21 Crucial Customer Service KPIs You Need to Track in 2024

Customer service is hard. Measuring the value of good customer service is even harder. However, only if you have quantifiable data on how well your support team is doing can you improve existing processes, make better staffing decisions, and ensure customer happiness.

The best way to get these insights is by measuring customer service key performance indicators or customer service KPIs.

In this article, we’ve covered everything you need to know about customer service key performance indicators.

What are customer service KPIs?

Customer service KPIs are quantifiable values that help support teams measure performance and progress against their goals.

Customer service KPIs help you analyze how you’re going in terms of your team, customers, and business goals and arrive at meaningful insights. For instance, by measuring the right customer service KPIs, you can answer important questions including:

– How well is my support team handling customer problems? – Are customers happy with the quality of service they’re getting? – What impact does good customer service have on my business?

How are customer service KPIs different from customer service metrics?

In essence, a KPI is a measurement that can point to how well a team is tracking toward its targets. A KPI is a metric, but it differs from a regular metric in the sense that it shows progress towards a key business goal. 

If a customer service metric doesn’t directly affect progress toward a business goal, it’s just a metric, not a KPI. For example, a business goal or objective might be to decrease customer churn. A KPI related to this goal could be measuring customer satisfaction following service interactions or the number of issues resolved in the first contact.

Why are customer service KPIs important?

Customer service key performance indicators (KPIs) are vital because they tell organizations how effective their customer service departments are. These metrics let businesses determine how well they meet their customer's needs and expectations, which is crucial for maintaining high customer loyalty and satisfaction. 

Tracking KPIs such as response time, resolution rate, and customer satisfaction scores allows organizations to pinpoint areas of excellence and identify where improvements are needed. This insight enables businesses to make calculated decisions about resource allocation, how training, and strategies to enhance the overall customer experience.

Customer service KPIs are instrumental in aligning the service department's goals with the company's broader objectives. They serve as a bridge between daily customer interactions and long-term business outcomes, helping to ensure that every customer engagement contributes to growth and profitability. 

A clear set of KPIs helps businesses stay ahead by continuously improving their service offerings. Ultimately, customer service KPIs help drive the service that creates loyal customers and differentiates a brand in a crowded marketplace.

With a clear understanding of what KPIs mean and why they’re important, let’s look at the critical KPIs for customer service.

What are the 21 most important KPIs for customer service?

In contact centers, KPIs are of three types. Each type contains a suite of metrics that evaluate the team’s performance, customer satisfaction, or the subsequent business impact. While there might be different types, you’ll notice that the metrics for each kind are closely intertwined and influence each other.

Here’s an in-depth analysis of the various types of customer service KPIs and a list of the essential support metrics to track under each category.

Team performance KPIs

As the name suggests, these KPIs give you deeper insights into your support team’s performance. Poor team performance can impact customer satisfaction and business goals, such as increasing customer retention and improving operation efficiency.

So you can use these metrics to increase accountability among your support agents, motivate them to perform better and evaluate the performance of new tools and processes introduced to up your customer support game.

Here are the critical customer service team performance metrics that fall under this category:

1. First response time

Definition: The time taken to reply to the customer for the first time after a ticket has been created.

The first response time has an overbearing impact on customer satisfaction, making it an important KPI for most businesses.

This metric is also a highlighter of your ticket assignment rules. Manually assigning tickets can take a lot of time and effort, and asking agents to take up tickets can lead to cherry-picking. So, you must opt for an efficient alternative system such as automatic ticket assignment.

In addition, you can get insights about agent brandwidth by looking at this metric against the total number of tickets (more on this later). If you have a high number of tickets resolved per month and a high first response time, then you need to work on easing agent bandwidth.

2. Average handle time (AHT)

Definition: The average time an agent takes to handle a customer’s issue from the beginning of the customer conversation to the last activity that is performed and until the case is closed.

Businesses work on improving this metric to increase customer satisfaction scores, boost team efficiency, and reduce support costs. The lower the metric, the more efficient a contact center operates.

