To keep providing great service to your customers, and in turn keep your business profitable, it is essential to know (with certain customer service metrics) how your customers as well as your leads evaluate the quality of your current customer services. Beyond their satisfaction of your brand, understanding their behavior as users and buyers will support your retention strategy.

A loyal customer is not just of value because of the repeat business they generate, or the guarantee of a regular income from them, but also because they are likely to tell others about their experience, especially with the advent of social media and influencers, so an ideal situation would be for users to become brand advocates and product ambassadors. It’s no longer about building a customer base, you should be looking to build a fan base!

As such, tracking the relevant customer service KPIs will be key to make the best decisions for your business. It is no secret that in the age of digital transformation, customer analytics are absolutely vital to a more profitable business. We’ve listed the most fundamental indicators beyond customer satisfaction (CSAT).

6 fundamental customer service metrics:

  • Customer Effort Score (CES)

How easy is it to do business with you? This is what this metric determines. Usually measured through a typical customer satisfaction survey, users will evaluate their experience using a seven-point scale ranging from very difficult to very easy. This KPI should serve as evidence of how frictionless the customer journey is perceived to be, and you should obviously be aiming for a “Very easy” score. Ease of service is not just about your product, it’s about every interaction the customer has with your company, including contact center and e-commerce channels.

  • First Contact Resolution (FCR)

Usually calculated as the rate of contacts where the customer didn’t need to reach out to more than once to solve their issue, FCR is generally considered good when it’s at least 85%. In the age of omnichannel contact centers, it can be difficult to measure as there will usually be multiple contacts in a social media environment as the conversation will flow naturally. You could also be facing issues to have a single view of the customer if your contact center software doesn’t fully integrate all your channels. FCR usually goes hand in hand with Cost to Serve as the more contacts per customer, the more expensive they are. You may also wish to consider tracking the average number of contacts it takes for a customer issue to be solved which gives you a slightly different view of ease of service in your contact center.

  • Life Time Value (LTV)

This metric allows you to understand the profitability of a customer spanning across their entire lifecycle. A single buyer may generate lots of revenue in a single purchase, but then never repeat again, whereas some customers buy more regularly and end up spending more. Measuring LTV is a powerful tool to adjust your marketing strategies as you can identify high-value customers and determine dedicated loyalty programs for them. In fact, LTV is just as important a retention indicator as churn.

Calculation is fairly straightforward: average spend x purchase recurrence x lifespan

  • Net Promoter Score (NPS)

We mentioned building a fan base earlier and that is exactly what the NPS tells you. It is based on a simple question that you usually ask during a satisfaction survey and goes along the lines of “How likely are you to recommend us to a friend or relative?”, which the user can then evaluate on a scale ranging from 0 (not at all likely) to 10 (very likely).

NPS is not expressed as a percentage, it’s actually an absolute value between -100 and +100. To work out NPS, you will first need to split collected scores from the survey in 3 groups:

  • Promoters: scored you 9 or 10
  • Passives: scored you 7 or 8
  • Detractors: scored you 6 or below

Then, deduct the percentage of detractors to the percentage of promoters, leaving the passives out. As an example, if you have 40% of promoters, 25% of passives and 35% of detractors, your Net Promoter Score will be +5.

As a rule of thumb, an NPS above 0 is considered good and a score above 50 is excellent.

  • Average Revenue Per User (ARPU)

A different way to measure the value of a customer, ARPU is a common KPI to understand how much customers are spending with you and is particularly popular with subscription-based organizations such as telecommunications companies.

To calculate ARPU, first define a set period of time, which can be a billing cycle or a total subscription period. Next determine the total revenue generated by all users and divide it by the total number of users.

Of course, tracking ARPU won’t tell you why customer spend varies but it’s a start to explaining variations in EBITDA.

  • Churn

Also known attrition rate, churn is an absolutely essential figure to track when customers have the option to stop using your business. Again, this is a particularly common metric in subscription-based businesses. Churn rate is the evaporation of your customer base, meaning it is the difference between clients you’ve acquired and clients who have left. As a business, you’re looking for growth and a high churn rate means that you are acquiring fewer customers than you are losing. Churn is also closely related to average life time and the concept of survival rate. Remember, it’s more expensive to acquire a new customer than to keep an existing one so even if you’re a start-up, make sure you are giving your customer service the attention it deserves!

Of course these are not the only important KPIs you should be tracking. Depending on the type of business you run, you also may wish to consider others, for example if you are an e-commerce company, analyzing drop out rates at each stage of the conversion funnel will give you essential behavioral insights.

Let us close this article with a reminder that a good contact center software should keep you informed about KPIs in real time. Our clients love the EVOLUTION monitoring and reporting features and we’d be delighted to show them what they can do!


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