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How to Measure Customer Service and Improve Your Customers’ Experience

Aleksandra Tadrzak

15 min read

May 8, 2024

Every time your business gains a new customer, there are two possible outcomes. Either you deliver on your promises, satisfying them and creating a repeat or loyal customer. Or you leave them disappointed and likely face negative publicity when they leave a poor review.

According to a Zendesk survey, 52% of customers will switch brands after a single negative customer service interaction.

First impressions are so important when it comes to retaining customers, so you must pay attention to your company’s customer service quality. The only way to do this is to measure customer service and gather the information you need to provide a positive customer experience (CX).

In this article, we will look at what it takes to measure customer service and how you can use customer service data to improve your overall CX.

Why you should track customer service

Customers are notoriously fickle. And with tons of competition in nearly every niche, there’s always an alternative, another option for every product or service available—customers are more than happy to make the most of their choices.

While pricing and quality of goods and services are important concerns, CX plays an equally, if not more important, role in determining consumers’ purchasing decisions. According to a PwC customer satisfaction survey, 73% of customers consider CX a deciding factor in choosing which company to buy from.

Tracking customer service is essential to view the big picture of how your target market perceives your brand. Along with this broad perspective, taking a closer look at the finer details of your customer service operations is also valuable.

Here are three ways measuring customer service improves your overall CX and contributes to your business’ success:

Understand your customers’ needs
Paying close attention to the kind of requests your customer service teams get will form a clearer picture of what your customers want. Whether it's positive or negative feedback, the points raised are valuable to understanding their needs and expectations from your company.
Identify pain points for customers
There are many ways to improve CX, all of which involve identifying the problems as a first step. The nature of the customer support tickets your customer service team receives will highlight the most persistent pain points in your business model.
For example, if the problems with your CX are delayed delivery, inferior packaging, or anything else, you can tell by measuring your company’s customer service actions.
Improve service deliveryYou don’t measure customer service just to find out what’s wrong with your business. You also need it to learn what you’re doing well. Customer feedback also contains success stories, which are helpful when figuring out what exactly draws people to your brand. When you learn what attracts your existing customers, you can use those lessons to tweak your offerings, increase customer satisfaction, and draw in new audiences with improved service.

Mapping customer journeys: The starting point for customer service success

To accurately measure customer service, you need to be aware of every touch point between your company and your customers. In other words, you need to be intimately familiar with the customers’ journey.

The customer journey is the sum total of all experiences each person has involving your brand, including the time before and after making a purchase.

By building a map of the customer journey, you gain insight into their needs at every stage. This information can help you streamline customer service operations to help customers have a better experience throughout their journey. A customer journey map is essentially a visual representation of each stage and its impact on the brand’s CX—a critical element in your efforts to increase customer satisfaction and boost loyal customers.

Five stages of every customer journey

Every customer will have a unique journey with your brand. This is where personalization and customer service intersect, but that’s a different topic altogether.

For now, what you should remember is that despite the variables, every customer journey goes through five distinct stages:

Stage 1 - Awareness: In the first stage, customers become aware of a problem that needs solving or a need of theirs that has to be met. The goal of customer service at this point is to create awareness that there are solutions that your brand can deliver. You should provide potential customers with valuable content to help them learn more about how you can help solve their problems.

Stage 2 - Consideration: As they search for a solution, potential customers should encounter marketing materials that lead them to the solutions your brand provides. At this stage of their journey, customers are likely to explore several competitor brands. The quality of your customer service and brand outreach can be the difference-maker that makes them choose your products or services.

Stage 3 - Decision: Here’s where things get serious. At this stage, a customer has gathered all the information they need to make a purchasing decision. If your marketing strategy has worked, they will choose your brand, and that’s where your customer service team needs to jump into action. When the customer journey reaches the decision stage, your company needs to make the purchasing process as seamless and simple as possible. Complicating the experience of checking out all the products in their cart will drag down your CX and drive away customers.

Stage 4 - Retention: In this stage, your customer service team should aim to reduce customer churn rate, or the number of people who stop supporting a business over time. The objective is to turn a one-time buyer into a repeat and loyal customer. Your company needs to provide ongoing, excellent customer service to ensure all customers remain satisfied with their purchases and the brand as a whole.

