9 customer success metrics all businesses should measure
Updated: Nov 15, 2020
One of the most important aspects of a customer support leader’s role is to retain customers through consistent, valuable experiences. It’s essential they grasp how effective their customer support organization is, while identifying areas they can strengthen and improve. In order to provide an optimal customer experience, leaders need to evaluate team and agent performance, assess whether the team is meeting customers’ needs, and track the organization’s success.
To develop a thorough understanding of the organization, support leaders can use customer service metrics or key performance indicators (KPIs) to understand an aspect (X) of their business. In many cases, aspect X needs improvement or should remain at a certain standard.
We delved into 9 customer success KPIs that help leaders and businesses develop a clear strategy for optimizing the customer journey and provide the best possible support. The below metrics are grouped into three categories: customer experience, agent performance, business metrics, and one bonus approach to measuring team performance.
Here are the customer service metrics all businesses should measure:
1. Customer Satisfaction (CSAT)
What it is: A survey measuring a customer’s feeling about your products or service.
During crucial points in the customer journey such as; onboarding, moment of purchase, and interactions with support agents, businesses can survey customers to gauge how they feel about the product or service they received.
Questions could be as simple as asking customers to choose a sad, happy, or indifferent face. Depending on your business’ needs, CSAT surveys can take a variety of shapes. For instance, companies can opt for questionnaires that ask customers to rate their experience with your team on a scale of 1-5 (one being very unsatisfied and 5 very satisfied).
How to calculate CSAT: After setting up your survey, add the sum of all the scores and divide the total by the number of participants.
Why CSAT metrics matter to support organizations: When success leaders know how customers feel towards their products or services, they can identify areas of improvement or pain points before they become actual problems for customers. Mitigating or even preventing issues improves the customer experience, keeps customers happy, and increases the chances of them returning.
Timing is crucial here; you want to measure how a customer feels about a specific experience or product, not their thoughts on your company as a whole.
2. Net promoter Score
What it is: Net promoter score (NPS) asks customers whether or not they would recommend your business to someone else. NPS is a simple question: “On a scale from 1-10, how likely are you to recommend to a friend?”
Responses fall into three categories:
Promoters: Customers who answer with 9-10
Passives: participants who respond with 7-8
Detractors: Customers who answer with 0-6
How to calculate NPS: subtract the percentage of detractors from the percentage of promoters.
For example: 200 customers take an NPS survey. If 100 of them are promoters (50% of responders), 80 are passives (leave these aside), and 20 are detractors (10% of responders), you’d have an NPS score of 40:
50% - 10% = 40%
Why NPS matters to support organizations: though connected to CSAT, the main difference and benefit NPS provides is that it assesses customer loyalty, how happy they are with you, and an estimate of the value they’ll provide your company in the future. Customers who rank high on the scale (promoters) have an average lifetime value (LTV) that’s three to eight times higher than those on the low end of the scale. Typically, promoters are more loyal, spend more, and are more likely to recommend your business to other people.
When asking customers to rank their experience on a numeric scale and provide an explanation for their response, brands can use their feedback to gain insight into the customer experience and then find areas of improvement.
NPS scores can also indicate company growth; on average, brands with their industry’s highest NPS scores outgrow their competitors by a factor greater than two times.
3. Average Ticket Severity (ATS)
What it is: ATS helps support organizations understand how different incidents directly impact support.
How to calculate: Assign each ticket a ticket severity level ( ex. 1= minor, 2= normal, 3= high, 4=urgent). Add up the number of tickets from each level and divide that figure by the total amount of tickets.
Why it matters to support organizations: If customer support leaders see there’s a higher number of urgent or high tickets, it may signal that there’s room for improvement within the customer experience, product or service.
Additionally, ATS can be an especially helpful tool for agents needing to prioritize their daily workflows.
4. Average handle time (AHT)
What it is: A customer service KPI that tracks how long an interaction takes whether it’s by call, email, or chat. For calls, AHT includes the second the customer calls support to when that customer hangs up. This also includes any talk or hold time, as well as any follow up work after the call.
How to calculate AHT: To get AHT, use the following formula:
Talk time + total hold time + total wrap time) / number of total calls
Here’s an example scenario: If talk time was 20 minutes, total hold time was 2 minutes, total wrap time was 10 minutes, and number of calls equaled 2, it would look like this:
20 + 2 + 10 / 2 = 16 AHT
*Note that for chats, you would calculate AHT by adding up the total amount of chats and follow up time and divide that figure by the number of chats. For email, add the total amount of time spent on each ticket and divide it by the total amount of tickets.
Why AHT matters to support organizations: AHT directly relates to CSAT. Finding that balance between efficiency and thoroughness can help provide the best customer experience.
In short, users want fast and quality service; rushing through a call might lower your AHT, but customers won’t feel satisfied. Leaving customers on hold or asking them to repeatedly explain their issue will increase AHT and leave them feeling frustrated.
Measuring AHT helps support leaders discover the best approach to delivering clear, quick replies and meet customers’ needs. A lower AHT and high CSAT score can indicate team productivity; agents are solving tickets at a faster rate and without sacrificing customer needs.
5. Total Time to Resolution (TTR)
What it is: A customer support metric that measures the average amount of time it takes a support organization to resolve an issue, case, or ticket after it’s been opened.
