8 Customer Service Metrics Every Business Needs to Track in 2024

A reputation is built over time but can be ruined in an instant.

Even if you spend years developing an excellent reputation for your brand, you can lose it overnight with a lousy customer service strategy. If you want to win, the ultimate goal of your business should always be to keep your customers happy. Customer service is one of the most important elements of the business process that can make or break your reputation and success in business. 

Studies show that nine out of ten customers are likely to make repeated purchases if they are satisfied with the company's customer support; that's a lot of customers! Customer service metrics are your guiding light to achieve maximum success. However, how do you build great customer service?

What are metrics in customer service?

Customer service metrics are measurable indicators that reflect your support process and the state of your customer’s happiness level. Using the right customer support metrics will help you measure your performance and reach the best outcomes in terms of quality and engagement. But why is it so crucial for every business to track these metrics? By choosing the right customer support services, you can answer the following questions:

• Is your support team responsive and fast enough?
• How do your customers feel about your products and services?
• Can your customers easily use your website and services?
• Is your communication effective enough to gain trust and loyalty?
• How effective are your marketing campaigns and sales processes?

These are some of the questions you can answer if you follow the right customer service metrics. Now, let’s talk about the most important customer service indicators that we suggest putting into practice.

1. First Response Time 

The first impression is the most lasting one, and it plays a role in customer service too. First Response Time is measured between the very first moment your customer sends their message and the time your support team answers. Customers do not like to wait around for answers, and if your customer service response time is too slow, you will likely lose customers to a faster service that values their time.

A business that cares about its customers and values their time makes it a priority to respond to them within the shortest time frame possible. Never underestimate the power of a quick response, especially for the first time. As a matter of fact, responding quickly to your customers will not only prevent you from losing them but will also improve your chances of creating word-of-mouth by 33%.

In general, you should expect the following response times for different platforms:

• Phones: 2-4 minutes
• Live Chats: 1.5-2 minutes
• Emails and online forms: 24 hours
• Social Media: 1 hour

How to Measure First Response Time?

You can estimate the average first response time simply by adding up all of your FRTs in a specific period of time and dividing by the total number of first responses for the same time.

• First Response Time = Total first response time for a certain time / Total number of first responses for the same period
• 67.5 = 54,000 seconds in one month / 800 first responses in one month

How to improve your customer service first response time?

• Training your support team and briefing them well on the importance of FRT
• Prepare canned responses for the frequent questions
• Have a follow-up system for your customers
• Create a multichannel response strategy 

2. Average Resolution Time  

Customer service performance metrics, such as average resolution time, measure the time it takes from the customer's first message until it is resolved. So, after responding quickly to your customers, it's time to find out how fast you can solve their problems. But simply resolving the ticket does not necessarily mean that the problem is solved.

Sometimes fixing bugs and tech issues can take time and is out of the hands of the support team. Therefore, it's essential to coordinate with the technical team and keep following up with the customer to ensure their problem will be solved soon. Your customers deserve effective follow-up on their issues, which you can provide by improving your average resolution time. Here are some tips on how to improve average resolution time:

• Offer proactive support for the most problematic parts of your product
• Resolve the lack of coordination between your service and technical teams
• Provide live chat scripts and FAQs to speed up the time to resolution 

How to Measure Average Resolution Time?

You can calculate the ART customer service metric by dividing the total time for all tickets to be resolved by the number of tickets resolved.

• Average Resolution Time = (Total resolution time for all solved tickets) / Number of Tickets resolved. 

3- Preferred Communication Channel

With the rise of digital communication channels like social media, your customers can reach you in various ways; therefore, you need to ensure their experience and satisfaction across all channels. Remember:

Nobody likes jumping from one digital platform to another to find answers and solve their problems, particularly if it's related to their purchases!

Provide customer service where requested, respect your customer's preferred communication channel, and try to solve their problems without redirecting them elsewhere.

If someone inquires about your services on your Instagram page, do not ask for their email or phone number, be instant, answer them right then and there. Here are some tips to improve your customer service in this regard.

• Identify which of the online platforms your customers prefer
• Optimize the preferred channels for better interaction
• Assign enough team members and support agents accordingly
• Make sure that requests are answered on time

Keeping track of the preferred communication channel is essential because it can directly impact the quality of your customer service and your brand's perception. 

The following is a list of recent most preferred communication channels:

• Social Media
• Telephone
• Customer reviews/ forums
• Email 

4- Ticket backlog

Backlog refers to the number of unresolved and open tickets in a particular period. There can be several reasons why tickets remain open for longer than the standard response time in your team, such as agent performance, ticket volume, or dependencies.

It can be a high volume of messages that your team cannot handle or a technical issue that takes a bit more time to be solved than normal. In these cases, you should focus on buying yourself more time by responding quickly and reassuring your customers that they will be well taken care of. Here are a few tips to reduce your unresolved tickets:

• Use a ticket management system to organize and prioritize your tickets
• Manage to resolve simple and frequent problems automatically 
• Perform follow-ups via different channels 
• Provide self-service resolutions by answering FAQs

How to calculate Ticket Backlog?

