As a business expands and order volumes grow, customer queries increase. Ensuring the queries are addressed promptly and accurately becomes crucial in fostering repeat sales. Key performance indicators for customer service teams — internal or external — are essential.
I’ve managed customer service for a large online grocer. This post addresses the primary operational metrics for a customer service function.
KPIs for Customer Service
Inquiry volume. The inquiry or ticket volume is the total number of incoming customer contacts, often segmented to the channel, such as phone, email, and live chat. Customer service software can label the types of inquiries — e.g., shipping problems, defective goods, warranties — to help correct broader issues.
Abandonment rate is the percentage of customers who leave an interaction before reaching a live advisor. It applies to phone calls and live chat. High abandonment rates indicate prolonged wait times, which can frustrate customers and lead to lost orders.
Average wait time measures how long a customer must hold to reach an advisor. For phone calls, the time is calculated from the first ring until a live advisor answers, including any time spent listening to automated messaging. Extended wait times often coincide with higher abandonment rates.
Implementing key performance indicators for customer service teams is essential for ongoing improvement.
First response time is similar to wait time but applies to channels such as email and social media where an instant reaction is not expected. On social media, the time starts with the customer posting the query and ends when the business responds, even if the query requests more information.
It is worth noting that online consumers increasingly expect quick resolutions. Here are acceptable wait times in 2023 according to Zendesk, the customer service software provider:
- Good: 12 hours or less
- Better: 4 hours or less
- Best: 1 hour or less
Social media
- Good: 2 hours or less
- Better: 1 hour or less
- Best: 15 minutes or less
Live chat
- Good: 1 hour or less
- Better: 5 minutes or less
- Best: 1 minute or less
Average handling time is the period spent answering a single inquiry, such as a call, web chat, or social media response. Long handling times can point to a need for additional advisor training or complex queries arising from insufficient website details. Conversely, exceptionally short handling times can raise concerns around response quality and should be viewed alongside the first contact resolution rate.
First contact resolution refers to the percentage of total inquiries resolved at the first point of contact within a specified period. A high FCR suggests customer issues were fully resolved. A low FCR can indicate problems with response quality or that advisors are handling complex cases.
Time to resolution tracks cases from start to finish, accounting for investigations and follow-ups. Time to resolution addresses queries that require dialog beyond the first point of contact.
Escalation rate is the percentage of queries referred to a manager or senior staff. Escalations should be infrequent. A surge in escalations suggests a broader issue, such as a product fault or poor frontline response.
