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!