5 Ways to Measure Customer Service Performance

Customers have more choices than ever when it comes to where to take their business. At the same time, businesses have a remarkable amount of data at their disposal to learn how well they serve their customers. Businesses that can measure customer service performance and then analyze it with the right metrics can enjoy a competitive advantage over their peers.

To accurately measure customer service performance, a business must first determine its relevant metrics. Key metrics vary depending on industry and the unique goals of an individual business. Still, having the apparatus for measuring your customer service performance is only one part of the equation; the other part depends on incorporating general benchmarks and custom goals into what you track.

To truly get the most out of your efforts to measure customer service performance, you’ll need to track basics like response time, resolution time and customer retention. Even then, that’s just the beginning. Read on for a primer of the key metrics to measure your customer service performance.

1. First Response Time

The time it takes to respond to a customer query is one of the most critical of customer service performance metrics. Most customers expect to get a response almost immediately through chat or phone support and within a few hours at most via email or support tickets. This makes it essential to monitor your first response time for customer service queries.

First response time gives you a glimpse into how long it takes your team to reply to a customer query. The shorter the average first response time, the more likely your customers are to be satisfied by the initial customer service efforts they receive.

Measuring average first response time is straightforward. Pick a specific period of time to track—whether days, weeks or months. Then, divide the total time taken to send first responses to queries by the total number of tickets responded to for the same period. Most customer service software can calculate this for you automatically.

Once you have a sense of your average first response time, you can work on ways to reply to customer service queries faster. AI-powered customer service tools can make for more robust self-service tools, which reduces the number of queries a customer service team has to handle. You can also send out auto-replies, which helps you get back to customers quickly while your team works on the issue internally.

2. Average Resolution Time

It’s not enough to simply respond quickly—businesses also have to come up with a solution in short order if they want to keep customers satisfied. Businesses can measure their average resolution time through a simple formula (sum of all case resolution durations divided by the total number of customer cases). The lower the average resolution time, the more likely you are to have satisfied customers.

There are several common strategies to help lower your average resolution time. Some businesses opt to build out a more robust self-service solution. This helps customers solve their own issues and, when help is still needed, gives customer service representatives more information to help identify solutions.

Another popular option is to give customer service reps more leeway with how they can resolve customer issues. This often takes the form of generous policies that make it easier for customers to return, replace or exchange items. When reps are able to make decisions without having to escalate as many tickets, the average resolution time typically shrinks. This all makes for much happier customers who are more likely to come back in the future.

3. Resolution Rate

Ultimately, your customer service performance should strive for as many resolved queries as possible. If you’re paying attention to your first response time and average resolution time, it makes sense that you should also track your resolution rate—the biggest metric of overall customer service success. To calculate the resolution rate, you should subtract the number of total unresolved cases from the number of total customer inquiries, dividing this by the total number of inquiries. The lower this number, the better you’re doing in terms of delivering outcomes for customers.

Resolution rate offers an at-a-glance view of how well your customer service reps are addressing issues. This figure should reflect how well your first response and resolution time metrics are tracking while also factoring in the number of tickets that actually get solved. This calculation helps you determine how many queries your reps are completing—not just how fast they make it through the queue. The ultimate goal of great customer service is to resolve issues, of course, making it essential to track your resolution rate.

4. Customer Retention Rate

Monitoring customer service performance is only one part of the equation for delivering best-in-class customer experiences. Businesses also need to keep track of their customer retention rate, which can reveal how many customers bought from your business (or continued subscribing to your services) over a period of time. Customer service query resolution only measures how well a business responds to issues—it doesn’t account for transactions that require no escalations. That makes it crucial to look at customer retention rates as well.

Retaining a customer is less expensive than acquiring a new one, making this metric invaluable for businesses that want to generate more revenue through repeat business. To track your customer retention rate, you'll want to calculate the number of new customers (out of your overall customers) at the start vs. at the end of a given period of time. The higher this number, the better you’re doing at getting customers to keep coming back.

5. Customer Satisfaction Score

Businesses are smart to measure customer satisfaction levels after interacting with a service representative—failure to do so may leave you without valuable insights. These surveys help illuminate potential issues with your customer service processes or staff. Consider that customers who are dissatisfied and have no way to express their frustration may simply take their business elsewhere. This leaves you with less information on how you can improve, and potentially less business as well.

Whether or not you already survey as part of your customer service strategy, measuring your customer satisfaction (or CSAT) score can be as easy as framing existing questions and potentially adding a few more. Or, if you’re new to surveying, create a survey that puts CSAT at its core. Typical CSAT questions ask customers to rank their sentiments on a sliding scale, measuring from “Least Satisfied” to “Most Satisfied,” or some variant.

With survey scores in-hand, you can then chart out the average response type and determine how well your customers believe you’re handling their queries based on what questions you ask.

Quality customer service means measuring, tracking, and tweaking your efforts constantly. Data can help you understand weaknesses and strengths within your approach to customer service—so long as you know what to look for. These measurements can steer you in the right direction and guide you through the process of collecting the right kinds of data to get the most useful insights possible. No matter your industry or customer service goals, knowing what to look for—and how to calculate it—can help you make the most of your efforts to surprise and delight your customers.