To calculate your ticket backlog first, you need to know what is your normal time frame to resolve a query (Average Resolution Time). In a typical case, it could take you 5 minutes, an hour, or a day to answer a ticket, so calculate how many tickets are open beyond that timeframe to track your backlog.

Ticket backlog = Total unresolved tickets longer than x time. 

5- Customer Satisfaction Rate (CSAT)

People may forget what you said, but they will never forget how you made them feel. Therefore, customer satisfaction rate or CSAT is one of the key performance indicators (KPIs) that can lead you to your ultimate goal, customer loyalty. 

By measuring this metric, you can evaluate how happy and pleased your customers are with your product or service. Your goal is to ensure your customers are satisfied with your services enough to purchase from you again and hopefully recommend you to others.

You can directly ask your customers to write about their satisfaction or dissatisfaction with your services or send them a short survey to collect their feedback and gauge their feelings on different aspects. 

How to Measure Customer Satisfaction Metric?

Whether you want to express customer satisfaction in words, emojis, stars, or numbers, here is a formula you can use to find out what percentage you have:

• Divide the number of customers who replied as satisfied by the number of customers who replied and multiply it by 100.
• % Customer satisfaction rate = Number of satisfied customers / Total number of responses x 100

6- Customer Retention Rate

You don't earn loyalty in a day; you earn it day by day, and your customer retention rate can tell you how successful you were in this regard. Customer retention refers to all measures you take to retain your existing customers. It is estimated by Harvard Business Review that acquiring new customers is 5 to 25 times more expensive than converting existing customers. Moreover, current customers tend to purchase more and ultimately recommend you to their relatives and friends,

Tracking your customer retention rate allows you to determine what keeps your customers loyal to your business and improve your customer service accordingly. To find your customer retention rate, follow these steps:

1. Calculate how many customers you have at the end of a specific period.
2. Subtract the number of converted customers
3. Divide it by the total number of customers at the beginning of that time
4. Multiply the result by 100 at the end

• For example, if you had 1000 customers at the first of the month and ended the month with having 1200 while converting 300 of them, Harvard Business Review estimates your CRR is 90%.
• Customer Retention Rate = (Customers at the end of the period - converted customers) / (Total of customers in the beginning) x 100

7- Customer Churn Rate

Customer churn rate is the percentage of customers you lose over time. It's the opposite of the customer retention rate. For SaaS or mobile apps, the churn rate is measured by customers who cancel their subscriptions or stop using them, while for eCommerce businesses, it is measured by customers who fail to make a purchase in a given period of time.

It's frustrating and hard to predict, and there could be so many reasons why customers decide not to purchase. However, you can make the most out of this customer service metric by determining the reasons why your customers are leaving you and fixing them one by one.

How to calculate customer churn rate?

The customer churn rate is often measured on a monthly, quarterly, or annually basis. Divide the number of customers you lost in a period by the total number of customers at the beginning.

• For example, if you had 2000 existing customers at the beginning of a month and then lost 400 of them by the end of this time, your customer churn rate is 2%.
• 2% customer churn rate = (400 customers lost at the end of the period) / (2000 existing customers at the beginning of the period)

8- Net Promoter Score (NPS)

“On a scale from 0 to 10, how likely are you to recommend this product/service to a friend or colleague?” 

Net Promoter Score is a measure of your customer’s overall loyalty and their likelihood of referring you to family and friends. And it´s something which you can track by asking simple questions like the one above. 

NPS indicates how successful you were at delighting your customers in order to generate strong word-of-mouth and boost your revenue and customer base. 

This customer support metric can be made even more actionable by adding a quick question about the response intent of your customers. This can help you find out your core competencies and develop the parts that need to be improved.

How to calculate Net Promoter Score?

You can calculate your NPS by deducting the number of customers who answered your question with a six or lower score (The Detractors) from the number of customers who answered with a 9 or 10 (The Promoters).

• NPS = (% Promoters) - (%Detractors)

Net Promoter System customers are divided into three. groups based on their response to the standard question, "How likely are you to recommend us?"

1. Promoters (score of 9 and 10): These are your most loyal and passionate customers who will likely act as brand ambassadors and help you grow your business.

1. Detractors (score of 0 to 6): These are customers you were unable to convert, and they likely won't stick around or repeat their purchase.
   
2. Passives (score of 7 and 8): They aren't actively promoting your brand, but they are satisfied enough to stick around and possibly become a promoter in the future.

To Sum Up

You can’t improve what you don’t measure. So the first step to improving your customer experience is to understand where you currently stand. By following the right customer metrics and KPIs, you can see how your current services and customer experience are and plan your strategy according to your standards.

Keeping track of these customer support metrics will allow you to calculate every move made by your support team, identify your strengths and weaknesses, and ultimately improve performances and standards.

Thank you for reading this article, and I hope it did a good job informing you on onboarding questionnaires and what they should include and look like. See you next time!