Call Center Best Practices:the Five Most Important Kpis For Customer Service Call Centers

Introduction

Introduction

Todays call center technologies and reporting packages make it easy to capture copious amounts of performance data. Most call center managers can tell you everything from last months average speed of answer to yesterdays average handle time. But what does it all mean? If my abandonment rate goes up, but my cost per call goes down, is that good or bad? Is my call center performing better this month than it was last month?

Despite all the data that call center managers have at their fingertips, most cannot answer a very basic question: How is my call center performing? Perhaps worse, many call center managers are unaware of the critical role beyond mere measurement that Key Performance Indicators (KPIs) can and should play in the call center. This includes the ability to track and trend performance, identify, diagnose, and correct performance problems, and to establish performance goals and assign accountability for achieving the goals.

In this article, MetricNet (www.metricnet.com), a leading source of online benchmarks and a pioneer in call center benchmarking, identifies and defines the five most important performance metrics for customer support call centers. They provide benchmark ranges for these metrics, and offer a creative approach for combining these metrics into a single, all-inclusive measure of call center performance.

The Mighty Power of Metrics

Many of us have heard the sage advice You cant manage what you dont measure. This is particularly true in the call center, where effective performance measurement is not just a necessity, but a prerequisite for effective decision-making. Despite the widespread belief in this statement, few call centers use KPIs to their full potential. In fact MetricNets research, gathered from literally thousands of call center benchmarks, suggests that the vast majority of call centers use metrics to track and trend their performance but nothing more! Unfortunately, in this mode, a call center misses the real value of performance measurement by failing to exploit the diagnostic capabilities of KPIs.

The true potential of KPIs can only be unlocked when they are used holistically, not just to measure performance, but also to:

Track and trend performance over time

Benchmark performance vs. industry peers

Identify strengths and weaknesses in the call center

Diagnose and understand the underlying drivers of performance gaps

Prescribe actions to improve performance

Establish performance goals for both individuals and the call center overall

In short, performance measurement and management is a critical discipline that must be mastered for any call center that aspires to world-class performance.

The Five Most Important Call Center Metrics

The average customer service call center tracks more than 25 metrics. This is a classic example of quantity over quality, where call centers falsely assume that they are doing something productive and good by tracking all of these metrics. The vast majority of these metrics, however, are only marginally relevant at best! The five that really matter are as follows:

Cost per call

Customer Satisfaction

First Contact Resolution Rate

Agent Utilization

Aggregate Call Center Performance

These five metrics represent the 80/20 rule when it comes to call center performance: 80% of the value you receive from performance measurement and management in your call center can be derived from these five simple metrics!

How do we know these are the most important metrics? Is it a hunch? Suspicion? An academic exercise? No, its none of the above. We know that these are the five metrics that matter most because the empirical evidence from more than a thousand call center benchmarks supports this conclusion. But let us explain why these metrics are so critically important.

One goal of every business is to achieve the highest possible quality at the lowest possible cost. It stands to reason, therefore, that cost and quality should be measured on an ongoing basis. In fact, many would argue that cost and quality are the only two things that really matter. In a call center, the most effective cost metric is cost per contact, and the best indicator of quality is customer satisfaction. With this premise in mind, its relatively easy to come up with the next two metrics on our list: First Contact Resolution (FCR), and Agent Utilization.

Earlier in this article, we talked about the importance of using metrics as a diagnostic tool to improve performance. So we have to ask ourselves, if customer satisfaction is one of the foundation metrics in the call center, how can we affect it? How can we improve it? Put another way, if customer satisfaction is suffering, what is the diagnosis?

Well, it turns out that customer satisfaction is affected by a whole range of other performance variables, including Average Speed of Answer (ASA), Call Quality, and Handle Time, to name just a few. But the single biggest driver of customer satisfaction by far is FCR! Nine times out of ten when customer satisfaction needs to improve, this can be achieved by increasing the FCR. This is why world-class call centers pay so much attention to this metric. They engage in a variety of tactics to continuously improve FCR, including agent training, investments in knowledge bases, and agent incentives tied to improvements in FCR.

But what about Cost per Call, the other foundation metric in the call center? It is common knowledge that labor, i.e. personnel, is the single biggest expense in the call center. In fact, for the average call center, 67% of all costs are labor related: salaries, benefits, incentive pay, and contractors. By definition, then, labor costs are the greatest lever we have to reduce the cost per call.

The best measure of labor efficiency is agent utilization. Because labor costs represent the overwhelming majority of call center expenses, if agent utilization is high, the cost per call will inevitably be low. Conversely, when agent utilization is low, labor costs, and hence cost per call, will be high.

We have now discussed four of the five metrics that are most important for managing a call center. What about the fifth metric? What is aggregate call center performance, and how do we measure it? Can a single measure really tell us the overall performance of our call center? The answer is yes, but as the name suggests, it involves aggregating a number of measures to come up with a combined score for call center performance.

MetricNets research shows that establishing a single, overall score for your call center is critical. We call this measure the Balanced Score because it truly does communicate a balanced picture of call center performance. This is a mechanism that utilizes the key measures tracked in a call center, including such things as cost per call, ASA and call abandonment rate, and rolls them into a single, aggregate measure of call center performance.

Conclusion

Most call centers commit two major mistakes when it comes to performance measurement: 1) they track too many metrics, and 2) they do not exploit the full potential of their performance metrics as a diagnostic tool.

In this article we have shown that you can effectively track and trend your call center performance using just five KPIs. The two foundation metrics that every call center should track on an ongoing basis are Cost per Call and Customer Satisfaction. The next two metrics in the top five are the ones that have the greatest influence on cost and customer satisfaction: Agent Utilization and First Contact Resolution. And the final metric, what we call an aggregate metric because it provides an overall measure of call center performance, is the Balanced Score.

These five metrics not only allow you to effectively measure your call center performance, but they enable you to:

Track and trend performance over time

Benchmark performance vs. industry peers

Identify strengths and weaknesses in the call center

Diagnose and understand the underlying drivers of performance gaps

Prescribe actions to improve performance

Establish performance goals for both individuals, and the call center overall

When it comes to call center measurement and management, less really is more! By tracking just five KPIs, and using these KPIs diagnostically to affect positive change in the call center, the job of guiding your call center towards world-class performance can be greatly simplified.

Due to space limitations, this article barely begins to scratch the surface on the topic of call center KPIs. For a more detailed treatment of this topic, the complete whitepaper can be downloaded from MetricNets website.

by: metricnet

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