Customer satisfaction is at the forefront of practically every business. A happy consumer base is key for both long and short-term goals – especially if you’re a smaller company that relies on repeat business and word of mouth.
One of the best ways to ensure a business keeps this all-important demographic happy is by setting KPIs (key performance indicators) and metrics to stay on top of satisfaction levels. Introducing KPIs will:
Provide tangible goals for a company to aspire to, in both the long and short term
Allow a business to focus on what matters most to them – be it financial growth, customer retention, a reduction of expenses, or any other measurable goal
Create an atmosphere of learning and encourage internal conversations to be had in the workplace
Make it possible to track what is and isn’t currently working for a business
In this guide, we’ll look at exactly what a KPI looks like, as well as some of the best you can introduce to make sure you’re monitoring the right customer service data for your business.
Customer service and communication statistics
It’s no secret that customer satisfaction is at the epicentre of what defines a great business. Whether your customers are multinational corporations or just regular people, keeping them feeling positive about how you operate as a company will go a long way to ensuring your long term success.
Outsourcing your communications to a virtual receptionist service is a good way to deliver consistantly great service levels of service. Another way to stay on top of the needs of your customers is to ensure you’re doing everything you can to service them through multiple channels. A recent report showed that consumers tend to reach out via a variety of methods to ask for support:
What’s more, it’s telling how consumers react to bad customer service. While everyone is different, the figures show that not getting the response they’re after can leave people ready to cut and run. The numbers show that bad service can result in:
of people leaving without warning
switching brands altogether
actively tell other people not to support the business
considering switching brands
As many as 27% of people would go on to cite poor customer service as their main frustration when it came to issues they were having with a business. And when it came to the most important elements of customer service, the following were voted for as the things which meant the most to consumers:
A friendly and knowledgeable agent
Resolves an issue in one transaction
Someone who doesn’t require them to repeat themselves
Gets information without needing to contact support
One of the best ways to get a grip on how your customers view your services is by introducing a Net Promoter Score (NPS) system. This gives them the chance to accurately let you know how you’re performing, acting as active promoters of your business, passive bystanders, or detractors.
As many as 27% of people would go on to cite poor customer service as their main frustration
The score ranges from -100 to 100, using a scale of 0-10, with the following scoring system:
Survey Monkey found that the following scores were the average across some of the more popular industries:
Consumer goods and services
Elsewhere, using their own rating system, The Institute of Customer Service found that in 2022 there had been a significant increase in year-on-year customer satisfaction levels, with the score rising to a healthy 78.4 from 76.8 in 2021. The organisations found to have the best customer satisfaction levels were:
Interestingly, despite people having such strong opinions on the level of service they receive, the vast majority of people say they wouldn’t complain, but rather just leave without warning. It’s believed that as many as 25 in 26 people won’t mention any gripes they have, and just change providers. This could act as a wake-up call to businesses who think that hearing no negative feedback is a positive.
Perhaps some of the most damning evidence of all comes in the form of the following figures:
of people find a frustrating experience on a website to put them off the brand in general
say a bad mobile experience make them less likely to engage with a brand
say their opinion on a company will lessen if they have a bad experience on a brand’s website
It’s believed that as many as 25 in 26 people won’t mention any gripes they have, and just change providers.
An introduction to KPIs and metrics
Every sector and industry operates with goals in mind. Without a clear target or objective, it’s impossible to measure the success of your business. In order to do this effectively, KPIs and metrics are required to stay on top of your progress. Let’s take a deep dive on how both of these measurables can impact a business.
What is a KPI?
A KPI is a measurable goal, value or target which can be used to work out if your business is succeeding and progressing as you have intended. There are two types of KPIs:
Which focus on the overall performance of a business as a whole
which hone in more on specific departments and processes of a business
One of the most efficient ways to work out what KPI your business should be shooting for is to ask yourself a series of questions. These will determine the areas you need to focus on, as well as what the ideal outcome (the target itself) would be.
- What is your overall goal?
- Why does your goal matter to your business?
- How is progress and success going to be measured?
- What influences will you have on the outcome?
- Who is responsible for the business outcomes?
- How will you know when you’ve hit your goals?
- How often will progress be reviewed and re-visited?
Start with the first question, then work your way through each of the following. By finding the answers, you’ll be able to more clearly envisage your KPI.