Here are a few benchmark AHTs across different industries:

A high average handle time can be traced back to poor product knowledge and inefficiencies in internal processes, and can go up to more significant business decisions such as investing in the wrong support tools.

3. Resolution SLA

Definition: The percentage of tickets resolved before the specified SLA.

Today’s customers prefer getting quality, personalized, and seamless customer service, even if they must wait a bit. However, it’s important to ensure the resolution time is consistent and not unacceptably long. Here’s where the resolution SLA comes into play as an important KPI since it helps ensure all tickets are resolved within a set time.

Every 10% drop in the resolution SLA lowered CSAT by a whole percentage point.1

The fix to a poor resolution SLA lies in equipping agents with better training and resources to handle complex customer issues. As a last resort, you can revisit your SLA strategy and ensure the deadlines are achievable.

4. First contact resolution

Definition: The percentage of tickets resolved within the first support interaction.

Nothing makes customers happier than finding the right solution in the very first customer support interaction. 

In fact, every 1% increase in first call resolution sees a 1% rise in CSAT score. Low-effort resolutions also drive loyalty and customer retention, with 61% of customers who’ve had their problems resolved with less effort choosing to stay with the company. It goes without saying that this metric is a vital KPI for businesses focused on keeping customers happy.

Improving training, quality of support, and revising customer service policies can help improve FCR.

5. Number of resolved tickets/month

Definition: Total number of tickets resolved every month.

Ensuring this metric does not see a sporadic trend is important since every 100 extra monthly tickets per agent (or 20 additional weekly tickets) can lead to a 1% drop in CSAT scores.4

The number of tickets resolved per month also verifies an agent’s productivity if you follow a system where certain types of tickets are assigned to a particular agent. For instance, how-to tickets are mapped to Agent 1, tech support tickets to Agent 2, etc.

However, if that’s not the case, then it’s important not to associate the number of tickets resolved per month directly with the agent’s capability since each ticket can be of varying difficulty.

Instead, you can club this metric with other metrics like resolution SLA or average handle time to understand the capacity of work an agent can handle without compromising on quality or speed.

Customer satisfaction KPIs

Customer satisfaction measures how pleased your customers are with the quality of service provided. Businesses use A common method to determine this by sending surveys to customers after every support interaction. By analyzing the responses on the surveys and gathering feedback, you can spot what’s working and what needs to be improved to provide better service experiences.

The most popular customer satisfaction KPIs are as follows:

6. Customer satisfaction score (CSAT)

Definition: The percentage of customers who responded positively to the satisfaction survey sent to them.

Most businesses focus on improving their CSAT survey scores since it’s an important indicator of the customer experience. A 10% increase in a company’s CSAT score can lead to a 12% increase in customer trust.

While improving customer satisfaction requires a lot of moving parts, the ones in your control are employee behavior and knowledge, as well as the quality and speed of service. And like we’ve seen before, speed of service largely affects customer satisfaction.

So if your CSAT score is low, then going back to improving your response and resolution times might be worthwhile. Boosting employee behavior and knowledge and decreasing wait times can be done through consistent training and improving agent enablement.

7. Net promoter score (NPS)

Definition: A 10-point scale that measures your customer’s willingness to recommend your product or service to others.

Businesses across the world, including the likes of Amazon and Apple, measure net promoter score (NPS) as their KPI since it’s an indicator of a customer’s loyalty towards a brand.

Customers answer this question in retrospect of their entire experience with your brand. So, the customer service department needs to focus on keeping the other KPIs in check, and creating consistent and effortless customer service experiences can help improve your NPS.

8. Customer effort score (CES)

Definition: The rating given by customers from 1-10 is based on the difficulty of an experience.

CES is an important metric that businesses track to ensure they deliver a seamless experience to customers.

The solution to improving your CES can range from being more accessible on different channels, offering intuitive self-service options, providing multilingual support, and improving agent training.

Business-level KPIs

Business-level KPIs tell you how customer service impacts the overall health of your business. You can use them to make strategic decisions that will improve the quality of service and impact revenue positively.  

