Unlocking success: Customer service metrics you should track

Customer service metrics serve as a compass that guides businesses of all sizes toward success. They are able to indicate the weaknesses and strengths of your strategy, as well as provide valuable insights into areas that could benefit from some tweaks or greater investments.

Here you’ll find the reasons why it is important to measure key performance metrics for customer service and step-by-step tips and practical examples.

Why should you measure key performance metrics for customer service?

1. Improve customer satisfaction

The first reason to monitor customer service metrics closely is to identify what satisfies your audience. In fact, our 2024 Customer Service Trends Report indicates a constant rise in customer expectations, with 68% of support teams acknowledging the influence of AI on key metrics such as response times.¹

Measuring these performance indicators allows organizations to adapt to evolving customer needs, optimize service processes, and enhance overall satisfaction. By staying attuned to customer-centric metrics, companies can proactively address issues, streamline operations, and deliver a more responsive and tailored customer experience, which will foster loyalty and positive relationships.

Do you want to learn how to implement a service culture across departments that paves the way for success? Check out these incredible tips from Jo Causon, CEO of the Institute of Customer Service.

2. Identify areas for improvement

Klaus’ 2023 Customer Service Quality Benchmark reveals that 30% of customer service professionals find measuring and enhancing support quality challenging.² However, this is an effort worth making. By analyzing customer service metrics, businesses can identify pain points in their processes. This data-driven approach enables targeted improvements to specific challenges.

3. Optimize resource allocation

Have you ever caught yourself thinking that you could have used your time, money, or workforce more intelligently if you were clear about which activities needed this or that most? Well, keeping an eye on customer service metrics might help you with that. When you have clarity about where your invaluable resources are going, you can make informed decisions to boost your efforts, completely change your game plan or adjust the route.

4. Meet SLAs

Service level agreement (SLA) is the “my word is my bond” commitment for business. It states what your customers can expect from you regarding your product or service offerings, including how much time you can take to reply to their queries, ship their orders etc.

By monitoring customer service performance metrics, you realize if you’re meeting those expectations or simply falling short. Either way, you’ll know where you are heading to – and if you want to keep going in that direction.

Need to improve your SLA numbers? Switch to an automated ticketing system and say goodbye to manual processes.

Customer service metrics you should track

1. First Response Time (FRT)

First Response Time (FRT) is one of the most important customer service metrics, as it assesses how quickly a support rep responds to a customer inquiry. The goal? To keep this duration as short as possible.

• What it's good for: Indicating how promptly and efficiently customer concerns are dealt with, which impacts their overall satisfaction and experience.

• Formula: FRT = Total first response time for all tickets received ÷ Total number of interactions

• Example: If a support team receives 100 queries and the total time taken to respond to all of them is 500 minutes, the FRT would be calculated as 500 minutes ÷ 100 interactions, resulting in an average response time of 5 minutes per query.

2. First Contact Resolution (FCR)

First Contact Resolution Rate (FCR) measures the percentage of customer queries resolved in the initial interaction, be it a call, email, text, or chat with your support team.

• What it's good for: Finding out if your support reps adeptly address customer concerns, swiftly resolving their issues with efficiency and effectiveness.

• Formula: FCR (%) = Number of issues resolved in the first contact ÷ Total number of issues x 100

• Example: Suppose a customer support team resolves 80 issues during the initial contact out of a total of 100 issues. The FCR percentage would be calculated as (80 ÷ 100) x 100, yielding an FCR rate of 80%, indicating effective resolution in the first interaction.

3. Average Resolution Time (ART)

Average Resolution Time (ART) is one of the key performance metrics for customer service utilized to figure out the average time a support rep devotes to handling a customer interaction.

• What it's good for: Revealing how efficient your support team is in receiving, replying, and successfully responding to customer queries.

• Formula: ART = Total handle time for all tickets solved ÷ Total number of interactions

• Example: Imagine a customer support team that spends a total of 600 minutes resolving 30 tickets. The ART would be calculated as 600 minutes ÷ 30 interactions, resulting in an average resolution time of 20 minutes per ticket.

4. Customer Satisfaction (CSAT)

The Customer Satisfaction Score (CSAT) is a metric crafted to gauge customers' happiness with a product, service, or experience. Typically assessed through standardized surveys, customers rate satisfaction on a scale (usually 1 to 5, where 1 stands for very unsatisfied and 5 for very satisfied), and the CSAT formula calculates the percentage of positive responses (ratings of 4 or 5).

