What are the Right Metrics for Customer Service?

The question about the right metrics to use to evaluate Customer Service came up a couple of times this month at board meetings. My thinking on the topic is that there are three primary metrics that would be great to see at the strategic level with respect to customer service:

1. Number of issues per X.

The X is whatever basis will normalize the number of issues in a way that the metric is a great indicator of the rate of issues truly going down over time. For example, if issues mostly come from new customers, then X would be the number of new customers. If issues are pretty constant across the number of seats, then X would be the number of seats. If the number of issues relates to page views or a specific use case, then use that.

The number is probably the most important Customer Service number from a strategic perspective, as Customer Service is one of the great places in the organization to get insights from customers on how your product and service can be improved and it is up to customer service to get the information back into the organization and prioritized in a way that the product and service are actually improved. If things are improved, the number of issues per X should go down (at least until new issues are created). Clearly, issues per X going down is a great indicator that things are working (it might still spike up with new releases, but should mostly be showing a downward trend).

The types of improvements that customer service can drive

  • Development improvements such as better QA to eliminate bugs before they reach the customer
  • User Experience issues (customers call because they can’t figure things out because the UI is not intuitive enough)
  • Product Management process improvement. Product feature/use case opportunities (customers call because they think the product should be better in some way)
  • In product and online help that make it easier for customers to find their own answers quickly and easily
  • Better training on the use of the product and service
  • Better answers in Customer Service so that the customer doesn’t need to open multiple tickets.

2. Customer Satisfaction with Customer Service issue resolution

… and customer satisfaction overall. The first metric is all about getting better as indicated by issues per X going down. The metric can also go down because the service gets harder to use and customers give up. The customer satisfaction metric will help ensure that customers are satisfied (better yet, thrilled) with the service that they receive while work is being done to eliminate the need for customer service.

3. Customer Service Profit Margin

Most organizations need to offer standard customer service, but have the opportunity to offer higher levels of customer service and charge for it (working hours vs. 24/7 customer service is an example).

This is generally a more advanced step for many companies and for some product markets this won’t make sense. In these instances Cost per X (using the same X as above) or cost per resolved issue are good alternatives. That said, keep thinking as you might find opportunities to build a profitable service and make your customers happier at the same time.

These are my best high level metrics for customer service, at least for now. They are relatively easy to calculate and you should not need to change your technical support system much in order to create them. Also, if you are not currently surveying customers after ticket resolution or in general, you should consider starting. There is nothing better that getting the perspective of the customer! As a venture capital advisor to many growth technology companies, it gives me great comfort when I see these metrics (I know that the company is focused on them) and more comfort to see these metrics improving!

Of course, the customer service department will use more detailed metrics to help it figure out what to improve and to help it figure out how the changes are working, but all of the more detailed metrics automatically roll up into the three strategic metrics.

BTW, if you really want to understand your company and customers well, become a customer service agent for a day periodically and you will get a great perspective on how your company is perceived by its customers.

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