“You cannot improve what you do not measure.”
Key performance indicators, or KPIs, are a set of quantifiable measurements used to gauge overall performance. They are integral to the accurate assessment of how well an employee, department, or business is performing against set standards in order to achieve key objectives. There’s no specific way of constructing KPIs, but they should be quantitative, practical, and directional.
In the customer service industry, KPIs are especially important in tracking progress, which is beneficial in checking if goals are met or if there is a need to review certain practices. These analytics give the best picture of effectiveness and efficiency. Here are some of the best indicators to consider:
1. Customer/Client Satisfaction
Known as CSAT, this is easily the most popular KPI that customer service providers measure. Knowing that 91% of unhappy customers will never buy your products or use your services again, this metric is essential to ensure that reps give their best in every interaction. The customer satisfaction rating is typically obtained by conducting customer surveys.
2. Average Handle Time and Average Wait Time
AHT refers to the average time a customer service representative completes a transaction, while AWT measures the inquiries attended to or calls answered within a specified amount of time. In very large centers, an additional second of AHT can add up to 1 million dollars in additional annualized costs. Research also shows that about 35% of callers will hang up within one minute of waiting. In today’s times of instant gratification, speed is a constant determinant of customer satisfaction. These two related metrics are important in deriving the correct staffing level.
3. First Call Resolution
Especially vital in centers handling inbound calls, the primary benefit in tracking FCR is the ability to identify issues to lower the rates, and then resolve them. According to SQM Group, a 1% increase in FCR is equal to $276,000 USD in operational savings. On average, data also shows that, customer satisfaction drops by 15% each time a customer has to call back about the same issue.
4. Quality Assurance
In quality assessment, a system is set up to ensure that a defined list of criteria or guidelines are consistently complied with and covered. This KPI, usually tracked via call monitoring and QA scorecards, can help identify agent training needs, improve operational performance, and enhance customer interaction.
5. Conversion Rate
This KPI measures the number of contacts that resulted in a positive outcome (i.e., sales made, appointments set, surveys answered, money collected, etc.) Tracking this is crucial as it directly impacts the company’s bottom line. For instance, Amazon boasts a 13% conversion rate, almost seven times the industry average.
Because they are hinged on a company’s own niche, strategies, and definition of success, KPIs are definitely not universal or one size fits all. Different employee levels and different industries call for different targets – so setting KPIs is a fundamental, internal task. It is imperative that organizations take the time to evaluate and establish indicators that are pertinent and are aligned to their own business roadmap. Choosing the right KPIs is just as important as hitting them – they can only be useful if companies use the data gathered to make critical adjustments and to come up with action plans to better their processes and boost growth.
Whatever they may be, whether you employ in-house or outsourced customer service teams, one of the biggest benefits of setting KPIs is ultimately improving customer experience. 80% of customers say that the experience a company provides is just as important as its products or services. In the end, it’s more about people than merely numbers.
FGC+ helps clients set the right KPIs for their teams through customized, personal evaluations with our highly-experienced management team. Schedule a call with us today.