• What it's good for: Pinpointing strengths and areas for improvement based on direct customer feedback.

• Formula: CSAT (%) = Number of satisfied customers (those rating you 4 or 5) ÷ Total number of responses x 100

• Example: If 80 customers rate their satisfaction as 4 or 5, out of a total of 100 responses, the CSAT percentage would be (80 ÷ 100) x 100, resulting in an 80% CSAT. This reflects the proportion of satisfied customers and aids businesses in understanding their overall customer sentiment.

5. Net Promoter Score (NPS)

The Net Promoter Score (NPS) stands out as one of the key customer service metrics, signaling how likely existing customers are to recommend your products and services to friends or family.

By evaluating received feedback, you can categorize customers into three groups on a scale from 1 to 10. For example, individuals rating 0 – 5 may fall into the detractors category. Those selecting 6 – 8 could be labeled as passives, while respondents opting for 9 or 10 can be identified as promoters.

• What it's good for: Providing relevant insights into the success of your customer engagement strategy.

• Formula: NPS = % promoters - % detractors

• Example: If 40% of customers are promoters and 20% are detractors, the NPS would be calculated as 40 - 20, resulting in an NPS of 20. This indicates a positive overall sentiment, with a higher percentage of customers likely to recommend the product or service.

6. Open tickets

When it comes to customer service metrics, open tickets reveal how many unresolved issues or requests are currently active and awaiting resolution.

• What they're good for: Evaluating the workload balance of a support team and the representatives’ efficiency in handling a certain amount of requests.

• Formula: Open tickets = number of unresolved tickets

• Example: If a ticketing system has 50 unresolved issues at the end of a business day, the count of open tickets is simply 50. That’s it, no tricks involved. This key performance metric for customer service reflects the number of ongoing issues requiring attention, helping the support team assess their workload and prioritize resolutions.

If you don’t want any requests falling through the cracks and speed up the resolution process instead, check out this article: How ticketing systems are evolving for next-gen support.

7. Customer Effort Score (CES)

A Customer Effort Score (CES) gauges how challenging it is for individuals to meet their needs, whether it's getting a support rep's answer or completing a task like tracking their orders. This metric is crucial because the ease of interactions significantly influences overall customer satisfaction. Smoother, more effortless communications generally lead to happier customers.

CES is typically measured by asking customers to respond to a statement such as "The company made it easy for me to handle my issue" on a scale, often ranging from "strongly disagree" to "strongly agree."

• What it's good for: Assessing the ease of customer interactions with your company.

• Formula: The specific formula for CES is not standardized like some other metrics. The score is often calculated by determining the percentage of respondents who gave a favorable response (e.g., "Agree" or "Strongly Agree"). For example, CES (%) = (Total number of responses ÷ Number of favorable responses) × 100.

• Example: If 200 customers respond to a Customer Effort Score (CES) survey, and 150 of them express that the company made it easy for them, the CES percentage would be (200 ÷ 150) × 100, resulting in a CES of 75%. This indicates a high level of customer satisfaction with the ease of interactions.

Are there specific SaaS customer service metrics?

The short answer is yes, there are specific SaaS customer service metrics you can monitor. As software as a service companies have specific characteristics that differentiate them from other business models – recurring revenue through subscription-based pricing, for instance – some KPIs might be more suitable to evaluate its performance. Let’s take a look at them.

1. Customer onboarding completion rate

As the name suggests, customer onboarding completion rate refers to the percentage of new users who have successfully finished the welcoming process for a product or service. This process typically involves a series of steps designed to help customers get started, understand the product, and realize its value.

Formula

Onboarding Completion Rate (%) = (Number of customers successfully onboarded ÷ Total number of new customers) x 100

How to interpret the results

A higher completion rate indicates that a greater proportion of new customers are successfully transitioning from sign-up to effective use of the product or service, while a lower number suggests otherwise.

Looking for more in-depth info about SaaS customer service metrics? This article might inspire you: 5 customer success metrics for SaaS that you must track.

2. Feature adoption rate

Feature adoption rate measures the percentage of users who have embraced and are actively using a particular resource within a product or service. It helps businesses understand the level of acceptance and utilization of specific functionalities.

Formula

Feature Adoption Rate (%) = (Number of customers using the feature ÷ Total number of new customers) x 100

How to interpret the results

A high feature adoption rate indicates that a significant portion of the user base is actively engaging with the specified functionality. This is often a positive sign, suggesting that the feature is valuable and well-received.

