Customer service measurement proves your
Leading the Success & Support team here at Gorgias during the height of the pandemic, I’ve seen expectations around customer support soar.
During the past two years, we saw unprecedented competition in ecommerce, pushing acquisition costs higher. With that, merchants shifted focus to retaining customers, and providing an exceptional customer experience became a central strategy for most businesses. Today, delivering an exceptional experience is just as important as the product — since COVID, 50% of U.S. customers now prioritize customer service when deciding whether to purchase from a brand.
So, how does your customer support stack up? The first step is self-assessment — you need to evaluate your customer support program in order to ensure that your support is in line with customer expectations.
To do this, it’s essential to track metrics and key performance indicators (KPIs) around customer service. Below, I’ve outlined the most important numbers to watch within your customer support or customer success department, so you can better evaluate the experience that you provide to customers.
Table of contents
- What is customer service evaluation?
- Evaluating customer service is important for the same reasons it’s challenging
- Key indicators that your customer service program isn’t up to par
- 12 powerful customer service KPIs to help with your evaluation
- Do customer service metrics really affect business growth?
What is customer support evaluation?
Customer support evaluation is the process of figuring out is whether your customers are better off for interacting with your support team. And if they are, is that
Evaluating customer service is important for the same reasons it’s challenging
With Gorgias’ customer support, and especially with the ecommerce support teams I’ve worked with, I see what a difference it can make to have a data-driven and classic ROI business case approach for support.
You can think of a strong customer experience as a rising tide that lifts all ships — because the
Many support teams, even the teams driving these results, don’t necessarily have the tools and systems to track these metrics and prove
Instead, it’s important to focus on the revenue that your team is driving with great support, from when a customer writes in looking for their order, to a casual nudge at the checkout. Ultimately, your customer service efforts are impacting the top and bottom line by driving organic acquisition, conversion, average order value (AOV), repeat purchase rate and customer lifetime value (LTV).
It can be tricky to evaluate your customer service program, but here’s why you should do it anyway:
To determine how customer service is impacting your brand
If you measure the results and find that you’re not seeing value from support interactions, you’re probably not serving customer expectations. And you have some serious reflection ahead of you, if you want to build a lasting brand. Unhappy customers don’t become loyal customers, nor do they tell their friends and family about your business, which means you’re losing out on valuable revenue sources — especially in an ecommerce climate filled with competition and rising acquisition costs.
With the brands I have worked with, organic traffic and word of mouth made up a significant portion of their growth. Our investment in customer service optimized for customer advocacy, creating real fans that went out and spread the word about our brand and products.
To better understand your customer
By tracking the issues customers contact your support team about, and how frequently, you can use this data to find key trends and issues that your shoppers are experiencing.
I would argue if nothing else, this is the most important thing to track.
What if you found out 50% of your orders resulted in a question about shipping at some point? You would smooth out your communication, reduce your inquiries, and fix the experience so the next shopper has a better experience and is more likely to come back.
Customer inquiries are a treasure trove of rich data for you to dig into to create a better experience for the next customer. But you need your customer service platform to automatically understand the intent and sentiment of each ticket to auto-tag them accordingly.
To understand where your support team is spending their time
To provide excellent customer experience, it’s not enough to have a talented team replying on behalf of your brand. You need to make sure your team is focusing on the right activities and spending an appropriate amount of time on each one.
By measuring your team’s activity and watching those metrics over time, you can figure out where you might have inefficiencies to fix, or activities to reprioritize. You should also be able to figure out which agents on your team may need more training and support.
Customer service platforms, like Gorgias, have this tracking built in. And our intuitive dashboards provide a quick look at the health of your support team, at a glance.
To balance revenue-generating and expense-gathering
Customer acquisition is becoming more expensive, so keeping track of customer service can give you an idea of how much customer service truly provides within your organization.
To calculate the true lifetime value
As mentioned above, your customers’ lifetime value is a metric you should follow on a regular basis. True lifetime value is the measure of a customer’s worth over the duration of the customer-business relationship.
