The One Customer Service KPI You Should Be Monitoring, But Aren’t

Share This Article

0 0 0 0

Customer Service KPI

You’re no noob.

You know the secret to profitability isn’t constantly finding new customers, but consistently keeping old ones coming back for more. You might not know how much that impacts profits though. Consider these stats:

  • Increasing retention rates by 5% increases profits by 25-95% according to Harvard Business School.
  • It can cost 7 times more to acquire new customers than to keep old ones, according to Kissmetrics.
  • Globally, the average value of a lost customer is $243, according to Kissmetrics.

As the song goes: Make new friends, but keep the old.

And how do you keep friends? You treat them well! If you don’t, they’ll find someone who will, like the 71% of consumers who have ended their relationship with a company due to poor customer service.

The ultimate test of quality customer service is whether customers come back.

Yet while Sales tracks the new customers they bring in, often times Customer Service isn’t tracking retention rates. Customer service can make the difference between a one-time customer and a loyal one. So shouldn’t they get the credit? In addition, it’s important to know where to focus support to improve retention rates.

Must dos:

  1. Associate every service request with a customer account
  2. Associate requests with sales

Most times customer service reporting will focus on cus­tomer sat­is­fac­tion as measured by request aban­don­ment rate and reported cus­tomer feed­back. SmallBizTrends recommends tracking how likely someone who interacts with your customer service team (or self-service help desk) is to make a purchase or take some other kind of action.

This is a great idea, but also kind of basic.

Instead, connect various aspects of customer service with conversions.

Good Data’s list of KPI’s for customer service teams to track is a great place to start. For the following KPI’s, the first thing to measure is the KPI itself (obvs). But then you want to level up.

Compare the following to retention rates:

Average Resolution Time/Average Wait Time

Comparing ART and AWT to retention rates can help you quantify ROI on efforts to reduce ART/AWT. For example, if a 10% reduction in ART can increase retention by 20%, it may justify hiring more agents.

Basic: Does decreasing ART/AWT correlate with higher retention rates?

Advanced: At what point does decreasing ART/AWT lead to diminishing returns on retention rates?

Number of Tickets by Medium

Let’s assume it’s necessary to prioritize incoming requests by something other than when they are created. If you’re only tracking resolution time, number of completed tickets, etc. then agents will choose the simplest requests to address first.

Likely ROI is the best way to prioritize incoming tickets. In other words, resolve the tickets which will make you the most money first.

So it’s important to know whether customers who create tickets in Twitter tend to stay loyal longer than customers who create them via email, for example.

Top 10 Customers by Active Tickets/Top Customers in Need

The more someone uses a product, the more opportunities they’ll have to need support. Keep your most loyal customers happy by responding to their requests quickly, and measure the impact this has on how loyal they stay.

You might even make this prioritization transparent. Help Scout suggests creating tiered loyalty programs. Nunes studied loyalty programs and found that people love being VIPs or gold members of programs. How do you get your VIPs to participate more? Implement a lesser class. VIPs engage more when they know there is a class below them on the totem pole.

Top Agents

Again, if top agents are based on resolution time, number of completed tickets, etc. agents are incentivized to choose the simplest requests to address first.

Resolution speed matters. But research shows that quality matters more than speed. A Gallup Group study showed that customers were nine times more likely to be engaged with a brand when they evaluated the service as “courteous, willing, and helpful.” By contrast, customers were only six times more likely to be engaged when they evaluated the service as “speedy.”

How might tracking retention rates and and evaluating agents based on that influence agent incentives? It might mean agents find loyal customers and help them more thoroughly instead of just trying to solve their issue quickly so they can move on to the next ticket.

Experiment with empowering your top agents to offer inexpensive, easy gestures to show that customers matter to you. Encourage agents to surprise customers with above-and-beyond service which does a better job of taking advantage of the reciprocity instinct. Then track the impact on sales.

Sale Rates, Upsell, and Cross-sell Rate

As we’ve established, it’s easiest and most profitable to sell to your existing customers. However, evaluating customer service agents based on sales, upsells, and cross-sells is a dangerous road to travel. Companies rightly fear that incentivizing selling will lead to disincentivizing basic service and encourage tactics that might scare off current customers. As Help Scout warns, “If customers don’t enjoy your selling process, they’ll likely never do business with you again.”

The solution to pushy customer service agents is tracking retention rates. Only reward agents who are selling if their tactics aren’t pushing down retention rates.


Ultimately, you don’t just want to know how to retain customers. You want to retain your best customers, and those customers with the potential to become best customers. You also want to know how to get your customers to spend more. Looking at how every stage of the customer service journey impacts retention rates, sales, and spend helps you hone in on what works to improve it even more, and to stop doing the things that hurt revenue.

Are you monitoring how your customer service impacts retention rates? Why or why not? Let us know in the comments!

Looking for Customer Service software? Check out Capterra's list of the best Customer Service software solutions.

Share This Article

About the Author


Cathy Reisenwitz

Cathy Reisenwitz is a former Capterra analyst.


No comments yet. Be the first!

Comment on this article:

Comment Guidelines:
All comments are moderated before publication and must meet our guidelines. Comments must be substantive, professional, and avoid self promotion. Moderators use discretion when approving comments.

For example, comments may not:
• Contain personal information like phone numbers or email addresses
• Be self-promotional or link to other websites
• Contain hateful or disparaging language
• Use fake names or spam content

Your privacy is important to us. Check out our Privacy Policy.