The Key Indicators: KPIs
Every company aims to become successful, but how do you measure success? This is where Key Performance Indicators (KPI) come in. KPI is a measurable metric that shows how well or how poorly your team is doing. Having a set of KPIs allow you to see if your team’s performance is aligned to your company goals and vision.
Ideally, your KPIs should be based on your company’s vision, goals, strategy, and objectives. You will also need to derive your KPI from the Critical Success Factors of your company. CSFs (Critical Success Factors) are areas in your company that your team must perform well in order to succeed. You will use KPI to measure CSF. Once you have a KPI, you must take action for it to be met.
When we talk about KPIs, there are several that you can choose from. Ideally, it is best to keep between 4-10 KPIs to measure your team’s performance. It is also nice to remember that each company will have different KPIs, and even within your organization, each department will also be using different KPIs to measure their success.
When you set KPIs for your teams to follow, we must remember that they should be SMART.
Specific - be specific and clear about the KPI and why that is important
Measurable - the KPI must be measurable to a defined standard
Achievable - the KPI must be attainable and real
Relevant - the KPI must measure something that would help the company become successful
Time-Bound - the KPI should be achievable within a time frame
As mentioned above, each company and department in a team has different KPIs they can use to monitor their performance. For customer service teams, you can see below some important SMART KPIs to use.
Quality metrics allow you to see how well your team is taking care of your customers. This will ensure that their conversations and interactions are of good quality. The agents are treating customers with respect, there is empathy, the solution provided was accurate to what the issue is. To ensure quality, we typically recommend using two specific KPIs:
CSAT measures how happy and satisfied the customers are with your product, service, and assistance. This is typically measured by surveys that customers fill out after an interaction with the customer service team. Be aware that there are often a large number of issues that come up in customer surveys that do not reflect directly on the quality of the customer service team, but rather shipping, product quality, or some other part of the business outside of the customer service department. While it’s important to hear what your customers are saying, it’s also important to not use this metric as the sole KPI for assessing the quality of the work your team is doing.
QA/Audits are essential to ensuring quality work is being done consistently. While checking every piece of work is generally not economically feasible, checking a subset of customer interactions and grading them based on a rubric is really helpful to determine potential areas of improvement for the team or individual agents.
Response Time measures how long your customers are waiting to engage with your team via chat, email, or phone. If customers are getting assistance and resolution in a timely manner, they will be happy and satisfied. Keep in mind that high response time could reflect low productivity by your team, but it could also be indicative of a staffing issue! It’s important to dig into the causes of a failing KPI in order to determine the best course of action for improvement.
First Contact Resolution shows the frequency with which your customer’s concern is resolved on the first contact. This can vary pretty dramatically depending on the business, but a low percentage of contacts resolved in a single interaction typically indicates you need to improve your processes to facilitate a more streamlined experience for your customers. Also, seeing this metric decrease through time may indicate a new problem that customers are experiencing that you had not previously considered.
Retention is a relevant metric to track if you are a subscription or membership based company. It is almost always easier and cost efficient to keep and maintain your existing customers than to acquire new ones. They also help your business by providing referrals and good feedback that can help your business to improve. It’s very important to have strategies in place for your customer service team to help resolve issues your customers are having or provide one-off offers to nudge customers to stay with you. We often target this KPI when developing our incentive programs for our team!
Attrition is similar to customer retention, but instead focuses on the turnover within your own team. Just like customers, it is more expensive to hire and train new people than to keep your current team happy and motivated. If you have a high turnover rate, this indicates more work is needed to understand the problems that your team is facing and having clear milestones to address them.
As we work with new clients, we work through determining appropriate KPIs to strive for and processes to measure progress in an efficient way. We’re always happy to chat through your current setup and determine ways to improve!
How to Know When to Outsource
A question I often get when I’m chatting with e-commerce founders is if now is the right time to start thinking about working with an outside partner to help their customer service team. Early on, founders often get the advice to do customer service themselves- “Be in there talking with your customers and hearing what they have to say!” While this is good advice when you are getting 10 emails each day, it starts to make a lot less sense when you’re getting 100 or even 1,000 emails with phone calls and live chats coming in at the same time. So how do you know when you should get some help? Let’s break it down by what stage your company is at.
Pre-launch
For a pre-launch company, working with a customer service partner really depends on what your starting point is. Are you bootstrapping and trying to build up your business through word of mouth and guerrilla marketing? You should probably start out handling your own customer service and only start thinking about outsourced help as you grow. Have you raised a seed round and plan to do a big marketing campaign right away? Do you have someone on your team that has experience in Customer Service? If not, you can very easily get overwhelmed with customer requests and miss out on providing high quality customer service to your early adopters. If you’re in this situation, it would be a good use of time to chat with a customer service partner on how to handle the expected volume and ensure every customer feels like they are treated well.
Less than $5mil in Revenue
Once your business has gotten off the ground, it starts to become a little easier to come up with a clear strategy for scaling customer service. After all, you have tons of actual customer interactions that you can use to develop a plan! Are most of the questions that you get pretty technical or complicated inquiries that require a really in depth knowledge of your product? It would probably make sense to keep handling those inquiries in house with product experts. But if there’s a good amount of questions that come in that are more transactional (returns/exchanges, where’s my order requests, subscription changes) then it's a great time to consider getting some outside help. We have a ton of experience getting these issues resolved for customers quickly and keeping customers happy so rather than trying to reinvent the wheel, this is a great time to connect and see if partnering makes sense.
Over $5mil in Revenue
At this point, it’s very likely that you are getting a number of repetitive questions or requests from customers that could be handled well by an outside team. If you’re at this larger scale, we can also develop more customized incentives like pay-per-ticket, quality bonuses, and retention incentives to align our team’s incentives with your bottom line.
How did you make the call on how to scale your customer service team? Need help sorting through the different options? I’d love to hear all about your journey and see how I can help!