For example, consider a business metric like customer churn rate, which measures how many customers you have lost over a period of time. If you identify customer service as one of the reasons for high churn, you will need to make significant changes to your support setup. You may have to hire new managers with a diverse skill set, invest in a full-fledged help desk system, and set better long-term goals.

Here are some business-level KPIs concerning customer service:

9. Customer retention rate

Definition: The percentage of customers you retain over a period relative to the number of customers you start with at the beginning of the period.

Customer retention can boost your revenue by increasing the lifetime value of your customers. A mere 5% increase in customer retention can boost your revenue by 25-95%. Additionally, your chance of selling to an existing customer is between 60–70%, compared to 5–20% for a new customer.

While product quality is a variable that significantly impacts this metric, customer support plays a major role in fostering customer relationships and ensuring that customer issues are addressed before they escalate. Focussing on offering tailored solutions on time can help with improving customer retention.

10. Customer churn rate

Definition: The percentage of customers you’ve lost or retained over a specific time period.

Reducing customer churn is a crucial aspect of business success that requires constant customer engagement to understand and address customers’ issues with your brand and product. It goes without saying that the onus of doing that lies with the customer support team.

11. Customer lifetime value (CLV)

Definition: The repeat purchase rate of customers over their lifetime with your brand.

This metric is tied to a business’s revenue goals since it helps get insights about revenue potential and planning for the longevity of a business.

It works like this: The longer a customer stays with your business, the more revenue your business will generate, and you can also spend less money on getting new customers by focusing on your existing ones.

As discussed before, customer service plays an important role in strengthening customer relationships, making this an important KPI for support teams.

With the CLV, we commence the list of important customer service KPIs. You might be wondering if you should measure all the metrics listed here. Well, no.

The key to effectively measuring customer service performance is not to measure all industry-recognized metrics. You need to track a set of customer service KPIs that align with your business goals and team objectives. Here’s how you can do that.

12. Occupancy

Definition: Occupancy refers to the proportion of time that agents spend on active customer interactions compared to idle time. It measures efficiency and workload management within a customer service team.

This KPI is crucial for optimizing workforce management and ensuring agents are adequately funded and utilized. Higher occupancy rates indicate a well-balanced workflow, contributing to operational efficiency and agent satisfaction.

13. Tickets Handled per Hour

Definition: This metric quantifies the average number of customer support tickets an agent resolves within an hour. It's a direct measure of productivity and operational efficiency in handling customer inquiries.

Monitoring tickets handled per hour helps in assessing the effectiveness of training programs, tools, and processes in place, guiding efforts to streamline operations and improve customer service response times.

14. Employee Satisfaction

Definition: Employee satisfaction measures how happy, motivated, and content employees are within their roles and the company environment. It impacts morale, retention, and overall performance.

High employee satisfaction correlates with improved customer service, as engaged employees are more likely to go the extra mile in solving customer problems, leading to better customer experiences.

15. Abandon Rate

Definition: The abandon rate is the percentage of customer interactions (calls, chats, etc.) that the customer terminates before connecting with an agent. It's an indicator of service accessibility and efficiency.

A lower abandon rate suggests that customers are quickly and efficiently connected to help. In contrast, a higher rate may indicate issues with wait times or the contact process, signalling areas for improvement.

16. Cost per Resolution

Definition: This metric calculates the average expense of resolving a customer support ticket, including all direct and indirect costs. It's vital for understanding the financial efficiency of customer service operations.

Keeping the cost per resolution in check while maintaining high-quality support is critical to maximizing the return on investment in customer service and ensuring sustainable business operations.

17. Ticket Reopens

Definition: Ticket reopens track the number of tickets customers reopen after being initially resolved, indicating the effectiveness and satisfaction of the initial solution.

A lower ticket rate reopens effective resolution strategies and high customer satisfaction, highlighting the importance of resolving issues thoroughly and efficiently the first time.

18. Agent Touchpoints

Definition: Agent touchpoints measure the average number of interactions between an agent and a customer needed to resolve a ticket. It reflects the complexity and efficiency of the problem-solving process.

