What Are the Top 7 KPIs Metrics of a Call Center Business?

Managing a successful call center is crucial for the growth and sustainability of any business, but in the artisan marketplace, it becomes even more critical. As small business owners and artisans, understanding the specific Key Performance Indicators (KPIs) that drive the success of your call center can make a huge difference in your bottom line. In this blog post, we will explore 7 industry-specific KPIs that are essential for optimizing the performance of your call center in the artisan marketplace. Whether you're looking to improve customer satisfaction, decrease response times, or boost sales, these insights will provide valuable guidance for maximizing your call center's efficiency and effectiveness.

Average Handle Time (AHT)

Definition

Average Handle Time (AHT) measures the average amount of time it takes for a call center agent to handle a customer interaction, from the moment the call is answered to the point when all follow-up work related to the call is completed. AHT is critical to measure as it directly impacts operational efficiency, customer satisfaction, and cost-effectiveness. In the business context, this KPI is important because it reflects the productivity of call center agents, the overall quality of customer service, and the potential impact on the company's bottom line.

How To Calculate

To calculate the Average Handle Time (AHT), add the total talk time, hold time, and wrap-up time for a given period, and then divide that sum by the number of calls handled during the same period.

Example

For example, if a call center handled 100 calls in a day, with a total talk time of 400 minutes, a total hold time of 50 minutes, and a total wrap-up time of 100 minutes, the AHT would be calculated as follows: AHT = (400 + 50 + 100) / 100 = 5.5 minutes

Benefits and Limitations

The advantage of measuring AHT is that it provides insights into agent productivity and customer service efficiency. However, a potential limitation is that an overly strong focus on reducing AHT may compromise the quality of customer service if agents feel pressured to rush through interactions.

Industry Benchmarks

According to industry benchmarks, the average handle time for a call center in the United States ranges from 4 to 6 minutes. Above-average performance may be considered as an AHT of below 4 minutes, while exceptional performance could mean maintaining an AHT of 3 minutes or less.

Tips and Tricks

• Invest in agent training and development to improve call handling efficiency without sacrificing customer service quality.
• Regularly review call scripts and service procedures to identify potential areas for improvement in handling time.
• Empower agents with tools and resources to streamline tasks and access customer information more efficiently during interactions.

First Call Resolution (FCR)

Definition

First Call Resolution (FCR) is the ratio of customer inquiries or issues that are resolved on the first interaction to the total number of customer inquiries or issues during a specific period. This KPI is crucial to measure as it directly reflects customer satisfaction and loyalty. In a business context, FCR is important because it indicates the efficiency and effectiveness of the call center in addressing customer needs, which can directly impact customer retention, word-of-mouth recommendations, and overall business performance. It matters because it provides insights into the quality of customer service provided and can identify areas for improvement to enhance the customer experience.

How To Calculate

FCR is calculated by dividing the number of customer inquiries or issues resolved on the first interaction by the total number of customer inquiries or issues, and then multiplying by 100 to get the percentage. The formula is:

Example

For example, if a call center resolves 150 out of 200 customer inquiries on the first interaction, the FCR would be calculated as:

FCR = (150 / 200) x 100

FCR = 75%

Benefits and Limitations

The benefits of measuring FCR include improved customer satisfaction, increased customer loyalty, and lower operational costs due to reduced repeat calls. However, a limitation is that FCR does not account for the time taken to resolve issues, and in some cases, it may prioritize speed over quality of resolution.

Industry Benchmarks

According to industry benchmarks, the average FCR in call centers across various industries in the US is around 70%. Above-average performance is considered to be in the range of 75-80%, and exceptional performance is achieved at 85% or higher.

Tips and Tricks

• Invest in comprehensive training for call center agents to enhance their problem-solving skills and product knowledge.
• Implement effective call routing and escalation procedures to ensure that inquiries are directed to the most qualified agents.
• Regularly monitor and analyze FCR data to identify trends and areas for improvement in the call center operations.

Customer Satisfaction Score (CSAT)

Definition

Customer Satisfaction Score (CSAT) is a key performance indicator that measures the level of satisfaction customers have with a company's products, services, or interactions. It is a critical ratio to measure as it provides insight into the overall satisfaction of customers and their perception of the company's performance. CSAT is important in the business context as it directly impacts customer loyalty, retention, and brand reputation. A high CSAT score indicates that the company is meeting or exceeding customer expectations, resulting in positive word-of-mouth, repeat business, and long-term success. On the other hand, a low CSAT score can signal dissatisfaction, leading to customer churn, negative reviews, and a decline in revenue.