Keep in mind, it’s always less expensive to keep current customers than to find new ones. This is increasingly true as customer acquisition costs and social media ad prices continue to soar.
Key indicators that your customer service program isn’t up to par
Beyond bad reviews and customer complaints, there are a few quick ways you can tell if your customer service program is not doing well.
These four key indicators are major signs that your customer service program needs some work.
High contact rate (over 33%)
If you have a contact rate (tickets/orders for a given period) of over 33%, you can be fairly certain that customers are not as satisfied as they could be. If your organization notices high contact rates, you should investigate why so many customers feel they need to contact you. Something about your customer journey, communication, or product is not serving customer needs.
In any case, a deeper dive is necessary if you start to notice a high contact rate. Start by understanding your top drivers, and from there, it should become obvious what you need to fix in the journey. Potential fixes could include adding a help center, updating packaging, sending confirmation emails, or introducing a chat solution like Gorgias, to take advantage of our Quick Replies.
By surfacing answers to FAQs or providing ways for customers to initiate their own returns (all possible with Gorgias!) you can decrease contact rate and free up your agents for more important conversations.
Leading indicator: multiple touchpoints per customer
The goal of your customer service team should always be to resolve tickets quickly, efficiently, and professionally. If a customer has to reach out to your brand multiple times across many support channels in order to get the support they need, it’s a good indication that you need to reevaluate your omnichannel support strategy to start providing excellent customer service.
Low customer satisfaction (CSAT) score (under 4/5)
Regardless of your contact rate, your customers should be coming away from those interactions feeling good about your company and the service quality it provides. There is no acceptable reason for a low CSAT score, and you should always take a closer look when you see it starting to slip.
With a customer service platform like Gorgias, you can get a big picture view of the CSAT across your entire ticket volume and then zoom in on low-scoring tickets to start spotting issues and trends. Both perspectives are necessary to find and solve CSAT problems.
Read our Director of Support’s guide to improving CSAT scores for more guidance.
Leading indicator: friction in customer conversations
While you QA your support tickets, be on the lookout for signs of customer frustration early in the interaction. For example, they might mention that they’ve already chatted with multiple agents or that multiple proposed solutions haven’t worked. If customers seem annoyed from the very start of their communication, it’s likely due to inefficiency or lack of training somewhere within your customer service process.
Inconsistent first response time (FRT) and total resolution time (TRT)
Your FRT will fluctuate, and most people understand that, but 2-3 hours waiting for a phone call and 4 days for an email is unacceptable for today’s shoppers.
An appropriate FRT and TRT depends on the industry and vertical, but if you’re an online store, you can check out our ecommerce customer support benchmarks.
Any merchant should be able to forecast, hire, and have some tricks up their sleeve to make sure their team is responding in a reasonable timeframe, and when you write back, the total time to resolve should also be relatively quick.
Leading indicator: high first response time
Of these two response-time metrics, FRT is the leading indicator. If your FRT is high, your TRT will inevitably be that much higher. And the wait for the first response is the most noticeable lag from a customer perspective. If you’re getting complaints about response times, seeing the effect on your CSAT, or seeing poor response times in your customer service dashboards, put your initial energy into improving the FRT.
Significant percent of revenue spent on support
The amount of revenue your organization spends on support can also glean important information about your customer service performance. There are varying numbers depending on industry and company size, but for example, ecommerce companies should aim to spend anywhere from 10% to 15% of revenue on customer service. If you’re spending significantly more than that, it may be a sign that it’s time to take a closer look at your customer service metrics and KPIs.
Leading indicator: low agent efficiency
If you are spending a significant percent of revenue on support, it’s likely that either you have an extremely high contact rate (more customers writing in), or you need to examine how many tickets your agents are responding to. Low agent efficiency also impacts your first response time and ability to scale.
If your response rates are low and you suspect your response time may be a factor, here are some tips on how your team can improve customer response times.
12 powerful customer service KPIs to help with your evaluation
Now, let’s dive into 12 of the most important customer service KPIs you can start tracking today to help evaluate your company’s customer success program.
