How to Measure Customer Service

Customer service is one of the most important interactions you have with your customers, and the customer service experience you offer can either make or break your business.

Customer satisfaction can be directly attributed to great customer service. A satisfied customer is a paying customer, right? A record 87% of customers are likely to make a second purchase if they have a great customer experience. 

If customer service is this important, then it’s a no-brainer to track the metrics that have the highest impact on the customer experience and your bottom line. But how do you know which ones to prioritize? 

In this article, you’ll learn how to measure the top customer service metrics, why they’re important, and the best practices to enhance your customer service team’s performance.

1. Identify Your Key Metrics

Before you can evaluate your company’s customer service, you first have to identify the right metrics to measure. The key performance indicators (KPIs) below reveal important insights into customer sentiment, operational effectiveness, and overall contact center performance.

Customer Satisfaction Metrics

Customer Satisfaction (CSAT) Score

Customer satisfaction score, CSAT score, measures how satisfied or dissatisfied your customers are with your products, services, business, or the overall customer service experience.

It is measured at transaction or interaction touchpoints using dedicated CSAT surveys. Organizational and agent-level customer service teams then use the responses gathered from this customer feedback to gauge customer sentiment, monitor service quality, and spot opportunities to improve performance.

CSAT scores are calculated by dividing the total number of satisfied customers by the total number of survey respondents and multiplying this amount by 100 to get a percentage.

Net Promoter® Score (NPS)

Net Promoter Score® measures customer satisfaction based on the likelihood of an individual recommending your products, services, or business. Customer responses are graded on a classic 11-point scale, with inputs ranging from 0, being “not likely at all,” to 10, being “extremely likely”

Based on their responses, customers are then classified into promoters, passives, and detractors, with promoters being the most likely to make recommendations and detractors being the least likely.

To derive your NPS®, ranging from -100 to 100, subtract the percentage of detractors from the percentage of promoters. A high score will indicate that more customers are satisfied. 

Customer Effort Score (CES)

This customer satisfaction metric measures the effort it takes a customer to receive a response from your business, such as getting their question answered or ticket resolved.

Customer effort scores are calculated with direct surveys, usually sent after the customer interacts with a customer service agent. 

As with NPS®, CES tells us who our promoters (5+ ratings), passives (neutrals), and detractors (<5 ratings) are. 

Operational Efficiency and Customer Support Metrics

First-Call Resolution Rate (FCR)

First-call resolution rate, also known as first-contact resolution rate, measures how effective your contact center is in meeting the needs of your customers without further follow-up or call-backs.

If you have a high FCR rate, meaning fewer tickets come in after the first customer call or contact, this is a good indicator that time and resources are being channeled in the right direction. The reverse is the case for low FCR. Having customers follow up on unresolved issues indicates your processes need improvement.

FCR is also a direct way to measure customer experiences, as the higher your FCR score, the more likely your team is successfully closing out customer service interactions during the initial touchpoint and, in turn, the less likely your customers are to churn. 

First Response Time (FRT)

First response time, or first response rate, measures the time between a customer’s first ticket outreach and when your contact center responds. 

To find your average first response time, divide the total FRT for received customer inquiries by the total number of interactions your agents receive within a given period of time.

Average Handling Time (AHT)

Unlike FRT, which measures the time it takes for an agent to respond to a customer’s initial inquiry, AHT, or average handle time, calculates how long one interaction takes your agents and customers from start to finish.

Average Response Time

Another metric to measure customer support efficiency is the average response time. 

Also called average reply time, this metric calculates the total time it takes your customer support agents to respond to a customer ticket on average.

To find your average response time, divide the total response time by the total number of replies your agents provide within a given time period.

Resolution Rate

Resolution rate is the percentage of customer service requests successfully resolved by your customer service agents within a certain timeframe. This is a healthy indicator of your contact center’s effectiveness in satisfying customer needs. 

To calculate your resolution rate, divide the total number of resolved tickets by the total ticket volume your agents receive and multiply by 100.

2. Choose Your Methods for Measurement

The next step after identifying your key metrics to measure is choosing how to do it. Effective options include using real-time feedback surveys, AI-powered technologies, and social listening tools.

Capture Real-time Customer Feedback After Every Interaction

Real-time customer feedback about your agents’ performance can be captured via a variety of channels, via website forms, email, and in-app messages. Whether solicited or unsolicited, survey feedback collection is most effective when it is personalized, brief, and gathered at optimal times.

The best time to collect customer feedback about contact center agents is during or immediately following service interactions when the experience is fresh in the customer’s mind. 

Your support team can then translate customer feedback into insights that not only help you understand customer sentiment but also improve your company’s customer service and business processes. 

Use AI Text and Speech Analytics to Monitor 100% of Customer Service Interactions

What happens when you use AI-powered conversation analytics tools to review your customer service agents’ performance? You can analyze every single interaction to drive contact center training, engagement, and rewards, and ensure faster, more efficient, and more personalized service delivery.

Medallia’s Text Analytics and Speech Analytics natural language software solutions analyze transcripts from customer service interactions — such as live chat interactions and recorded customer service calls — to identify patterns, common issues, and areas for communication improvement. These tools additionally track and automatically measure KPIs like CSAT, FCR, and customer sentiment.

Social Listening

Social listening, a proactive customer feedback strategy that involves monitoring social media mentions of your brand, is one of the most important ways to evaluate customer sentiment.

Not only can you listen in on your brand, product, or service mentions, but you can also discover what your customers are saying about your competitors and industry as a whole. 