How To Calculate

The formula for calculating CSAT is: CSAT = (Number of satisfied customers / Total number of survey responses) x 100%. In this formula, the number of satisfied customers refers to the total count of customers who indicate a high level of satisfaction on the survey, while the total number of survey responses represents the overall number of customers who participated in the satisfaction survey. By calculating the ratio and multiplying it by 100%, businesses can obtain the CSAT score as a percentage.

Example

For example, if a company receives 300 survey responses from customers and out of those, 240 indicate high satisfaction with the products and services, the CSAT score would be calculated as follows: CSAT = (240 / 300) x 100% = 80%. This means that the company has an 80% customer satisfaction score based on the survey results.

Benefits and Limitations

The benefit of using CSAT is that it provides a clear and measurable indication of customer satisfaction, allowing businesses to identify areas for improvement and track changes in customer sentiment over time. However, a limitation of CSAT is that it only measures satisfaction at a specific point in time and may not capture the overall customer experience. Additionally, CSAT scores can be influenced by survey design, response bias, and the timing of the survey, which can impact the accuracy of the data.

Industry Benchmarks

According to industry benchmarks, the average CSAT score across various industries in the United States typically ranges from 75% to 85% for companies with above-average performance. Exceptional performance in terms of CSAT may be reflected in scores exceeding 90%, indicating a high level of customer satisfaction and loyalty.

Tips and Tricks

• Regularly conduct CSAT surveys to gather feedback from customers
• Segment CSAT results by product or service to identify specific areas for improvement
• Take prompt action on low CSAT scores to address customer concerns and enhance satisfaction
• Use CSAT data to inform training programs for customer service representatives

Service Level (SL)

Definition

Service Level (SL) is a Key Performance Indicator (KPI) that measures the percentage of calls answered within a specific timeframe. This ratio is critical to measure as it directly impacts customer satisfaction and the overall customer experience. In the business context, SL is important as it reflects the efficiency and effectiveness of the call center in managing incoming calls. It also provides insights into the call center's ability to meet service level agreements and ensure that customer inquiries are promptly addressed.

How To Calculate

To calculate SL, the number of calls answered within the target timeframe is divided by the total number of calls received, and then multiplied by 100 to express the result as a percentage. The formula takes into account the specific time period agreed upon for answering calls and the actual performance of the call center in meeting that target.

Example

For example, if a call center receives 1000 calls during a day, of which 900 calls are answered within 20 seconds as per the SL agreement, the SL would be calculated as follows: SL = (900 / 1000) * 100 = 90%. This means that the call center achieved a service level of 90% for the specified timeframe, meeting the agreed-upon target.

Benefits and Limitations

The benefit of measuring SL is that it provides insight into the call center's ability to handle customer calls promptly, thereby improving overall customer satisfaction. However, a potential limitation is that SL does not account for the quality of service provided during the answered calls, and therefore should be complemented with other KPIs to achieve a more comprehensive assessment of call center performance.

Industry Benchmarks

According to industry benchmarks, the average service level for call centers in the United States typically ranges between 80% and 85%. Organizations that achieve service levels above 90% are considered to be performing exceptionally well within the industry.

Tips and Tricks

• Implement workforce management strategies to optimize staffing levels and ensure sufficient resources to handle incoming calls.
• Utilize call routing technologies to efficiently direct calls to available agents, reducing wait times and improving SL.
• Regularly monitor SL performance and conduct root cause analysis to identify areas for improvement.

Call Abandonment Rate

Definition

Call abandonment rate is a key performance indicator that measures the percentage of incoming calls that are abandoned by the caller before speaking to a representative. This ratio is critical to measure as it directly reflects the quality and efficiency of customer service. An elevated call abandonment rate can indicate long wait times or insufficient staffing, leading to customer frustration and potential loss of business. It is important to measure this KPI as it impacts customer satisfaction, loyalty, and ultimately, business performance.

How To Calculate

The call abandonment rate is calculated by dividing the total number of abandoned calls by the total number of incoming calls, then multiplying the result by 100 to get a percentage. The numerator represents the abandoned calls, while the denominator includes all inbound calls. This formula provides a clear indication of the percentage of calls that are not being handled effectively, leading to unhappy customers.

Example

For example, if a call center receives 500 incoming calls in a day and 75 of those calls are abandoned by the caller before speaking to a representative, the call abandonment rate would be (75/500) x 100 = 15%. This means that 15% of incoming calls are being abandoned, indicating potential issues with the call center's capacity to handle incoming call volume.

