We are continuously tasked with the formidable challenge of delivering exceptional service while maintaining operational efficiency. To navigate this dynamic environment effectively, focusing on the right Key Performance Indicators (KPIs) is crucial. While traditional metrics like Average Wait Time (AWT) and Average Handle Time (AHT) among many are beneficial but they often serve as sub-KPIs that don’t fully capture the potential for transformative change in customer service operations. There are four KPIs—Cost per Order, Share of Errands, Cost per Errand, and Customer Effort Score (CES)—that can revolutionise your customer service strategy.
Cost per Order: Optimising Financial Performance
Cost per Order is a critical KPI that signifies how cost-effective an organisation is in taking care of its customers relative to sales. This metric provides invaluable insights into the efficiency of your customer service operations and their impact on your bottom line.
Example:
Consider a mid-sized company that managed to reduce its Cost per Order by 20% through strategic process optimisation. By streamlining order processing and embracing automation, they not only cut costs but also reinvested the savings into enhancing the customer experience. This strategic move led to increased customer satisfaction and loyalty, demonstrating how this KPI can be a powerful lever for boosting profitability.
The importance of Cost per Order lies in its ability to reveal how well an organisation balances service quality with operational costs. A low Cost per Order indicates that the company is efficiently managing its resources whilst meeting customer needs, contributing to a friction-free customer journey.
Sub-KPIs driving Cost per Order include:
- Order Fulfilment Time: Reducing the time from order placement to delivery can lower costs and improve satisfaction.
- Process Efficiency: Optimising internal processes can decrease operational expenses, contributing to cost efficiency.
- Accuracy in Order Execution: Ensuring correct order fulfilment reduces returns and associated costs.
Share of Errands: Uncovering Service Opportunities
Share of Errands is a crucial KPI that measures how well an order is carried out without generating customer service errands. This metric provides insights into the quality of your products, services, and processes by revealing how often customers need to reach out for support relative to the total number of orders.
Example:
Imagine a tech firm that noticed a high Share of Errands, indicating frequent customer interactions for support. By analysing this data, they identified common product usability issues and proactively redesigned their user interface. This proactive approach reduced the need for support interactions, improved customer satisfaction, and fostered loyalty by addressing root causes of customer inquiries.
The significance of Share of Errands lies in its ability to highlight areas where the customer journey may be experiencing friction. A low Share of Errands suggests that customers are able to use products or services with minimal issues, contributing to a smoother, more satisfying experience.
Sub-KPIs driving Share of Errands include:
- First Contact Resolution (FCR): Higher FCR rates reduce repeat interactions, lowering the share of errands.
- Average Response Time: Faster responses decrease follow-up interactions.
- Customer Satisfaction Score (CSAT): Identifying areas for improvement can reduce the frequency of interactions.
Cost per Errand: Streamlining Service Efficiency
Cost per Errand is a vital KPI that measures how cost-efficient the customer service organisation is in handling customer inquiries and issues. This metric provides insights into the effectiveness of your service delivery processes and the overall efficiency of your support team.
Example:
A global e-commerce platform faced high costs per errand due to inefficient service processes. By investing in employee training and adopting AI-driven customer support tools, they streamlined operations, reduced resolution times, and enhanced customer satisfaction. This focus on efficiency not only lowered costs but also empowered their service teams to deliver quicker and more effective solutions.
The importance of Cost per Errand lies in its ability to reveal how efficiently an organisation resolves customer issues. A low Cost per Errand indicates that the company is effectively managing its resources whilst providing high-quality support, contributing to a more seamless and cost-effective customer experience.
Sub-KPIs driving Cost per Errand include:
- Average Handle Time (AHT): Reducing interaction time can lower costs while maintaining quality.
- Agent Utilisation Rate: Effective use of agents leads to more efficient service delivery.
- Self-Service Options: Implementing self-service tools can reduce the number of errands handled by agents.
Customer Effort Score (CES): Enhancing Customer Experience
Customer Effort Score (CES) is a critical measure of how easy it is for customers to get their issues resolved. This KPI directly correlates with customer satisfaction and loyalty, as customers prefer seamless and hassle-free experiences.
Example:
Picture a telecommunications company that prioritised reducing Customer Effort Score (CES) by simplifying their service processes. They introduced a self-service portal, allowing customers to resolve issues independently. This initiative not only reduced customer effort but also increased customer loyalty, as users appreciated the hassle-free experience. Studies show that minimising customer effort leads to higher loyalty, as customers are more likely to repurchase and recommend the brand.
Sub-KPIs driving CES include:
- Ease of Access to Support: Offering multiple support channels can reduce customer effort.
- Resolution Time: Quick problem resolution minimises customer effort.
- Feedback Mechanisms: Regular feedback helps identify and streamline high-effort interactions.
Understanding the Distinction Between Errands and Underlying Reasons
Tracking both the nature of a customer errand and the underlying reason for contact is crucial. Whilst the errand refers to the specific issue or request, the underlying reason delves into why the customer felt the need to reach out. This distinction can reveal systemic issues that, if addressed, could prevent future contacts and enhance the overall customer experience.
- Cost Efficiency: Addressing underlying reasons reduces interaction volume, lowering costs and allowing focus on complex issues.
- Customer Satisfaction: Resolving root causes leads to a smoother, friction-free journey, boosting satisfaction and loyalty.
Conclusion: Driving Sustainable Growth through Strategic KPIs
These KPIs offer a comprehensive framework for evaluating the true value of customer service operations. They provide insights into cost efficiency, customer interaction frequency, service process efficiency, and customer satisfaction—all essential for driving improvements and achieving a friction free customer journey. By honing in on these areas, organisations can enhance customer satisfaction and nurture long-term loyalty, ultimately propelling sustainable business growth. By honing in on these areas, COOs and customer service managers can enhance customer satisfaction and nurture long-term loyalty, ultimately propelling sustainable business growth.
To learn more about implementing these KPIs and optimising your customer service operations, explore our customer experience transformation resources. Take the first step towards elevating your customer service strategy today.