Once you have a KPI in mind, it’s time to officially put pen to paper and draft up exactly what your goal looks like. To do that, keep the following in mind:
Start with the first question, then work your way through each of the following. By finding the answers, you’ll be able to more clearly envisage your KPI.
Create a clear objective
Any good KPI needs to be tied in with the core objectives and ambitions of a business. Without this direct link to a wider target, they run the risk of becoming meaningless. What’s more, the numbers you use to measure your goals also shouldn’t be arbitrary. Think about what’s realistic for where your SME is at.
Discuss with stakeholders and management
Communication should be at the heart of everything you do. Those with a financial investment in your business (be it share owners, investors, or even just employees) need to be kept in the loop about what your overall objectives are. Failing to do so could result in misalignment throughout a company.
Management also needs to be kept on the same page – assuming they weren’t already responsible for the setting of the KPIs. Total coherency throughout a business helps to keep everyone aligned and working towards the same objectives.
Create actionable KPIs
A KPI needs to be actionable in order for it to make a real impact. That means assessing current performance and then creating a goal which will propel your business to the next level off the back of it. Proactive steps need to be taken to ensure there’s genuine improvement.
Consistently review your KPIs
This doesn’t just mean reviewing the success of the KPI, but also how effective it’s been at making a genuine impact on your business. It could be that you’re hitting targets, but have realised the KPI was not the right choice for pushing the wider company forwards.
A nice trick for working out if your KPI is ready to go is by using the acronym “SMART”. A good KPI should stick to these basic principles:
Do you have a clear target in mind?
Is it possible to track the success of your KPI?
Is the goal you have in mind realistic?
Will this KPI actually help your business?
How long is it going to take to achieve?
You can take this a step further by assessing KPIs with “SMARTER” – including time which encourages you to “evaluate” and then “re-evaluate” the goals you’ve set. Remember, it’s important to always be evaluating your KPIs to make sure they’re of genuine use and still relevant to your overall business goals.
It’s important to always be evaluating your KPIs to make sure they’re of genuine use
How are KPIs useful?
KPIs can be used in a variety of ways to make sure your communication and customer services are achieving everything you set out to do. Let’s take a look at some of the most important reasons why they can be useful to a business.
By making a KPI public knowledge to the entire team, you put the power in the hands of your employees to make a real impact. They’ll feel more invested in the company as whole knowing that they’re having a tangible impact on the overall success of the business.
Versatile business goals
By constantly assessing and monitoring the success of your KPIs, you can quickly adapt and alter your core business goals to be better aligned with areas where you’re experiencing success.
Address holes in your business strategy
KPIs also help to highlight areas of a business which could be improved upon – before they become a big enough issue to cause an actual problem. Setting these larger goals will make it easier to spot where you’re struggling.
If you decide to stick with the same or a similar KPI over a long period of time, you’ll be able to notice patterns in your business which might not have been apparent beforehand. This also allows you to compare year-on-year or even quarter-on-quarter.
What is a metric?
If a KPI is the overarching goal which you’re striving for, then a metric can be seen as a stepping point along the way. They’re smaller, more quantifiable measures, which let you work out if your objectives are on course or not.
Arguably the most important factor when taking metrics into account is ensuring that the data you’re tracking is relevant to your business and its stakeholders. Good examples of useful metrics across different departments include:
- Achieving a X% of satisfaction amongst customers
- Ensuring X% of calls or emails are answered within a certain timeframe
- Providing X% of customers with a solution to their queries
- Convert at least X% of customers who visit your website
- Increase the number of people visiting a website by X%
- Reach the first page of Google for X% of service pages
- Achieve a X% monthly profit and loss
- Reduce overhead costs by as much as X%
- Achieve a X% gross margin of profit by the end of the financial year
- Increase the size of the workforce by X%
- Reduce employee resignation rates by X%
- Increase overall productivity by X%
Metrics are important for a number of reasons, but chiefly they:
Metrics by their very nature are meant to provide actionable insight through data. This makes them vital in working out where your business is succeeding, and where it could do better.
Help make decisions
It can sometimes be difficult to make a judgement call when it comes to the management of some of your business goals. Metrics will provide you with the key information you need to be able to work out what is or isn’t the right decision.
