Article

6 customer service KPIs you need to track

How effective and efficient are your support agents? Find out by tracking the six most important customer service KPIs below.

By David Birchmier, CEO of Tymeshift

Published March 22, 2018
Last modified August 3, 2020

Over the years, I’ve been fortunate enough to speak with some of the world’s most effective customer service leadership teams. I’ve found that there are a few questions about key performance indicators (KPIs) that come up time and again:

  • Which KPIs should we be tracking?
  • Why do these customer service KPIs matter?
  • How do we use them to improve employee performance and drive customer happiness?

The problem is, there really isn’t a blanket response that will answer which specific KPIs you should be using. Why? Your company’s needs and the way you measure customer success are both unique. That means your KPIs will probably be different from the ones that other organizations use.

That said, comparing your company’s customer satisfaction rates to established industry benchmarking statistics can provide valuable insights into how well your customer service team is satisfying customers. Zendesk’s customer service benchmarking is a great place to start—it features data culled from more than 45,000 businesses across industries.

But first, let’s talk about the six most common—and, arguably, the most important—customer service KPIs to track.

1. Average resolution time

It’s critical to track your resolution time—the amount of time it takes a customer service representative (CSR) to solve a ticket once it’s been created.

According to customers surveyed in our 2020 Zendesk Customer Experience Trends Report, a fast resolution is the most important aspect of a good customer service experience.

Average resolution time is simply the average time it takes to solve all tickets over a specified time range. For example, let’s say you’re calculating average resolution time for an eight-hour shift. Simply divide total resolution time over eight hours by the number of tickets solved in those eight hours.

Average resolution time formula

For an even simpler solution, Zendesk Explore automatically tracks this customer service KPI for you. The tool also gives an option to deduct pending time, on-hold time, or both, from average resolution time.

Average resolution time will vary depending on the complexity of the customer service issue. Still, there are multiple steps a company can take to improve on this KPI:

  • Build a robust knowledge management system

    A knowledge base is a searchable, online library of FAQs and how-to resources. It helps customer service agents quickly find solutions to common problems and encourages self-service.

  • Add an answer bot to your website

    This machine learning technology suggests relevant articles to customers who contact your business for help. Customers can find answers to their questions without needing to wait for a service representative, reducing the amount of time to resolve issues.

  • Use automatic ticket-tagging software

    It's common for help desk software to assign tags to support tickets when they’re created. This system can be used to automatically route tickets to the appropriate agent once they come in, ensuring a quick resolution time.

When it comes to a positive support experience, the most important thing to customers is getting their issues solved quickly. Using the tools above, you’ll be able to track and improve average resolution time across your entire support team—and drive customer loyalty and retention as a result.

2. Occupancy

Calculated as a percentage, occupancy measures the amount of time your CSRs spend actively assisting customers and resolving tickets.

Occupancy includes: It does not include:
Answering customer chats Team meetings
Picking up the phone Training sessions
Tackling ticket backlogs Lunch breaks

To calculate the occupancy rate for an individual agent:

  1. Add up the total amount of time spent on ticket-related activities, also known as handling time (e.g., answering customer calls or resolving tickets)
  2. Next, add up the total amount of time that agent spent logged in (i.e., clocked in and ready to assist customers)
  3. Divide handling time by logged-in time, then multiply by 100 to get a percentage

Occupancy rate formula

So why is this customer service KPI so important to measure?

As Henriette Potgieter, a management consultant at QBIC Solutions, explains,

"Occupancy answers the question: For what percentage of the time that my advisors are logged in live are they actually busy with a customer activity, or are they available to do more?"

Simply put, occupancy helps managers determine if their agents are too busy or not busy enough.

For example, a rep with a 100% occupancy rate has no time to compose themselves between tickets. Not only can this lead to agent burnout, but it can also negatively impact customers’ support experience.

While we recommend a general target occupancy rate of 75-85%, the ideal percentage for your team will differ depending on employee bandwidth and budget.

If your agents are consistently above an 85-90% occupancy rate, you may want to consider hiring additional representatives or even outsourcing your customer service to another agency.

3. First response time

First response time (FRT) is how long it takes a customer service representative to respond to a support ticket once a customer submits it. This customer service KPI is an indication of how well your agents can handle multiple tickets at once, as well as manage fluctuating ticket volumes.