Before calculating TTR, consider aspects that affect customers’ expectations such as:
Their past service experiences with you versus other businesses
How difficult they think their question is
Any Service Level Agreements in place for the customer
How to calculate: Simply divide the total time by the total number of actions over a given period of time.
Why TTR matters to support organizations: A fast, accurate answer correlates to higher loyalty and CSAT rates. Customers with ugent or difficult questions receiving efficient answers within hours are happier than those who receive the same response days or weeks later.
TTR can indicate team and agent efficiency, but be wary of agents who rush resolutions or sacrifice accuracy to close tickets, as they’ll damage CSAT.
6. First Contact Resolution Rate (FCR)
What it is: Resolving a customer’s issue in the first interaction, eliminating the need for them to contact you again to address the issue.
For phone support, that means resolving the pain point in one call
For email and social media, it’s resolving the issue in one response
For chat, it means resolving the issue in one chat session
How to calculate: Take the number of support issues resolved on first contact and divide that figure by the total number of support issues.
Why FCR matters to support organizations: Customers want their issues resolved with as little friction as possible. This means quick resolutions so they can continue successfully using your product.
When customers must wait extended periods of time for an agent to get back to them to resolve their issue, it makes for a less positive customer experience, decreasing CSAT and risking the customer relationship.
Conversely, when brands can solve issues with a single interaction and customers don’t need to follow up, you’ve made their lives easier. Happier customers who get issues resolved fast may also recommend your business to others, which increases your NPS.
Overall, FCR indicates how well your support organization serves your customers, whether it’s running effectively, and if agents are meeting service level agreements (SLAs).
7. Ticket Backlog
What it is: The amount of requests left unresolved by the customer success team during a specific time period.
How to calculate: First, businesses must set an ideal timeframe for resolving tickets. Not all companies will have the same timeframe, but it’s important to set a goal before measuring ticket backlog.
Whether you choose a certain number of hours or days, tally up the open unresolved tickets accumulated during the chosen timeframe.
Why this metric matters to customer support: Ticket backlog can have a direct effect on CSAT; In general, the longer customers must wait for a resolution, the less satisfied they’ll be. Ticket backlog can also indicate team success. If tickets are consistently piling up, leaders may decide to add another agent to the team or restructure the support organization for maximum efficiency.
8. Customer churn
What it is: The percentage of customers who leave your business.
A few examples of churn:
Customers who don’t renew their purchase
Cancel a subscription
Closed their account with you
To calculate churn: Though there are several ways to calculate churn, below is one of the simplest methods:
1. Determine the time frame you want to measure (this could be a month, quarter, year, etc.)
2. Calculate the number of existing customers you had and those who churned during this time frame
3. Divide the number of churned customers by the number of existing customers to discover your churn rate
Tip: remember not to factor in any new customers you acquired during this time. Instead, you can include this number when measuring churn for the next month or quarter.
Why churn matters to support organizations: Customer support is all about developing strong relationships with customers, so low churn rates can indicate great customer service and happy customers.
Measuring churn can also show how well agents are performing as well as highlight any revenue losses, allowing businesses to assess their customer success strategies and pivot if necessary.
9. Customer retention costs (CRC)
What it is: A metric that indicates how much money a company spends on technical support for customers, the resources used to maintain customer loyalty and keep users happy, the total cost of your customer success operation, and how much money per customer brands spend to retain them.
How to calculate: Add up any expenses from your customer success operations. This could mean team salaries, engagement and adoption programs, professional training and services, and marketing. Then, divide the total amount by the total number of customers for the average customer retention cost.
Total retention costs / total number of customers = average customer retention cost
For example: If a company’s total retention costs = $1 million and they retained 10,000 customers, they spent an average of $100 per customer:
(1,000,000 / 10,000 = $100 spent per customer)
Why CRC matters to support organizations: CRC allows businesses to understand the resources involved to retain customers and helps them prove their success efforts are cost-effective.
Brands can use CRC to justify investing more resources into your customer success team and make smarter investments by comparing the cost of retaining customers with the potential revenue gains from a new service or feature.
Bonus approach for tracking customer success effectiveness:
Team Performance Insights
What it is: A way to determine agent efficiency and improve your organization’s productivity as a whole.
To calculate: Though there’s no one way to calculate team performance, companies can use a combination of calculations such as: customer satisfaction, first contact resolution rate, qualitative feedback and more.
Many modern-day customer support solutions offer a shortcut in the form of built-in insights which provide these metrics out of the box, so brands can easily draw insights and evaluate team performance.
Why team performance matters to support organizations: Using this approach, businesses can see which agents, groups, or locations perform the best and what they’re doing to succeed. This will show your team where they can improve and whether or not they’re meeting their goals.
Not only is this great for team morale, but it also helps your support organization stay on track of business goals and work towards providing greater customer satisfaction. The right insights help success managers identify potential issues early on and make adjustments as needed.
Track your customer service to provide the best possible support
The happier your customers, the stronger your customer experience and by extension, the better your customer support. When support is able to provide quick, thorough resolutions and meet customers needs,’ satisfaction levels rise from both sides.
Use the above metrics and KPIs to help agents stay on track of team goals, strengthen the support organization’s performance, and align agents around your company’s strategic initiatives.