Keep stakeholders in the loop
Those with a financial investment in your company, customers who regularly use your services, and even your employees will want to know how your business is performing. By using metrics, they’ll be able to accurately assess where you are or aren’t hitting your objectives.
Keep employees in the loop
Likewise, your employees also have a right to know how the company they work for is performing. Metrics give them the chance to understand where a business might be struggling or achieving, and even gives them the power to make an active difference themselves.
The difference between a KPI and a metric
While they might sound similar on the surface, KPIs and metrics are actually very different. The easiest way to understand the difference is to keep the following in mind:
KPIs are a measure of your overall business goal and successes
Metrics are used to measure smaller, specific activities
Somewhat confusingly, KPIs can be referred to as metrics (as they are measurements of your businesses overall goals), but metrics are not KPIs (as they focus on individual areas of the business, rather than the bigger picture).
One of the best ways to remember the difference between the two is to keep the following in mind:
|All KPIs are metrics||Not all metrics are KPIs|
|KPIs give a general overview of the success of your wider business as a whole||Metrics let you know how your wider goals are performing, within individual areas of a business|
|KPIs let people know exactly where a business stands in respect to wider goals||An individual metric does not provide much in the way of an insight on its own|
|KPIs are actively measured as part of a benchmark towards a larger goal||Metrics are measured passively at regular intervals|
|KPIs are guideposts to map out business goals||Metrics are the stepping stones along the path towards business goals|
|KPIs are directly vital to a business||Metrics are indirectly vital to a business|
While they might sound similar on the surface, KPIs and metrics are actually very different.
Customer service and communication KPIs and metrics
Now that you have a better understanding of what they are, it’s time to look at some specific KPIs and metrics which could make a tangible impact on your business. Here are a handful of examples of customer service and communication factors which an SME would be wise to track.
Customer service KPIs and metrics
If strong customer service is at the forefront of your latest business goals, it’s important to make sure you’re tracking data which will have a positive impact on your business. Here are a handful of good examples when it comes to these kinds of KPIs.
Boost customer retention to X%
Keeping customers onboard is one of the greatest struggles for any business. One of the best ways to find out if your customer service practices are having the desired effect is by calculating the amount of people who are coming to you with complaints, but remaining with you after they reach a resolution.
Reduce customer loss to less than X% after a complaint
Increase customer repeat purchase ratio by X%
Reduce customer complaints to X%
Achieve a customer satisfaction score of X%
Nothing speaks more clearly about the manner in which you handle customer feedback than your core satisfaction score. This represents how you’ve handled both the good and the bad from your clients in the past – giving a clearer picture of whether what you’re doing is working or not.
Increase number of customers who promote your business to X%
Reduce total customer complaints to less than X%
Boost overall product satisfaction to X%
Nothing speaks more clearly about the manner in which you handle customer feedback than your core satisfaction score.
Improve Customer Effort Score (CES) to X%
A customer effort score refers to how easy (or difficult) it was for someone contacting you to find a resolution to their issue. This scale will often vary from “very easy” to “very difficult”. Improving this to the point where a customer is able to quickly find an answer to a query will serve to improve wider satisfaction levels.
One of the most efficient ways to achieve this is with the use of a knowledge base – a centralised hub of information which could be made easily accessible to customers. This can also be valuable internally, with employees able to instantly look up an answer to a customer’s query, rather than needing to bring in secondary support.
Reduce total time spent for a customer resolving an issue to X minutes/hours/days
Reduce number of required interactions for a customer to X
Reduce number of “difficult” or “very difficult” CES’s to less than X%
Reduce cost per resolution to X
While it might not feel like it in the moment, every issue that needs to be resolved will cost a business money (you can calculate this cost by taking the monthly operating expense of a customer service department and dividing it by the total number of tickets). As such, it’s smart to think about ways to bring this figure down.
Train X employees per quarter to maximise resolution efficiency
Address and resolve all tickets within X hours/days
Reduce overhead costs by X%
Achieve a Net Promoter Score (NPS) of X
An NPS is a great way to get a feel for whether or not your business is making the kind of impact you want it to. In short, it’s a figure which determines how likely a customer is to promote your business to other people.
The better your overall customer service approach, the higher the chances of your business earning a score which will see people promote your business to others.
Ensure X% of all customers are promoters of the business
Reduce total number of detractors to less than X%
Achieve an NPS response rate of X% amongst customers
An NPS is a great way to get a feel for whether or not your business is making the kind of impact you want it to.
