Choosing The Right Metrics For Your Customer Service Operations

Kate Leggett
Vice President, Principal Analyst
May 31, 2011

Measuring the success of your customer service by using a single metric is impossible. It’s like flying a plane by just looking at your speed without taking the altitude into account. You need to measure a set of competing metrics to make up a Balanced Scorecard that includes the cost of doing business and customer satisfaction. Service operations that have sales responsibilities should also track revenue generated. And in industries with strict policy requirements, like healthcare, insurance, and financial services, compliance with regulations is yet another set of metrics to track.

Choosing the right set of metrics to measure also depends on the stakeholders that use this information. For example:

  • Service managers need operational data that tracks activities, while executives want strategic KPIs that track outcomes of customer service programs.
  • Service managers need granular, real-time data on their operations, while executives need to see only a small number of KPIs on a periodic basis.

I always think of it as a two-step process to pinpoint the right metrics for all your stakeholders:

  1. Understand the strategic objectives of your company; choose the high-level KPIs for your contact center that support your company’s objectives. These are the metrics you will report to your executives.
  2. Choose the right operational activity metrics for your contact center that map to these KPIs and which the customer service manager uses on a daily basis to manage operations. Here’s an example of this mapping:

KPIs measuring service outcomes

Operational metrics measuring  activities

  • Cost of service
  • Average handle time
  • Average talk time
  • Average hold time
  • Agent productivity
  • Rework
  • Number of escalations to tier two support
  • Agent turnover and training
  • Schedule adherence
  • etc…

So how do you choose the right metrics? We all know that there are lots of predefined metrics that you can use — and we also know that tracking lots of metrics doesn’t mean that you are performing any better than if you only tracked a couple of metrics. My tips include:

  • Align activities to outcomes. If you are measuring and optimizing an activity metric that cannot be mapped directly to a KPI, it is probably of lesser importance to the success of your business.
  • Customize metrics that are right for your business. Predefined activity metrics provided by customer service software tools are vendors’ best guesses at the measures that will be needed. Use these metrics as starting points to help guide the definition of metrics that are valuable for you to track. For example, don’t only track handle time, but also track hold time to understand your customer’s experience when waiting in a queue.  Likewise, don’t rely on predefined KPIs. Use these to calculate the right KPIs for your organization, pulling data from several different applications and systems.
  • Analyze metrics by varying timeframes. Sometimes overall metrics look good, while actual metrics over shorter time intervals don’t. For example, daily handle time metrics may be aligned to operational goals, which can hide large hourly fluctuations that point to staffing challenges.
  • Look at metrics for the different communication channels that you use. See if there are discrepencies, and do a root-cause analysis to understand why differences exist.
  • Use the right set of metrics for your audience. Executives speak the language of KPIs and service managers speak the language of activity metrics. It’s important to create a language bridge between these groups of metrics. For example, the request of a service manager customer to add headcount to a knowledge management program can be framed as “We need to evolve our knowledge management solution to provide a better quality of knowledge to our agents. This will ultimately lead to a measurable, quantitative increase in our Net Promoter Score, an increased first-time fix rate, and lower operating costs.”

Metrics is an art as well as a science, and you may have to go through several iterations to pick the right ones that really measure business success.

And don’t forget that good customer service is the result of good technology, good customer service processes, and — most importantly — a well-managed organization that values its employees. Pay attention to the human factors, such how you measure your agents, how you compensate them, and how you empower them to make decisions to ensure that they deliver to expectation. After all, your agents are the key to your success.

Check out the full report on the Forrester site.

Related Forrester Content (For clients or purchase)

How To Implement Effective Customer Service Metrics
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