KPIs To Evaluate The Health Of Your Customer Service Operations
In times of high customer turnover and economic uncertainty, companies must evaluate their operational health. In doing so, executives can uncover opportunities to improve their businesses and stay ahead of their competition.
Setting realistic key performance indicators (KPIs) and benchmark goals is one of the best ways to diagnose operational challenges. Businesses that don’t measure KPIs are missing the mark, which results in lower customer satisfaction, customer churn, and unnecessary expenses.
Many understand the importance of customer experience (CX) but may not know how much it can truly influence their bottom line. Through CX investments, companies can remain competitive, gain more market share, reduce churn costs, and build good brand reputations to generate more profit through word-of-mouth referrals and upsells.. A 2023 Zendesk study on CX trends found that 70% of consumers report spending more with businesses that offer fluid, personalized, and seamless customer experiences.
Every executive should focus on customer experience (CX) across every department. As crucial as CX is for companies, a Forrester report found 80% of CX teams lack essential skills.
To upskill your CX performance and increase your operational health, here are the KPIs we recommend tracking to ensure CX is only adding and not hurting revenue. We’ve broken these KPIs into customer onboarding, customer support, and customer termination.
Interested in bringing these KPIs to your team? Here’s a downloadable checklist.
Customer Onboarding
Onboarding customers with great CX is critical, as it can make or break the relationship.
Unfortunately, over 90% of customers believe companies “could do better” with their onboarding process.
Onboarding is an excellent opportunity to show your clients exactly what they signed up for when they decided to hire your business. Let's explore why companies should put CX at the center of their onboarding process.
Here are the KPIs in customer onboarding we recommend tracking:
Order-to-cash
Customer satisfaction score
Why Is Order-To-Cash Important?
Businesses that track OTC avoid billing issues, delayed fulfillment, outstanding invoices, and dissatisfied customers, impacting bottom-line revenue.
OTC is a cyclical process that begins when a customer places an order and ends when the payment is cleared, or cash is received. It is essential for businesses to review the time between a client signing a contract/order and when they receive their first invoice.
By tracking OTC, companies will uncover the time between a placed order and payment received. Ideally, OTC should operate on a shorter timeline. Less time means the onboarding process requires fewer wasted resources, such as overall effort, and businesses see a quicker profit.
Having operational experts review your OTC analytics can provide invaluable insights into how well departments manage processes. An expert can identify areas that need improvement and resources that need to be allocated. An outside perspective will clarify the next steps to optimize processes within your organization.
How Does Order-To-Cash Affect CSAT?
Tracking OTC provides valuable insight into the customer's journey from the initial order to the purchase. By understanding this journey, companies can identify opportunities to improve the customer experience and find areas where resources can be deployed more efficiently.
A Microsoft report found that when businesses ask for and accept customer feedback, 77% of customers have a more favorable view of that company. By seeking customer feedback, businesses build brand advocates and customer loyalty. Studies have shown that loyal customers are 5x more likely to repurchase.
Companies can better understand what works (and what doesn't) in terms of pricing strategies and sales tactics. This information can maximize efficiency and increase customer satisfaction.
Reviewing CSAT in the onboarding process is vital, as CX — in the early stages of the relationship — counts towards continued growth, customer retention, and brand reputation.
Customer Support
Customers believe service is more important than price. In a Forbes study, 58% of customers reported they would pay more for better customer service.
Offering excellent support will lead to more customer loyalty and word-of-mouth referrals. Customer support is also an opportunity to cross- and up-sell to current clients.
To elevate customer support with a CX-lense, here are the KPIs we recommend tracking:
Mean time to resolve (MTTR)
First call resolution (FCR)
Customer satisfaction score (CSAT)
To track MTTR, measure how quickly your customer service team responds to inquiries. A HubSpot study found that 90% of customers believe a response within 10 minutes to customer support issues is important.
The lower the MTTR, the better. A lower MTTR means your team responds quickly and handles problems efficiently. MTTR metrics are also good indicators of customer satisfaction.
FCR measures the number of times customers have to call support before their issue is resolved, starting with the initial contact. It’s essential to track this metric because it reflects both the quality of customer service you provide and how efficient your team is at solving problems for customers on the first try.
A high FCR rate indicates that customers don’t have to keep calling back since their issues are addressed quickly and accurately on their first contact with your customer service team.
Having an understanding of MTTR and FCR is vital when it comes to running a successful business. Not only do these metrics provide insights into how well your customer service team is performing, but they also help identify areas where you can make improvements to serve your customers better.
How MTTR and FCR Increase CSAT
When customers are satisfied with your support, it builds loyalty.
By properly utilizing these measurements, you can reduce customer response costs while increasing revenue through improved satisfaction rates and loyalty among current clients. A Bain & Company study found that when businesses increased their customer retention rates by just 5%, their profits increased by 25-95%. This percentage is too high for companies to ignore.
Customer Termination
Companies that handle customer termination efficiently and cost-effectively can prevent hundreds of thousands — if not millions — of dollars in lost revenue. Unfortunately, businesses often overlook customer termination, leading to additional costs when services continue long after customer offboarding. Far too often, we’ve seen clients experience wasted resources by not streamlining the termination process.
The KPIs we recommended tracking to create a streamlined customer termination are:
Cycle time
Reconcile cost incurred vs customer billed timeline
Tracking Services Post-Termination
The first step to avoiding unnecessary expenses related to customer termination is tracking the services you are providing post-termination. Take stock of any expenses related to the customer, including:
Services
Third-party vendors
Hardware
The next step is creating a system for customer termination. Automating the process is the best-case scenario and will help ensure that when customers end their contract, no services continue after they leave. This system should include a defined timeline for when customers should be disconnected and have built-in reminders so that nothing slips through the cracks.
For one client, Peak helped recover $1.5 million per year by updating their offboarding process.
Be Memorable in the Right Way
Psychologists have found that people tend to judge experiences on the peak and end moments. This is referred to as the peak-end rule. An entire interaction is remembered based purely on how it ended, so it’s crucial to finish a customer journey on a high note.
Correct customer offboarding is ending a customer relationship that is mutually beneficial for both parties. Happy former customers can lead to referrals, returning customers, and a good brand reputation.
It is advantageous to track customer satisfaction after the termination of a client so that you can better understand why they left and retain existing customers. By recognizing trends in customer dissatisfaction, you can take proactive steps to rectify issues before they lead to further departures.
Smooth and Stress-Free Offboarding
Proper customer offboarding offers many benefits for businesses large and small alike. Companies can reduce their churn rate and protect their reputations while increasing their chances for repeat business. Track your services post-termination, create your system for managing customer termination, and evaluate your processes regularly to eliminate wastefulness and save your business time and money.
KPIs to Increase Customer Service Operations
Businesses that track these CX KPIs — categorized by onboarding, customer service, and termination — will see more success overall. KPIs provide valuable insights into how businesses can increase and improve their operations, reduce wasted and draining resources, better retain customers and build brand loyalty.
We have seen millions of dollars in lost revenue recouped for our clients who tracked these KPIs and implemented changes. Tracking these KPIs is the best way to evaluate operational health.
Businesses can take the next step in improving their operational health by working with a team of operational experts.
A McKinsey and Company study showed 80% of companies that improved their organizational health saw success in their overall performance.
When you partner with Peak Process Group, you build stronger operational health. Our EX.A.C.T™ methodology will set your business up for success with both long- and short-term goals. Discover our approach and contact our experts today.
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