Reducing the number of agent touchpoints without compromising the quality of service can lead to increased efficiency and higher customer satisfaction, indicating a streamlined resolution process.

19. Number of Replies

Definition: This KPI counts the average number of messages exchanged to resolve a customer issue, offering insight into communication efficiency and effectiveness in problem-solving.

Efficient communication leading to fewer replies benefits customer satisfaction and operational productivity, highlighting the need for clear and concise communication skills.

20. Agent Feedback

Definition: Agent feedback consists of customers' assessments and opinions regarding their interactions with customer service agents. It's essential for evaluating performance and identifying training opportunities.

Positive feedback indicates effective customer service, whereas constructive feedback helps pinpoint areas for improvement and personal development, directly impacting service quality.

21. Volume by Channel

Definition: Volume by channel measures the distribution of customer interactions across various communication channels, such as email, phone, social media, and chat. It helps understand customer preferences and resource allocation.

Analyzing this metric enables businesses to strategically adjust their support focus and invest in channels that align with customer needs, enhancing accessibility and satisfaction.

How to set KPIs for your customer service department?

Below are six simple steps to help you set the right KPIs for your customer service departments and arrive at the metrics you need to measure.

1. Understand business goals

Every KPI you set should tie back to a specific business outcome that can be quantified. So start by taking a look at your business’s goals and work forward from there.

For example, for a business with a goal of improving responsiveness, a KPI around time to first response would be fitting. For one more focused on quality, a KPI around customer satisfaction would work well. Or, for a team aimed at providing an effortless experience, a customer effort score would be a great guiding KPI.

While others might be tracking first contact resolution or handle time, if these don’t relate to a team’s support philosophy or goals in a meaningful way, then it’s best not to make them into KPIs.

2. Outline team objectives

Along with being meaningful and relating to business values and goals, KPIs must be selected and structured in ways that make them effective for your team.

What is your team’s objective? The answer to this lies in finding out what you want for your team and what your team wants from you. This could be increasing ticket deflection, reducing resolution time, and upskilling.

For KPIs to be effective motivators, there needs to be widespread buy-in from the team. So, involving your team from the start increases the likelihood of buy-in. Team members have a wealth of knowledge that can be tapped to understand what’s important to customers and what’s achievable.

3. Frame KPIs

Once you’ve identified the business goals and team, you need to frame KPIs.

The best way to frame your KPIs is to be SMART about it. Smart stands for Specific, Measurable, Attainable, Relevant, Time-bound.

So you should be able to answer the following questions for each KPI: Is the objective specific? Can you measure progress towards that goal? Is the goal realistic? Can it really be attained? How relevant is the KPI to your business goal? Is there a time frame for achieving this goal?

Choosing too many KPIs will fracture a team’s focus and cohesion. Limiting the number of KPIs on the board at any given time keeps everyone on track and increases the likelihood of success. The Rockefeller Framework for management suggests having one main priority for each quarter, along with 3-5 “rocks” or KPIs that support the main goal. Any more than that, and your focus is too divided to make any real progress, says Rockefeller.

Making your KPIs realistic is important to keep a team engaged. Unrealistic goals are one of the biggest demotivators for employees. For instance, imagine setting a goal of 100% customer satisfaction. Not only is that essentially unachievable, but the goal is no longer possible as soon as one customer responds negatively. It’s better to start with challenging, small goals that grow into a larger goal over time.

4. List metrics to measure

You know by now that KPIs should be tangible metrics that can be analyzed to show positive and negative changes toward a goal. That doesn’t mean that a KPI always has to be inherently quantitative, for example, “reduce response time.”

are Qualitative concept that can be made quantitative. For example, a more abstract concept like employee satisfaction can be made quantitative by surveying employees periodically or by measuring employee attrition. But, KPIs can’t be conceptual. They need to be clear and measurable.

Using a suite of metrics helps teams gain a holistic perspective, but avoid over-indexing on any one metric.

5. Map metrics to roles

The next step is to identify who is responsible for achieving the goal.