On the other hand, a low feature adoption rate may signal that the resource in question isn’t resonating with users, or there could be barriers to adoption such as lack of awareness, usability issues, or insufficient promotion.

3. Churn rate

Also known as customer attrition rate, this is a metric that measures the percentage of customers who stop using a product or service over a specified period. It reflects the rate at which customers discontinue their subscriptions or cease their relationship with a business.

Formula

Churn Rate (%) = (Number of customers lost during a period ÷ Total number of customers at the beginning of the period) x 100

How to interpret the results

A high churn rate is generally a cause for concern as it indicates a significant loss of customers. This could be due to various reasons, such as dissatisfaction with the product, better offers from competitors, or changes in customer needs.

A low churn rate is favorable, suggesting that a business is retaining a higher percentage of its customer base. This is often an indication of customer satisfaction, loyalty, and the perceived value of the product or service.

It’s also important to point out that churn rates may fluctuate based on seasons, promotions, or other external factors. For example, summer vacations, Black Friday discounts or a successful influencer ad on Instagram. Understanding these variations is crucial for distinguishing between temporary fluctuations and sustained trends.

4. Customer lifetime value (CLTV)

CLTV is a metric that estimates the total revenue a business can expect to earn from a customer throughout their entire relationship. It helps companies understand the long-term value of acquiring and retaining their shoppers base.

Formula

CLTV = average revenue per user × customer lifespan

How to interpret the results

A high CLTV indicates that, on average, customers are providing substantial value over the duration of their relationship with the business. This is usually great news, because it suggests that the company has effective customer retention, upselling, and cross-selling strategies.

However, a low CLTV may indicate that the business is struggling to retain customers or that the average revenue generated per person is insufficient to cover acquisition and retention costs. It could prompt a reevaluation of customer engagement and retention efforts.

5. Monthly Recurring Revenue (MRR)

MRR is one of the most interesting SaaS customer service metrics. Designed for subscription-based businesses, it represents the predictable and recurring revenue generated from subscription fees on a monthly basis. It provides insights into the financial health and stability of a business with recurring revenue models.

Formula

MRR = sum of monthly subscription fees

How to interpret the results

A consistent or growing MRR indicates that a business is acquiring new customers, retaining existing ones, or successfully upselling/cross-selling additional services. Good for you!

Losing customers or having customers downgrade their subscriptions can lead to a decline in MRR. With a comprehensive service platform, you can divide your audience in segments and analyze which groups contribute the most or the least to your recurring revenue. This information is useful for targeted marketing and service improvements.

6. Product uptime and reliability

Product uptime and reliability measure the availability and dependability of a software product or service. Uptime refers to the period during which a system is operational and available for users, while reliability assesses the consistency of the product in delivering its intended functionality without unexpected failures.

Formula

Uptime percentage (%) = (total uptime ÷ total time) x 100

Reliability = number of successful operations ÷ total number of operations

How to interpret the results

A high uptime percentage (close to 100%) indicates that the product is available for users most of the time. This is great, because it helps maintain user satisfaction and trust.

Nevertheless, low uptime percentages can have negative consequences, leading to user frustration, loss of business, and damage to the brand reputation. A reliability close to 1 (or 100%) indicates a system with consistent performance, while values closer to 0 suggest a higher likelihood of failures or unexpected issues.

Keep track of your customer service metrics with Intercom

That’s a wrap! Knowing how to measure customer service metrics it’s great but having a powerful tool that does it automatically for you is even better. This way you can say farewell to dull, repetitive tasks, saving your team’s limited time and energy.

Our complete platform gives you a 360° view of your customers. In fact, we make it easy to integrate customer data from your entire tech stack, so your team can always access a customer’s most recent history.

To help you grow with data-driven customer experiences, our software allows you to:

• Leverage company, conversation, behavioral, and custom data for targeted customer segment prioritization.

• Stay informed with real-time updates on support operations, including current volume, team capacity, and KPIs.

• Effortlessly import, manage, and segment your data.

• Easily export to your data warehouse for analysis.

• Gain insights into customer conversations with an ML-generated report highlighting common topics.

Ready to go beyond key performance metrics for customer service and get data that makes the difference? Start your free trial.

Sources

1 Intercom. Customer Service Trends Report 2024. We asked 2,000+ customer service professionals across the globe how they’re meeting the challenges and opportunities of 2024.

2 Klaus. Customer Service Quality Benchmark. Based on data from 4k support professionals over 98 countries plus 2 million conversations.