To calculate this metric manually, subtract the time of the first response to a ticket from the time that ticket was submitted by the customer. For example, if a customer submits a ticket at 8:00 a.m. and the first reply from an agent occurs at 10:00 a.m., the FRT is two hours.

First response time formula

If you’re a Zendesk Explore user, you can easily track first response time KPIs by navigating to your dashboard’s Efficiency tab.

Tracking first response time in Zendesk

Companies often use service level agreements (SLAs) to define their expectations for this KPI. One SLA, for example, might promise a response to every customer support inquiry within one hour or less. Setting a company-wide standard for your agents will make it easier to track and measure their performance.

Average first response time

According to the Zendesk Benchmark report, four hours is the average first response time across all industries for all support tickets. However, your customers’ expectations will vary by channel, age, and issue type.

To reduce first response time, consider supporting customers on channels that allow for more immediate responses, such as live chat, SMS, or other messaging channels. Additionally, it’s helpful to identify the time of day that incoming ticket volume is at its highest. That way, you can ensure peak hours are properly staffed, and agents are able to meet your company’s SLA.

4. First contact resolution

A customer service representative achieves first contact resolution (FCR) when they resolve a service ticket during the first interaction with that customer. There’s no transferring of customers to other support agents, and no need to follow up at a later time.

Here at Zendesk, FCR tickets are also known as “one-touch tickets.”

To calculate FCR, add up the total number of one-touch tickets. Divide that number by the total number of tickets received, and you’re done!

If you’re a Zendesk Explore user, instructions for displaying FCR on your dashboard can be found here.

First contact resolution formula

FCR, sometimes known as one-touch resolution, is an important customer service KPI to track because it directly impacts the customer experience.

Customers hate repeating themselves

Customers surveyed in the 2020 Zendesk Customer Experience Trends Report said that having to repeat their information multiple times was the third-most frustrating aspect of a bad service experience.

First contact resolution eliminates the chances of this happening because only one agent is needed to resolve the issue.

Of course, you should always aim to achieve a 100% first contact resolution rate. However, this isn’t always possible. Improve this customer service KPI as best you can by:

  • Properly training your agents
  • Providing knowledge management resources
  • Implementing software that routes tickets to the most appropriate agent first

5. Tickets handled per hour vs. tickets solved per hour

Tickets handled per hour is how many tickets an agent opens and interacts with over the course of an hour. Tickets solved per hour is how many of those tickets were resolved and closed within that same time frame.

When you compare these two metrics side-by-side, you’re able to see how effectively an agent can handle inquiries and work efficiently.

Ideally, your agents should be resolving the same amount of tickets they’re handling per hour. Of course, this isn’t always possible when staffing is short.

To calculate these customer service metrics, simply add the number of tickets an agent handled and solved in an hour. If you use Zendesk Explore, these metrics are automatically tracked for you.

Graph showing tickets created and solved

Help improve both metrics by properly training your customer service agents. The more they know about your products, the easier they’ll be able to answer customer questions and resolve their issues.

6. Customer satisfaction score

None of the above metrics matter if your customers aren’t happy. That’s why measuring customer satisfaction (CSAT) is so important.

CSAT is a qualitative metric, so you’ll want to measure it through customer satisfaction surveys, which you can create using third-party apps like Survey or Simplesat.

Zendesk Support users can measure CSAT simply by enabling it on their account. Customers are sent a CSAT survey within 24 hours of their ticket being closed. They’re asked to rate their support experience as “Good” or “Bad,” and are given the option to provide written feedback for the customer support team.

Customer satisfaction survey example

Encourage your customers to use the optional comment box on our form so that you can pinpoint which aspects of customer service are working well and which need to be improved.

Regardless of the tool you use, CSAT surveys are effective tools for quickly capturing a snapshot of the customer experience.

Use customer service KPIs to drive employee engagement and customer happiness

Customer service experiences are often the defining moments in a consumer’s decision to either stay loyal to your brand or never shop with you again. To ensure those experiences are positive, you need a strategy for measuring and improving upon your CSRs’ performance.

The six customer service KPIs above provide a data-driven analysis of the efficiency, effectiveness, and satisfaction of your customer support team. Continue to improve on these metrics, and you’re likely to see customer retention and loyalty skyrocket.

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Learn the ins and outs of the most important customer service metrics.