From operational KPIs to tracking customer outcomes
Which customer metrics are important today and why
Customers who get in touch with your contact centre are mostly interested in outcomes. They want their problem solved.
They are only interested in the process – the customer journey as we call it – insofar as it lets them achieve that outcome with minimum effort.
When it comes to measuring the success of a contact centre operation, or Customer Experience (CX) program, we need to keep those two crucial factors top of mind: Did we solve the customer’s problem? How quickly and efficiently did we get it sorted for them?
However, there is also a third indicator that can be more difficult to pin down: How do interactions with your brand make your customers feel?
CX is a focus at boardroom level because it provides a set of tools by which a brand and its offering can be differentiated. That simply means giving customers more reasons to choose you over a competitor.
To understand what impact your CX and your contact centre are having on the overall results your organisation achieves, you need to ensure you are measuring key performance indicators (KPIs) that tell you about all three of these things: outcomes, efficiency, and emotion.
Old versus new KPIs
In the days before businesses focused heavily on CX, when contact centres were the transactional workhorses of an organisation or a means for customers to complain, what mattered were operational indicators.
Like the sensors on a car, these told you everything you needed to know about well the machine was performing, and what needed attention. The focus was on how well the operation was doing, less on customers. It was about managing costs rather than making the optimum use of resources to achieve commercial goals.
These operational indicators include average handling time (AHT), wrap time, hold time, aux time, time to answer, and so on.
It’s still important to track these, but we need to realise that they do not exist in isolation. What really matters is how your Grade of Service (GOS) metrics impact customers and customer outcomes, and by extension the organisation’s overall success, usually measured in terms of revenue and profit – at least for commercial businesses.
So, what metrics should organisations be measuring to understand that link between customer outcomes (did we solve the customer’s problem?), customer effort (was it quick and efficient?), customer sentiment (how did the customer feel?), and the organisation’s success?
A hierarchy of KPIs
The first thing to appreciate is that KPIs exist in a kind of nested hierarchy, where the lower-level ones can influence the ones above.
The operational KPIs such as AHT and hold time that we have already discussed are mostly concerned with the service’s efficiency. These Service Accessibility Metrics have the most immediate impact on the Customer Effort side of things, which tries to measure how quickly and efficiently customers’ problems are getting solved. The combined impact of all these efficiency metrics is usually summarised by a single customer effort score; a metric that we get from asking customers to rate the ease of their experience.
On the Customer Outcomes side, there are several key things to measure. The first is, simply enough, customer outcomes or the end result of each interaction. Contact centres usually assign outcome codes to individual customer interactions that the agent needs to select in the scripting software, CRM, or case management software. First contact resolution (FCR), which measures how many cases are resolved in the first interaction, is another important metric. FCR is clearly influenced by a whole host of operational and efficiency indicators – as well as lots of other things – so this sits a level higher in the hierarchy.
At the top of the customer metrics hierarchy come the measures of Customer Sentiment. The two most important and well-known include Customer Satisfaction and NPS (Net Promoter Score). Often called Service Quality and VoC (Voice of the Customer) metrics, these generally depend on gathering feedback directly from customers either immediately post-interactions or in ad-hoc surveys. They can be enhanced and cross-checked with other non-subjective indicators of customer engagement, such as user actions, length and frequency of website visits, social media engagement, or frequency of visits to a retail site.
Finally, all these indicators funnel into and influence your organisation’s main indicators of success. Depending on the type of organisation, these include customer churn, customer loyalty, conversion rates, and length of customer lifetime, as well as those that are inherently financial in nature, such as purchase frequency, average order value, average lifetime value, and even customer acquisition cost and overall cost of service.
Optimise outcomes, not KPIs
It’s not that the traditional operational or performance-related KPIs were wrong or even that they’re no longer important. As we have seen, they hugely influence your organisation’s other indicators, and chances are that if your operation gets the basics right, your higher-level KPIs will take care of themselves.
Putting your different indicators in a hierarchy, however, enables you to see how they influence one another. Rather than just focussing on costs and revenue, you can now see, in context, the full chain of causal effects that impact your organisation’s success at each level.
This means that we can now see what the overall impact on all our indicators is going to be if we decide, for example, to answer all our calls 5 seconds more quickly. There is, obviously, a cost involved in answering calls more quickly, whether that comes from upgrading IT infrastructure and software, investing in call deflection activities, or simply scheduling more resources – or a combination of all three.
With that indicator, time to answer, embedded in a proper hierarchy you can see the result of shortening, or indeed lengthening it on all the other indicators, and ultimately on revenue and margins.
And it is here that the full magic reveals itself: You are no longer setting target KPIs to meet some industry benchmark, or because your organisation targets operational efficiency as a desired end-goal in itself; instead, you are making decisions about the deployment of resources to optimise customer and commercial outcomes, rather than KPIs.
With the increasing importance of CX to many businesses, it’s important to focus on customer metrics that can drive a cycle of continuous improvement to the contact centre operation. Not for the sake of just improving KPIs, but with specific commercial goals in mind. Mapping out your indicators and their influence on each other gives you a roadmap for what you need to change and improve to meet your organisation’s wider goals.
TSA are Australia’s market leading specialists in CX Consultancy and Contact Centre Services. We are passionate about revolutionising the way brands connect with Australians. How? By combining our local expertise with the most sophisticated customer experience technology on earth, and delivering with an expert team of customer service consultants who know exactly how to help brands care for their customers.