Communication KPIs and metrics
Communication is key for any business. It’s important to make sure you’re communicating as efficiently as possible with the people who matter. As we’re learning, KPIs are an effective way of ensuring you’re following the data which matters. Here are some of the best to keep in mind for this all-important facet of any company.
An Average Handle Time (AHT) of X minutes/hours
The quicker an issue is resolved, the happier your customer is going to be. Your AHT is calculated by looking at the length of time it took from your customer initially reaching out, to the point at which a ticket was closed. Lowering this figure is one of the best ways to improve your overall communication standards.
Reduce hold and wait times for each interaction by X minutes
Reduce amount of back-and-forth interactions by X amount
Handle X% of complaints with hybrid support models (human and AI)
Reduce call abandonments to X%
It’s not always possible to get to customers in time to stop them from hanging up. This can be a particular issue if you’re experiencing a sudden or unexpected influx of complaints. Despite that, it’s still wise to try and lower the percentage of calls lost as much as possible.
Lower the average amount of time a customer spends on hold to less than X minutes
Keep at least X% of all callers on the line to the point they speak with an agent
Conduct a survey to find out what customers consider a reasonable wait time
The quicker an issue is resolved, the happier your customer is going to be.
Improve First Response Time (FRT) by X%
Along a similar train of thought, FRT refers to the amount of time it takes you to respond to a person from the point at which they’ve opened a query. Customers greatly appreciate when you value their time, so this is a fantastic thing to target when thinking about the best ways to streamline your business.
Lower the average response time for a customer to less than X minutes/hours
Ensure at least X agents are available to take calls at all times
Reduce the amount of auto-generated responses to less than X%
Reduce average reply time to X minutes/hours/days
The time between replies is one of the main factors which drives up the total resolution time for any complaint. Finding a way to lower this is one of the most important things you can do to keep your customer base as happy as possible.
Respond to at least X messages per day
Ensure no tickets are unanswered X days after they were opened
Reduce amount of back-and-forth connections to less than X a day
Increase average conversion rate to X%
While the term “conversion rate” might sound like it refers to signing people up to a subscription or confirming a purchase, it can also simply mean the successful completion of an action. In this instance, that means successfully and promptly answering a customer’s query.
Answer X% of all queries
Reduce the amount of people who don’t convert to X%
Have X% of successful customer interactions
The time between replies is one of the main factors which drives up the total resolution time for any complaint.
Other KPIs to measure
We’ve looked at some core KPIs and metrics to track, but these aren’t the only things which your business should keep in mind when it comes to customer service performance. While they may not be at the forefront of your thinking, these targets could prove just as important in the long run.
Analysis of channel performance
This all-encompassing KPI allows you to assess how profitable and effective your customer service performance is. It lets you break down success by different channels (for example telephone, email, and chat support), helping you to assess which methods are or aren’t working efficiently.
Calls per product
Working out and tracking how many calls you receive about specific products or items is a great way to focus your attention on the parts of your business which need the most work. It might be that one item receives a disproportionate amount of complaints. A KPI like this will highlight that quickly, allowing you to take the necessary steps to adjust.
This term refers to the people who were able to resolve their own issues without having to turn to customer support. Finding this out can help you to prioritise the types of issues you need to focus on in the future.
Daily customer returns
How many product returns are registered every day? This is something you can measure to work out which items might need re-assessing or improving on.
Understanding which members of your team are getting the best results can be incredibly useful. They’ll provide insights into what is or isn’t working, which can be transferred to the rest of the team.
Average complaints per day
While it might sound like a negative, understanding how many daily complaints you’re receiving will help you adjust accordingly. This is something which can be tracked over a long period of time to assess how you’re handling things.
If an issue needs to be taken to a manager or supervisor, it’s referred to as being escalated. Understanding this rate will also give you a good idea of how effective your complaint handling process is.
Minutes spent on a call
This could also be included as a metric within wider goals aimed at reducing the amount of customer time you’re taking up.
It’s important to not only work out how often this is happening, but also what the primary cause of it is. This will give you a clear area to target improving further down the line.
Useful links & Resources
We’ve looked at a lot in this guide, but there could still be more you want to learn about KPIs, metrics, and what they mean for your business. If that’s the case, be sure to read our handy list of secondary sources for more information.