Benefits and Limitations

The benefit of measuring call abandonment rate is that it provides valuable insights into the efficiency and effectiveness of a call center's operations. By monitoring this KPI, businesses can identify areas for improvement and take action to reduce the number of abandoned calls, ultimately enhancing customer satisfaction. One limitation of this KPI is that it does not provide insight into the reasons behind call abandonment, which may require additional analysis to address underlying issues.

Industry Benchmarks

Industry benchmarks for call abandonment rate vary depending on the type of business and the nature of incoming calls. In general, a call abandonment rate of less than 5% is considered typical, while a rate between 5-8% is considered above-average. Exceptional performance is often reflected by a call abandonment rate of less than 3% in industries with high call volumes, such as customer service or technical support.

Tips and Tricks

• Monitor call volumes and peak times to ensure adequate staffing during high-demand periods.
• Implement call routing and queuing systems to efficiently handle incoming calls and reduce wait times.
• Provide ongoing training to call center agents to improve call handling and customer engagement.
• Gather customer feedback to identify common reasons for call abandonment and make necessary improvements.

Net Promoter Score (NPS)

Definition

Net Promoter Score (NPS) is a key performance indicator that measures customer loyalty and satisfaction based on the likelihood of customers recommending the company's products or services to others. This ratio is critical to measure as it provides insight into customer sentiment and their likelihood to advocate for the brand. In a business context, NPS is important as it directly correlates to customer retention and long-term business growth. A high NPS indicates satisfied customers who are more likely to continue doing business with the company and refer others, while a low NPS serves as a warning sign for potential churn and negative word-of-mouth affecting business performance.

How To Calculate

The formula for calculating NPS involves subtracting the percentage of detractors (customers who wouldn't recommend the brand) from the percentage of promoters (customers who would recommend the brand). The NPS formula is:

Example

For example, if a company has 60% promoters and 20% detractors, the calculation of NPS would be:

Therefore, the Net Promoter Score for this company would be 40.

Benefits and Limitations

The benefit of using NPS is that it provides a simple and effective way to gauge customer satisfaction and loyalty. It also serves as a leading indicator for potential business growth through referrals and customer retention. However, a limitation of NPS is that it may not capture the full complexity of customer satisfaction and could be influenced by external factors.

Industry Benchmarks

According to industry benchmarks in the US, a typical NPS for call centers falls between 20 to 30, while an above-average performance would be in the range of 40 to 50. Exceptional NPS scores in the call center industry can reach 70 or above.

Tips and Tricks

• Regularly survey customers to measure NPS and identify areas for improvement.
• Focus on addressing detractors' concerns to improve NPS over time.
• Incentivize promoters to refer others to enhance NPS and drive business growth.

Occupancy Rate

Definition

The occupancy rate KPI measures the amount of time call center agents spend on calls and performing call-related activities compared to the total available work time. This ratio is critical to measure as it provides insight into the productivity and efficiency of call center operations. In the business context, a high occupancy rate indicates that call center resources are being utilized effectively, maximizing the potential for revenue generation. Conversely, a low occupancy rate may signal inefficiencies or underutilization of resources, impacting overall business performance.

How To Calculate

The occupancy rate is calculated by dividing the total work time minus idle time by the total work time. The resulting percentage represents the occupancy rate, indicating the percentage of time agents are actively engaged in call-related activities.

Example

For example, if a call center has a total work time of 8 hours and the agents spent 6 hours on calls and performing call-related activities, the idle time would be 2 hours. Using the formula, the occupancy rate would be calculated as (8 - 2) / 8 = 75%, indicating a 75% occupancy rate for the call center.

Benefits and Limitations

The benefits of measuring occupancy rate include optimizing resource utilization, identifying potential bottlenecks in call center operations, and improving overall efficiency. However, a potential limitation is that a high occupancy rate may lead to agent burnout and decreased quality of customer interactions if not managed effectively.

Industry Benchmarks

Based on industry benchmarks within the US context, the average occupancy rate for call centers typically falls between 82-85%, with top-performing call centers achieving an occupancy rate of 90% or higher. These benchmarks serve as a reference for evaluating and striving for optimal occupancy rates within the call center industry.

Tips and Tricks

• Implement workforce management tools to schedule and allocate resources effectively.
• Provide regular breaks and downtime for call center agents to avoid burnout.
• Offer training and coaching to improve the efficiency of call-related activities.