
Thus, at the end of the day, each company has to decide for itself what KPIs it needs to measure. Even companies operating in the same marketplace might have completely different objectives, and thusly, track different sets of Key Performance Indicators (KPIs). Below are the best features to look for when considering the type of KPIs.
Executive KPIs
- Net Profit Margin
- Debt to Equity Ratio
- Lifetime Value to Cost of Acquisition Ratio
- CAC Payback Period
Marketing KPIs
- Customer Acquisition Cost
- Lead Conversion Rate
- Marketing Qualified Leads
- Return on Marketing Investment
Sales KPIs
Finance KPIs
Depending on your industry, some KPI software might be a better fit than others. Hence, that is why it’s important to thoroughly research and compare BI solutions before committing to one. So, where do you start?
Consider:
- Tableau
- Sisense
- Microsoft Power BI
- Grow
- Klipfolio
- Qualtrics XM
- CMSWire
- Retently
- SurveySensum
- Netigate
KPI software doesn’t have to be intimidating. In fact, in a lightweight BI tool like PowerMetrics, it’s actually pretty simple. Especially, with PowerMetrics or other similar tools, you can create real-time visualizations of your KPIs.
Whichever KPI software matches your needs best will depend on your company and what problems you’re looking to solve with your BI solution. Perhaps you’re interested in solutions that make KPI reporting a priority. Or, perhaps, it’s less important to your company. Maybe you need a solution with industry-targeted KPI tracking.
Regardless, the best way to start your software search is to figure out what features you’ll need while using a requirements template first. And then, begin looking at different products to compare your needs with the features each offer. All these and other best KPI software tools can help you nip a problem in the bud.
The Key KPIs Best Practices You Should Know
Seventy-seven percent of executives have already implemented conversational bots for after-sales and customer service. With more companies turning to AI, it’s important to understand the relevant KPIs for virtual agents. Whether you’re tracking the performance of human or AI-powered virtual agents, you need to look at the same key metrics.
Yes, that’s right! You’ll need to measure AI like you measure your human employees. Whilst, tracking the impact human and virtual agents are having on CSAT, retention rates, etc. As well as how effectively they collaborate with teammates. Or rather, how successful they are at cross-selling, and the underlying metrics related to efficiency in closing tickets.
This is a new way of measuring the impact of an automated customer service technology platform. Virtual agents are performing human work and need to be measured in the same way. Perse, adopting AI can help.
You’ll improve your KPIs in two core ways:
- Automate resolutions to repeatable issues: AI can respond instantaneously to high-volume, simple queries like order status and return requests.
- Augment human agent work: AI can help agents work faster by gathering data from a customer prior to handoff. Or even pulling information from other business systems like your CMS and eCommerce platforms. The AI can pass data along to agents who can quickly review, make a decision, and communicate with customers.
So, if that’s the case, how can companies actually deliver against customer expectations and turn support into a business driver? Notably, there are 3 specific ways that companies can improve their customer service KPIs:
Hire More Human Agents
To decrease resolution time and first response rate, companies can simply hire more agents. However, hiring an army of new agents to work around-the-clock and man all of the traditional and emerging support channels is cost-prohibitive for most companies. The average salary for customer service agents is $35,437 in the U.S. [source]. You must also consider costs for human agent desk platforms, overhead costs, paid time off, sick days, and more.
Outsource Customer Service
As a way to grow a support team, scale to new markets, provide 24/7 support, and reduce costs, many companies hire a business process outsourcer (BPO) to farm out customer service. Over the last few years, AI-powered customer service automation has become a viable alternative to BPOs, helping companies achieve these same end goals with less risk and higher ROI.
Many companies hire outside teams to manage customer service, but while outsourcing your customer support operations is a popular choice to save on costs, you’ll need to keep a close eye on consistency, agent training, and CSAT. Companies like Bank of America, Ford Motor Company, and the Wall Street Journal use overseas workers.
More so, to cover all or part of their customer service. This is because in the 1990s when outsourcing began to gain prominence, the cost of labor and overhead costs was much more favorable. And again, it provided a way to offer more around-the-clock coverage. Looking to grow your support team and reduce costs? Learn why AI trumps outsourcing customer service in detail.
Bring In AI (Virtual Agents)
Companies are starting to bring AI into their workforce to automate and augment support. The companies that leverage AI-powered virtual assistants are seeing upticks in customer satisfaction and other Key Performance Indicators (KPIs).
With that in mind, you can go ahead and give your customers instant answers to up to 85% of customer service issues with the Zoho Chatbot. What if you’ll need more help improving your overall customer service KPI? Well, you can discover how other companies improve their most business-critical customer support KPIs in detail.
But, if you’ll need more help, you can always Consult Us and let us know how we can come in. Furthermore, our Web Tech Experts will be more than glad to offer you all the support you’ll ever need. All in all, you’re free to share your additional opinions, thoughts, suggestions, contributions, recommendations, or even questions in our comments section.
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