The modern-day CIO is responsible for everything from the IT infrastructure to customer experience. With such a significant focus on customer success, keeping track of all the metrics a CIO needs to know about can be challenging. Thankfully, some key metrics can answer the question of whether your company is doing well in this area. Here's what they are and how they're measured.
1. First Contact Resolution Rate (FCR)
What Is It: The first contact resolution rate (FCR) is the percentage of customer issues resolved during the first contact. Thus, for phone support, it means fixing the queries over the first call itself. For email, it means clearing the doubts in the first response. For chat, it means answering all the questions in a single chat session.
How Is It Calculated: To calculate FCR, divide the number of cases resolved over the first interaction by the number of cases handled by the agents in total. Multiply the number by 100 to get a percentage. For instance: If 200 cases out of 400 are handled in the first go, the FCR rate will be
200/400*100 = 50%
You can measure the query resolutions in the first interaction via QA call monitoring, IVR survey, web survey, polls, and post-interaction call/email/text. IoT, Big Data, and analytics will be essential components to measure such metrics.
Why Is It Important: It’s essential to track the FCR because it helps the organization measure the overall quality of its customer support. If a company has a high FCR, the customers are satisfied with their experience. On the other hand, if a company struggles with an extremely low FCR, then it is time for them to handle complaints and concerns adequately.
2. Average Handle Time (AHT)
What Is It: The average handle time (AHT) is the time a customer service agent takes to resolve/handle a client problem end-to-end. In a nutshell, it answers how long it takes for a customer to get through with their issues or questions. This includes everything from chatting with support agents to waiting for an email response.
How Is It Calculated: It's measured by dividing the total talk + wait + follow-up time by the total number of calls received. For example: if the total talk time was 10 minutes, the follow-up took 30 minutes, and the wait time was 5 minutes with 5 as the total number of calls, the AHT would be
10+30+5/5 = 45/5 = 9 AHT.
Why Is It Important: This metric helps support teams determine if their team is falling behind in meeting customers' expectations through faster response times. If the customers are waiting too long, that could indicate that something isn't working properly, or it might indicate poor training in handling queries from potential customers. However, lower AHT doesn’t always mean customer success, as speed isn’t directly proportional to efficiency. Hence, this metric works best when combined with thorough query resolution.
3. Net Promoter Score (NPS)
What Is It: Net Promoter Score (NPS) is a metric that measures customer loyalty. It is based on how likely the clients will recommend the business to their friends on a scale of 1 to 10. Customers are further categorized on the basis of scores they give: 9-10 score-givers are promoters, 7-8 score-givers are passives, and 0-6 score-givers are detractors.
How Is It Calculated: It's calculated by asking customers to rate their experience on a scale of 0-10, where 10 is the best possible score. Once the data is collected, subtract the percentage of detractors from the percentage of promoters. For example: If 500 people take the NPS survey and 200 people are detractors (200/500*100 = 40%) while 250 people are promoters (250/500*100 = 50%), the NPS would be -
50% - 40% = 10%
The more the NPS score, the more customer satisfaction you’ll have.
Why Is It Important: This is an important metric because it shows how likely someone would recommend your product/service over other options available within its industry segmentation. It's also an effective way of gauging employee satisfaction with their current job responsibilities as well as overall morale within any given department at work. Thus, it provides vital information about workplace culture within organizations whose primary focus involves providing products/services through direct interaction between employees' brains versus computer screens.
4. Retention Rate
What Is It: Retention rate is the percentage of customers who remain with the organization’s service or product after a certain period of time.
How Is It Calculated: By using the formula - [(E-N)/S]*100 where E is the number of customers towards the end of the time frame that’s decided upon, N is the number of new customers acquired during this time frame, and S is the number of customers you had initially when you started the time frame. For example: If you take the period Jan 1 to Dec 31 and had 500 customers on Jan 1 (S), acquired 100 more by Dec 31 (N), and 550 is the total number of customers you had by Dec 31 (E), then the retention rate is -
[(550-100)/500]*100 = 450/500*100 = 90%
Why Is It Important: A high retention rate indicates an engaged audience which is highly likely to do business with you again in the future. This metric can be used as part of an overall strategy for increasing customer value over time by showing how satisfied they are with their experience with the product/service.
5. Time to First Value (TTFV)
What Is It: Time to First Value (TTFV) is the time it takes for a customer to start deriving value from the service/product. In other words, this metric measures how long it takes for customers to complete their tasks on the platform after they sign up, including onboarding, account creation, payment processing, etc. This is a highly subjective metric and will vary for each business.
How Is It Calculated: While every customer has their own timeline and proceeds accordingly, TTFV is a goal that a company sets within which it wants the customer to achieve its first value. Let’s say an organization wants customers from a particular segment to achieve their [first value - it could be anything] in [some amount of time - perhaps 30 days]. These numbers in the form of goals should be introspected, decided, worked upon, and met.
Why Is It Important: A look at the overall TTFV gives a bird’s viewpoint of how things are working at a macro level. One could also dig deep into the progress of individual customers against the goal and take appropriate action.
6. Churn Rate
What Is It: The churn rate is the percentage of customers that stop using the product/service. It’s a key metric for customer success managers, product managers, business owners, and marketers to measure how likely customers are to return in the future.
How Is It Calculated: Canceled customers/Active Customers*100
For example: If 5 customers leave you and you have only 50 active customers now, the churn rate will be 5/50*100 = 10%. Please note that an annual churn rate of 4-7% is considered acceptable.
Why Is It Important: A high churn rate means trouble as it indicates low revenue derived from the fact that the business doesn’t have enough customers buying. This also signals that the sales representatives are not convincingly promoting the product/service. Whatever the case, it can be pinpointed and rectified using this customer success metric.
7. Qualitative Customer Feedback
What Is It: Customer feedback helps the organisation understand how its customers perceive the brand and whether they're satisfied or not. It also gives a clear picture regarding the areas that need to get better and how!
How Is It Calculated: Customer Feedback can be gathered via emails, WhatsApp texts, surveys, polls, and digital channels, among other means.
Why Is It Important: Customer feedback is important as it can be used in a number of ways -
To improve the customer experience by identifying issues and finding solutions.
To improve your product or service through continuous improvement processes.
For marketing campaigns that target specific audiences based on demographics, buying habits, and other factors.
These 7 customer success metrics can help the agents stay in sync with the team goals and achieve the set goals more effectively. Measuring success is essential, and these are the metrics through which it can be done. Remember, the happier the customers are, the stronger the customer experience is, which arises from better customer support.