Note: It’s hard to create an one-size-fits-all reporting template — due to the differences between industries and companies — but a solid understanding of these metrics will help you create a plan for tracking the ones that matter most to your business.
1) Customer satisfaction score (CSAT)
Customer satisfaction score is perhaps one of the most common — and important — customer service evaluation metric. CSAT tracks how satisfied customers are with your company’s products and services immediately following an interaction with a customer service agent. A high CSAT is a reliable measure of good customer service.
How is it measured?
To measure your customer satisfaction score, you’ll need to gather some data from your customers. This is usually done in the form of a Likert scale customer satisfaction survey. You could ask a question like “On a scale from 1 to 5, how satisfied are you with your experience today?” Once you have substantial data, you can utilize this formula:
CSAT = (Satisfied customers / Total customers surveyed) x 100
Tools for measuring CSAT
There are a ton of tools out there to help you track your organization’s CSAT, but a few to check out include:
Why is it important?
By tracking your company’s CSAT, you will gain important insight into exactly how satisfied customers are right after an interaction with a member of your team. Tracking your CSAT should be a continuous process, and reviewing data on a monthly basis along with other customer service metrics can be valuable — it can even help identify potential issues before they grow too large.
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2) Net promoter score (NPS)
Another popular metric among customer service teams is net promoter score (NPS). This metric essentially measures customer loyalty. It will tell you how effective your customer service is as well as how satisfied customers are by gathering data about how likely they are to “promote” your brand.
Read more about NPS scores and how they’re calculated.
How is it measured?
To determine your company’s NPS, you will use a survey approach — similar to CSAT — and ask your customers, “How likely are you to recommend our brand to a family member or friend?” Then, to determine your NPS, you would subtract the percentage of detractors (people who say they wouldn’t promote your brand) from the percentage of promoters (those who said they would promote your brand). The resulting score is a whole number between -100 and 100.
NPS = Percentage of promoters – Percentage of detractors
Similar to tracking CSAT, NPS data can be continuously gathered, but we recommend checking in on a monthly basis.
Tools for measuring NPS
Check out our guide to how to create an NPS survey that gets responses.
Why is it important?
Your brand’s NPS directly ties to the customer relationship as well as how well your customer success team is doing. Tracking NPS along with CSAT can give you a clearer picture of how customers feel about your organization.
3) Customer retention rate (CRR)
As mentioned previously, retaining customers is always less expensive than finding new customers, that’s why your customer retention rate (CRR) is a vital metric to include in your ongoing data analysis. Ecommerce companies in particular have an average CRR of about 30%, according to Omniconvert, so if your company’s CRR is lower than that, it could be a sign that your customer support isn’t as effective as it could be.
How is it measured?
To calculate CRR, you will need the following information: number of customers at the end of a given time period (E), number of customers gained within that time period (N), number of customers at the beginning of the time period (S).
Then, plug those numbers into this formula:
CRR = [(E-N)/S] x 100
Tools for measuring CRR
Why is it important?
Your company’s ability to retain customers directly relates to its success because when customers disappear, so does revenue.
Want to keep more customers around? Read our complete guide to customer retention rate.
4) Net retention rate (NRR)
Sometimes known as net dollar retention (NDR) or net revenue rate, NRR is the percentage of recurring revenue retained from your existing customer base over a designated amount of time. This period can be monthly, quarterly, or annually. According to Klipfolio, a good NRR can range between 90% and 125% depending on your brand’s target customer size.
This is a measure that is most common among SaaS companies, but it can absolutely apply to certain brands in ecommerce and other industries.
How is it measured?
NRR = [(Monthly recurring revenue (MRR) at the start of a month + expansions + upsells – churn – contractions) / MRR at the start of the month] x 100
Tools for measuring NRR
Why is it important?
Net revenue retention is another extremely valuable metric that helps you understand how your customers are feeling about your brand and products, as well as how your business is doing from a financial standpoint.