Here’s where the audience comes into consideration. Some KPIs will mostly be meaningful to one role or department, while others will be more relevant to the rest of the business, notably, those that tie in most directly with overall company KPIs.

For instance, reducing first response time could be mapped to a customer service admin since it involves improving queue management while keeping resolution SLA in check is every agent’s responsibility.

6. Communicate KPIs and measure progress

To keep KPIs at the top of teams' minds, they should be communicated and updated regularly. Visibility will increase employee engagement and inspire accountability. In fact, over 50% of employees say that more company information and data sharing significantly impacted their productivity and performance.

Plus, to really make KPIs count, the data must be used to conduct effective customer service performance reviews and drive action. As such, they should be reviewed on a regular cadence.

Timing matters. If evaluated too infrequently, any variance in the KPI may be hard to explain because it may be difficult to remember the context. Furthermore, the window for taking corrective action may be long past. On the other hand, reporting too frequently can lead to missing larger, longer-term trends and be a waste of time.

It’s difficult to set hard-and-fast rules since KPIs will be different for every business, but some things to consider in determining how often to review any given KPI are as follows:

– Sensitivity: If it would take quite some time to see an impact on a KPI, for example, determining the impact of a policy change on annual renewal rates, then it’s better to measure less often. – Urgency: If there’s a strong need to make a fast improvement, it’s best to measure more regularly. – Cost: Some KPIs take more work to measure than others. Some may be included out-of-the-box as part of your software. Freshworks’ Customer Service Suite makes it easy to measure many common customer support KPIs, so they can be reported frequently. Other metrics are highly customized or require crossing data from different sources, so those will take more time and be more expensive. In those cases, it may be more prudent to check in on those less often.

Visualization can help make complex data more accessible for everyone, and good customer support tools will include these in their reporting features. An easy way to share KPIs in a digestible format is through dashboards.

What is a customer service KPI dashboard?

A customer service KPI dashboard is a live display of all the metrics that a team is measuring. A  customer service dashboard mainly helps with monitoring team performance and customer satisfaction metrics, including the total number of tickets resolved, average response time, and CSAT score.

As we’ve said before, KPIs can be assessed alongside one another to identify important dependencies. For example, a decrease in response time might result in an increase in customer satisfaction, in which case a team could narrow in on making gains in both satisfaction and responsiveness goals by focusing heavily on response time.

All in all, simply looking at the numbers isn’t enough. Data, when presented on a dashboard, is most valuable since it can be used to identify trends that tell a story and give insight into how to proceed. Any variance in KPIs over time should be connected to a cause, some activity, or an event that caused the number to shift.

In that way, teams can continue things that move the KPI closer to the desired state and avoid the ones that move them further away from the desired state. After all, the real power of KPIs, the ones that matter, is their ability to provide insight that informs a team’s strategy and moves them toward success. Let’s find out more about how you can empower your team.

What are the challenges of achieving customer service KPI metrics?

Achieving customer service KPI metrics presents several challenges for businesses aiming to maintain high service standards. These challenges include internal processes, goal setting, external pressures, and unexpected events. Understanding these obstacles will help your business develop strategies to overcome them and provide excellent customer service.

Setting realistic goals

One challenge in achieving customer service KPIs is setting realistic and achievable goals. Organizations often need help to balance ambition with feasibility, leading to targets that may either be too easy, failing to drive improvement, or too tricky, setting teams up for failure. 

Realistic goals come from accurate historical data, industry benchmarks, and an understanding of the team's capabilities. They should also be flexible enough to adjust as the business grows and market conditions change. Overly ambitious KPIs can demotivate staff, while under-challenging ones may lead to complacency, neither of which benefits the organization or its customers.

Customer expectations

Customers' ever-evolving expectations pose a significant challenge to achieving customer service KPIs. Today, customers value speed, efficiency, and personalization, meaning companies must continually adapt their service strategies to meet and exceed these expectations. 

This adaptation requires keeping up with technological advancements, changing consumer trends, and optimizing every customer interaction for satisfaction. The disparity between customer expectations and the actual service provided can impact KPIs related to customer satisfaction, loyalty, and retention.