Implementing a social media monitoring strategy at scale provides your customer service team invaluable data points to build public rapport and also safeguard your brand reputation by nipping negative feedback in the bud before it escalates.

3. Analyze Touchpoints in the Customer Service Journey

Your customer service journey starts as initial contact and ideally ends with a resolution. But in between those milestones exist a variety of other potential touchpoints, such as in person interactions as well as digital ones across social media, live chat, and phone support, that are critical to customer satisfaction.

According to Salesforce, 80% of customers consider customer experience as important as a company’s products or services. And personalized experiences can be incredibly powerful. In fact, Medallia researchers have found that most consumers are willing to spend more if they can offer a customized experience (61%) — and even more (82%) say tailored experiences influence brand choice at least half of the time when shopping. 

Consider tracking conversations and interactions across your omnichannel customer service journeys and touchpoints — and find and implement strategies to improve personalization during these customer service experiences — all of which have the potential to increase conversion rates, customer retention, and overall customer satisfaction. :

1. In-person customer service touchpoints
2. Customer service touchpoints on your company’s website
3. Customer service touchpoints on your company’s app
4. Contact center support channels (self-service portals, chatbots, call support, live chat, SMS, email, support tickets, etc.)
5. Customer feedback (surveys, social media, forums, online reviews, etc.)

4. Iterate and Improve

Analysis identifies areas your support team needs to optimize to meet and exceed customer expectations. But It’s one thing to analyze data and another to act on the insights.

As a best practice for customer service measurement, regular reviews should be embedded into your support team’s internal processes. Don’t let analytics data sit idle — iterate on gathered insights from customer-agent interactions and performance to identify weak spots and improve your customer service strategies.

Best Practices for Customer Service Measurement

The success of any business depends not only on profitability but also on maintaining a strong reputation.

Customer service contributes to shaping your brand perception. This is why customer service efforts should be measured — to understand customer sentiment for performance evaluation. 

Consider these best practices for measuring customer service.

Combine Quantitative and Qualitative Data

The first step is to combine quantitative data, such as survey scores and analytics, with qualitative data from customer feedback, live chat transcripts, phone call transcripts, and social media monitoring.

This combination comprehensively measures hard data with other insights around sentiment, trending topics, and recurring themes that help us understand customer satisfaction, such as customers’ feelings and opinions, and help us make better-informed customer service decisions.

Utilize Omnichannel Feedback

Sometimes, the best way to know how a customer is feeling about your product or service is to ask. But if you complicate feedback collection by asking people to open another platform or window, chances are you won’t receive any responses. 

The best way to gather omnichannel feedback and capture real-time sentiment is to meet your customers right where they are — whether that’s via email, your website or app, or social media. Make things as convenient as possible for customers.

H3: Monitor Real-Time Customer Interactions

Use AI-powered tools such as Medallia’s Text Analytics and Speech Analytics software to monitor and analyze real-time customer interactions. 

These insights measure customer sentiment to not only proactively resolve issues but also personalize and improve the overall customer experience. 

Understand Customer Sentiment

How can you deliver excellent customer service if you’re not sure how your customers perceive your brand?

Customer sentiment reveals how your customers feel about your business. These feelings could be negative, positive, or neutral. 

Not only do metrics such as NPS® and CSAT provide insights into customer sentiment, AI-powered analytics can assess sentiment in real time, as can social listening, giving customer support agents actionable learnings for how to address pain points and improve customer satisfaction.

Benefits of Customer Service Measurement

The benefits of measuring customer service performance are manifold and collectively contribute to overall business success. Let’s review the key advantages below.

Improved Customer Experience

Negative customer service interactions motivate most of us — 65% of consumers — to consider switching to a competitor brand. 

This clearly indicates the need for concentrated efforts to improve customer experience by using customer experience management to maintain excellent customer service standards — at scale — or risk losing customers. 

Effective Resource Allocation

By identifying which aspects of customer service require additional attention, businesses can allocate resources strategically to areas that will have the most significant impact on customer satisfaction and business outcomes.

These insights can only be gained from customer service measurements.

Competitive Advantage

What differentiates you from a competitor offering a similar product or service in the same industry is not your brand colors — it’s your competitive advantage.

One way to gain a competitive advantage in today’s business world is by delivering exceptional customer service. Customer service measurement hands you the insights you need to improve your internal processes to aim for standout excellence in service quality.

Proactive Issue Resolution

With real-time metrics from effectively measuring customer service, your support teams can proactively handle emerging issues before they escalate. 

Resolutions become less reactive and more anticipatory as measurement provides useful insights that reveal customer sentiment in the moment.

Improved Service Quality

Customers’ needs and preferences are in many cases fluid — sometimes due to age, season, and other external factors beyond the control of your business.

Regular customer service measurement empowers your support teams to pick up on trends to stay ahead of customer service interactions.

Enhanced Customer Satisfaction

Satisfied customers are highly likely to make a repeat purchase or recommend it to other people.

Customer service measurement allows businesses to gauge customer sentiment accurately to implement personalized strategies that heighten customer satisfaction across all touchpoints.

Improve Customer Service with Medallia

Done right, a customer-centric approach is invaluable to business growth as feedback is tailored to the customer’s needs at every point in time.

Medallia offers a comprehensive range of social listening, real-time customer feedback, and AI-powered Text and Speech Analytics solutions to revolutionize your customer service performance and help your customer support teams make informed and effective decisions. 

Connect with a Medallia expert today to learn more.