5) First reply time (FRT)
First reply time, or first response time, is a more simplistic measure, but is just as valuable as any other metric. Basically, first reply time is how long it takes one of your customer service reps to respond to a customer inquiry — on average. This could be over email, phone, or chat. Typically, a “good” first reply time is less than 24 hours in a ticketing system, less than 90 seconds for live chat, and three minutes for phone, according to Klipfolio.
If your brand dedicates a lot of time to live chat, check out these metrics specific to live chat.
How is it measured?
You can calculate your first reply time by measuring the duration of time between when a customer submits a request and the time when a member of your customer support team responds.
FRT = Total first response times during period of time / Total number of tickets resolved in that period
Tools for measuring FRT
Why is it important?
First reply times are directly related to your brand’s CSAT. No customer wants to wait days for an email response, or sit on hold for several minutes. Decreasing your first reply times will inevitably increase customer satisfaction.
6) First call resolution (FCR)
First call resolution (FCR) is a metric commonly used to track call center performance. FCR is essentially the customer support reps’ ability to resolve a customer’s problem or question the first time they call without requiring a follow up. The average standard benchmark for FCR is 70% to 75%, according to global research.
How is it measured?
You can use this simple formula to calculate FCR:
FCR = Total number of inquiries resolved on the first call / Total number of unique inquiries
Tools for measuring FCR
Why is it important?
Your company’s FCR also directly ties to the customer experience. In fact, nearly 60% of customers agree that long holds and wait times are the most frustrating parts of a customer experience, according to the Zendesk Customer Experience Trends Report 2020.
Want to solve customer issues faster? Read our Director of Support’s guide to resolution time.
7) Average resolution time (ART)
As we’ve seen, customers are happier when they don’t have to wait a long time, and average resolution time (ART) is another metric that keeps track of this data. This metric can provide insight into how customer service team members are performing, and lets you see who may need additional training or support.
How is it measured?
To find your company’s ART, you can take the total duration of all resolved conversations and divide that by the number of customer conversations that took place over a specific period of time. This metric is also sometimes referred to as the mean time to resolve, or MTTR.
ART = Total resolution time for all resolved tickets / Total number of tickets solved
Tools for measuring ART
Why is it important?
Your ART is a vital metric that helps keep tabs on how efficient your customer service team is. If your ART is long, or you notice that it’s getting longer, this is a sign that you need to give your processes a closer look and adjust your strategies if needed.
8) Total resolution time
Your company’s total resolution time is the time between when a customer interaction is initiated and when it is completed. This is similar to average resolution time, but focuses on the total time spent resolving tickets rather than the average time spent resolving tickets.
How is it measured?
To measure your total resolution time, gather the start time and end time of each customer conversation over a specific time frame, such as a one-month period. Measuring your total resolution time is straightforward and doesn’t require a formula, but is much easier with the help of customer support tools.
Tools for measuring total resolution time
Why is it important?
Total resolution time will give you a deeper understanding of how long your customer service team spends helping customers solve their issues, which can help inform further strategy and business direction. For example, if the total response time steadily increases over several months, you may need to look at hiring additional customer support reps.
9) Customer effort score (CES)
As a newer metric in the realm of customer success analytics, your customer effort score (CES) tracks how much effort customers feel like they need to put into resolving an issue with your company. Because customers are reaching out to your company for help on a product you sold them, the effort they should have to put into resolving the issue should be minimal, and you want this score to be as low as possible.
How is it measured?
To measure your brand’s CES, you can use a questionnaire with a Likert scale and ask the question, “On a scale of 1 to 5, how easy was your experience today?” with 1 being “very easy” and 5 being “very hard.” Once you have your responses, tally up how many of each score you received — meaning, how many times were you rated a 1, a 2, etc. Then, you can use this formula to determine your CES:
CES = Percentage of “very easy” responses – Percentage of “very hard” responses
Much like NPS, CES is a whole number between -100 and 100.
Tools for measuring CES
Why is it important?
