Facts over fiction: How to evaluate the real value of customer service

Wait times and handling times are commonly used as key indicators to evaluate customer service. But do these traditional figures really reflect the value that customer service adds to a business? We believe that there are KPIs that can be used for controlling while at the same time helping to identify improvements in other areas.

Customer service is typically evaluated based on three questions:

  1. Why are the customers contacting customer support?
  2. How easy is it for the customers to establish contact?
  3. How was the issue solved and how long did it take?

Since outsourced customer service isn’t part of the company but a service that is bought in, the second question – how easy it is for customers to get in touch – tends to be central in the evaluation of the service. Depending on the business model, it can also be interesting for the contracting company to know how quickly a case is handled. Both of these figures are easy to measure and evaluate and can be used to calculate the average cost per customer service case.

But we believe that there are other indicators that better promote collaboration between the outsourcing company and the client. Instead of the classic customer-supplier relationship, where the supplier is evaluated on the basis of blunt figures, we’re interested in a collaboration where both parties contribute to the creation of added value and are involved in all steps that affect the customer experience and customer service cost.

We asked ourselves: Which KPIs can be used for controlling customer service costs?

In order to find the answer to that question, you must identify the three aspects that contribute to the customer service cost:

  1. Problems, faults and lacking logistics

We want to suggest that customer service is at its best when you need it as little as possible. Why waste time calculating the cost per call if the calls don’t actually contribute any added value?

If issues like poor UX and lacking logistics are fixed, the number of customer service cases will reduce drastically, and then the total customer service cost will go down. No customer ever wants to call customer support. Help them avoid it, rather than focusing on cutting ten seconds off the response time.

  1. Improved information and technical solutions

But to think that it would be possible to eliminate customers’ needs to get in touch with a company entirely is of course not only naive – it could also mean a missed opportunity to strengthen the customer relationship or to up-sell.

Thanks to recent developments in technology, businesses have the opportunity to be present with their customer through proactive information flows and self-service functionality that’s available around the clock. The cost of technological solutions is considerably lower per customer case compared to what it would be if a human being were to handle the same cases.

  1. Agents for boosting sales and improved customer relationships

The majority of businesses still need customer support that’s manned by real people. Because people have a high operating cost, cases handled by people are expensive – but the cost can be controlled by monitoring key indicators of efficiency.

Moreover, you shouldn’t use human beings for cases that don’t contribute any value for the customer or the business. The cases handled by people should have a high business value, contributing to an increase in sales or an improved customer relationship – something our qualified agents are experts at.

It’s the customer service cost per order that’s interesting – not the cost per case

It’s our impression that a lot of organisations fail to utilise the full potential of customer service in their calculations. We believe that it’s the cost per order – in other words the cost in relation to your actual sales – that’s interesting, not the cost per case.

Why? Because if we focus on the cost per order with the ambition of getting it as low as possible, that will directly impact on the organisation’s results. That’s what happens when the only cases that are handled by customer support are those that need to be dealt with by a human – all while other problems are fixed and remaining cases are managed through self-service functionalities. And that’s why it’s perfectly acceptable that the cost per case that’s managed by a human goes up.

The cost per order, as we have demonstrated, is impacted by:

  • the number or cases, in other words the number of customers who contact customer support, and
  • how cases are handled as cost-effectively as possible through a combination of technology and people.

By shifting your focus from the key indicator of cost per case to cost per order – in relation to your sales – it has the following effect on the outsourcing collaboration:

  • The clarity increases.
    It becomes easy to see which KPIs that drive the customer service cost.
  • The MBO is improved.
    It becomes easier to identify the potential for improvements and draw up action plans.
  • Evaluation is made easier.
    It becomes easier to evaluate the entire customer journey.

The result? The governance is improved through a collaboration where both parties make decisions based on relevant facts, which contributes to joint success.