Information silos

Information silos can hinder customer service efforts. When customer service teams cannot access comprehensive, up-to-date information about customers, products, or services, their ability to resolve issues efficiently and effectively is compromised. 

This lack of cohesion between different departments (such as sales, marketing, and product development) can lead to inconsistencies in customer interactions and a fragmented customer experience. Breaking down these silos through better communication channels and integrated CRM systems will improve service outcomes and KPI performance.

Unavoidable crises

Natural disasters, global pandemics, or unexpected system outages can challenge organizations maintaining customer service KPIs. These crises can lead to increased customer inquiries, complaints, and service requests, all while potentially disrupting the normal operations of the customer service department. 

The ability of a business to manage these crises effectively depends on its crisis management plans, flexibility of operations, and the resilience of its customer service infrastructure. Preparing for these unavoidable crises with contingency plans and maintaining clear, empathetic communication with customers is vital for mitigating the impact on service KPIs.

How can you help your customer service team achieve KPIs?

In addition to setting the right KPIs, it’s important to objectively assess team performance, understand how different activities impact their goals, and identify ways to improve. While certain issues that your team is facing could be unique, here are four ways in which you can help your team achieve their KPIS.

1. Focus on agent enablement

Your support team is only as good as the resources they have to offer quick assistance. Here are a few things that you can set up to enable agents: – Internal knowledge base: A one-stop repository for all articles, policies, and resources for support agents that helps agents find answers to customer questions with ease. – Agent assist bot: AI-enabled chatbots and recommendations that recommend the next best answer, resource, or course of action and are especially handy while maintaining the quality of support as you scale your team. – Canned responses: Answers that are pre-saved or templated to enable agents to answer repetitive questions with the click of a button.

Investing in these agent productivity boosters will help ensure that KPIs like resolution SLA, and first response resolution see a positive uptick.

2. Automate routine tasks

Right from the time a ticket is created until the time it’s resolved, there are a ton of (repetitive) activities that an agent has to perform including picking up tickets, following up while collaborating, and sending CSAT surveys. There is no escaping from these activities. Or is there?

Automating these workflows can free agents from these repetitive tasks and also positively impact KPIs such as average handle time, and the number of tickets resolved. A good help desk software will allow you to set up flexible automation rules with various triggers including keywords, time, and events or activities performed on a ticket.

3. Use omnichannel customer service software

If you’re offering support across channels and using different tools for managing conversations on different channels, then your agents are spending too much time juggling between tools than you think they are. 

Investing in omnichannel customer service software that streamlines conversations from different channels into a single view helps ensure that agents can offer seamless support across channels with ease. Agents will also be empowered to deliver context-rich solutions that can improve customer satisfaction and business performance KPIs.

4. Enable customer self-service

Investing in customer self-service helps you hit two birds with one stone – improving customer experience as well as easing agent bandwidth. Here are a few options you can implement: – Knowledge base/self-service portal: The go-to place for customers to get basic doubts cleared by browsing through articles and FAQs without interacting with human agents. – Chatbots: Powerful virtual agents that can help customers with issues of varying difficulty instantly. – Community forums: The place where customers interact with one another and help each other solve issues.

How can Customer Service Suite help?

Integrating Freshworks' Customer Service Suite into your strategy revolutionizes how you manage customer interactions, significantly impacting your key performance indicators (KPIs). 

Freshbots powered by Freddy Self Service can operate across multiple communication channels to ensure customers receive prompt answers, minimizing wait times and allowing your team to concentrate on more complicated customer complaints. With the ability to deflect up to 70% of conversations, Freshbots enables your support team to prioritize tasks that significantly impact customer satisfaction and operational efficiency.

For businesses in the initial stages of setting up their customer service framework, it's vital to identify and prioritize KPIs that align with specific industry standards and customer expectations. For established teams, reassessing your current KPIs to ensure they align with your long-term customer support goals is equally important. 

Freshworks CSS allows you to set and achieve realistic, impactful KPIs. This strategic alignment empowers your support team to excel, transforming your customer service into an undeniable asset for your business.