CES gives you the opportunity to see how your customer support team is performing through the eyes of your customers. It may also lead to high cart abandonment rates, hurting your sales. It can also help identify areas for improvement within your operations — especially if you give customers a place for open-ended feedback within your questionnaire.
10) Conversation abandonment rate
Your brand’s abandonment rate is a simple, yet highly informational metric. Whether the conversation is happening via email, chat, or phone, if a customer abandons the session, it should be a red flag that something larger is wrong. If a customer abandons a conversation there is a good chance they are waiting too long or are frustrated by poor service.
How is it measured?
To calculate this metric, all you need to track is the number of abandoned incidents and the total number of incidents. In this context, “incidents” refers to either calls, emails, or live chat sessions. Once you have those two numbers, you can plug them into the following formula:
Conversation abandonment rate = (Number of abandoned incidents / Total number of incidents) x 100
Tools for measuring conversation abandonment rate
Why is it important?
A customer abandoning a conversation they initiated is a bad sign and can lead to poor net promoter scores and high churn rates.
11) Contact rate
Another simple yet extremely helpful metric is contact rate, otherwise known as customer contact rate. This metric measures the percentage of active customers who ask for help in a given time period — usually a month.
How is it measured?
To calculate your company’s contact rate, you can divide the number of customers who contact your customer service team for help over the course of a month by the number of total customers. Then, multiply that number by 100.
Contact rate = (Number of customers who contact you in a month / Total number of customers) x 100
Tools for measuring contact rate
Why is it important?
There are many ways to analyze your company’s contact rate, but one of the most helpful things is to use the number to determine how your company is doing overall. For example, if your company is seeing really high contact rates, it may indicate that customers are contacting your support team about everything because there’s no alternative. This is why it’s important to consider setting up self-service support portals or knowledge bases with FAQs that can help customers handle basic issues on their own — rather than flooding your help desk with “empty-calorie” contacts.
12) Backlog
Otherwise known as revenue backlog, backlog is a metric you can use to determine how much revenue will be coming into your business. This metric can be especially helpful if you are an ecommerce brand that operates on a subscription-based model.
Read more here about customer service metrics specifically for ecommerce companies.
How is it measured?
The only thing you need to determine your revenue backlog is the sum of the values of your customers’ subscriptions. However, this can be much more complicated in practice if your business model has multiple types of subscriptions, so it’s beneficial to use tools to track this metric.
Tools for measuring backlog
Why is it important?
Keeping tabs on your revenue is vital to ensuring the growth and continued success of your brand. By tracking your revenue backlog, you’ll be able to see if revenue is going to drop before it actually does.
Do customer service metrics really affect business growth?
The short answer is “absolutely.”
Customer service is the backbone of a business’s success. You could have the best product on the market, framed in a perfectly optimized website — but give customers a bad experience, and it will be the only thing they remember.
You’ll increase customer happiness by focusing on the customer experience (in addition to product quality, of course) and making positive experiences a priority. And that customer satisfaction leads to repeat customers, new customers, and more revenue.
When you center your customer service efforts around proactive support you can increase the revenue from your top-line customers. The customer service metrics outlined in this article are helpful tools to set you on the right path toward building a more successful customer service program. Paying closer attention to the data that matters most can help you identify areas for improvement, which is necessary in order for any business to grow.
Evaluate your customer service data in one centralized platform, with Gorgias
Now that you know which customer service metrics are the best to track to ensure your ecommerce business’s success, you can start evaluating your existing customer service program’s return on investment (ROI).
Every metric I included above can offer your business better insights into what your current customer service program is doing right, and where there’s room for improvement. You may choose not to track all of these KPIs, but I highly recommend using a platform that can help you organize your analytics in one place — and Gorgias can do that for you. You can even customize the metrics you see in the sidebar with Gorgias.
Our goal at Gorgias is to help ecommerce businesses compete by meeting ever-increasing support expectations with targeted solutions that provide great customer service experiences.
That’s why our north-star metric is the average support performance score our customers receive, based on the service they provide.
If you’re ready to revamp your customer service program, learn more about what Gorgias can do for ecommerce businesses or sign up today.
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