Customer Service Metrics: Definition & Types

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  • 0:03 Customer Service &…
  • 1:23 Handle Time & Contact…
  • 2:46 Percent of Escalations…
  • 3:37 Service Level Agreement
  • 4:29 Churn Rate
  • 5:01 Lesson Summary
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Lesson Transcript
Instructor: Tammy Galloway

Tammy teaches business courses at the post-secondary and secondary level and has a master's of business administration in finance.

In this lesson, we'll define customer service metrics and provide suggestions on how to set appropriate goals. We'll also discuss when to gather customer satisfaction data.

Customer Service & Satisfaction

Mr. Baker is the Director of Customer Service for BXM, the #1 widget maker in the world. While BXM sells the most widgets out of all of their competitors, they have terrible customer service. Company executives fear if BXM does not change how they communicate with customers, they could lose their #1 spot. Mr. Baker was hired to turn things around at BXM as quickly as possible.

Customer service is defined as meeting customers' needs 110% before and after they purchase a product or service. While most companies have a similar customer service motto, how do they measure customer service to ensure excellent service?

Let's define customer service metrics common to call centers and explore service-level agreements to maximize customer satisfaction. Customer satisfaction tells us how happy customers are with our service or product. Companies measure customer satisfaction by a percentage, such as: We have an 80% customer satisfaction rating. Satisfaction of service should be measured after every customer contact, including email, phone call, and chat session. Questions on the survey should focus on handle time, first contact resolution, percent of escalated issues, backlog, and churn rate. Let's talk about each separately.

Handle Time & Contact Resolution

One of BXM's worst customer service metrics was handle time. Handle time simply means how long it takes to resolve a case. This time will vary depending on the type of product, service, and industry. For example, an auto dealership may have a longer handle time on repair issues than an internet service provider on connection problems. The handle time may also vary internally depending on the issue.

Mr. Baker asks the group, 'How many have called a customer service center and been transferred to several different departments? We know how frustrating that process can be. Guess what, folks, that's what our customers experience. We've comprised data on first contact resolution and ours is 20% company wide.'

First contact resolution means that customer issues are resolved the first time, during the initial conversation between a customer and the company representative. In the case of BXM, only 20% of the customers get their issues resolved on their first interaction with the company. One method of increasing the rate of first contact resolution is to develop flow diagrams addressing common issues or complaints.

Flow diagrams can provide customer service representatives with step-by-step guidance on how to handle certain situations, depending on how customers answer certain questions. This method empowers reps to satisfy the customer by settling issues expeditiously, when the situation meets a set of common conditions or criteria.

Percent of Escalations & Backlog

Unfortunately at BXM, not all issues can be resolved on the first contact due to the complexity of the widget, and some need to be escalated to a team who has more in-depth knowledge. Contact escalations are phone calls, chat sessions, or emails where the first representative cannot solve the customer's issue. We want to ensure these escalations are a very small percentage of the total; hence our first representative must be armed with the most current information on the top issues. If issues are escalated, the handle time within this department must be appropriate to minimize customer dissatisfaction.

Sometimes BXM's contact escalations team cannot resolve the issue and it moves into a backlog state. Backlogs are typically very difficult issues that require input from several different departments. In this instance, updating the customer with a resolution time frame or the steps in resolving the issue is very important.

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