Stage 5 - Loyalty: Customer satisfaction increases when they feel valued by the brand. This is why rewarding loyal customers is crucial to customer service. This is the final stage of the customer journey, where they should enjoy the benefits of sticking with your brand through perks like discounts and other exclusive offerings. At this point, your aim should be to provide excellent end-to-end customer service that delights customers and turns them into informal ambassadors for your brand.

The point of breaking up the customer journey into these five stages is to identify and maximize every touch point along the way. By developing strategies to improve the experience at all stages of the journey, you can then focus on customer satisfaction.

Deciding on an approach to measure customer service

How you measure customer service will depend on your business goals. You can opt for a qualitative or quantitative approach or a combination of the two.

If you are focusing more on metrics and key performance indicators (KPIs), then a quantitative approach is better suited to measuring customer service quality. However, a qualitative approach works better if you want to work on attributes that are harder to quantify, like customer sentiment or customer satisfaction.

A quantitative approach to measuring customer service is more structured, as it relies on collecting concrete data connected to CX. Quantitative methods are more concerned with objective data, which is standardized across all customers in their audience.

On the other hand, qualitative data involves more abstract ways of obtaining feedback. The goal of this approach is to capture insights about subjective views held by customers through open-ended survey questions, focus group discussions, or review analysis.

Why you should adopt qualitative methods to measure customer service

You should never overlook qualitative methods when measuring customer service at your company. While quantitative data accurately represent key CX statistics, qualitative methods often go even deeper, giving you a more complete picture of what is happening underneath the surface when it comes to your company’s customer service.

The two strongest arguments in favor of including qualitative methods in your customer service evaluation are:

Qualitative methods capture the voice of the customer.
You gain more insights into how popular products are perceived by the audience.

Both approaches are effective tools for customer service measurement. Ideally, you should employ a mix of quantitative and qualitative methods when trying to improve your company’s customer satisfaction ratings.

With the many advanced tools available to businesses in the digital age, combining a qualitative and quantitative approach is easier than ever. New text analysis tools speed up processing text data from customer feedback, like comments, reviews, and emails. This, paired with the data analytics of modern customer relationship management (CRM) software, gives you a balanced look at the current state of your customer service operations.

KPIs for customer service

While qualitative analysis of customer service data helps establish context and adds nuance to your understanding of CX, no CX transformation can be managed without tracking important KPIs. Several important metrics can be monitored to measure customer service.

If you have chosen quality CRM software, it will have advanced reporting functionality. This will enable you to monitor the metrics you’ve chosen for your customer service transformation. Your list of chosen metrics will depend on your business goals, so it's important to align your KPIs and objectives when deciding which metrics to track. Remember, there are many different metrics relating to the various aspects of customer service. It would be easy to get bogged down by too many details—you should focus only on what’s important.

For example, if retaining existing customers is the top problem for your customer service team, you will want to track metrics like churn rate, average resolution time, and resolution rate. Meanwhile, if the primary issue is related to problems with your product, you will want to track first response time and customer service abandonment rates.

Some other examples of customer service metrics that serve as KPIs include net promoter score (NPS) and customer satisfaction score (CSAT). Take the time to learn how each metric relates to your company’s overall CX, and then prepare your list of KPIs to measure customer service.

Beyond metrics: Holistic approaches to measure customer service

Tracking customer service metrics as KPIs gives you a detailed look at individual aspects of customer service, like issue resolution, customer waiting times, and purchasing experience. However, if you want to evaluate your overall CX from a broader, more holistic perspective, you will need to go beyond traditional metrics.

Instead of monitoring customer service data that is one-dimensional, you need information that paints a comprehensive picture of the entire customer journey.

There are various measurement frameworks you can rely on for this. Let’s look at some of the most common ones you can use.

Customer lifetime value (CLV)

One of the main reasons that customer service teams divide their brand’s customers into different segments is that it helps them focus their energy and resources. Naturally, high-value customers should be given more priority when resolving issues, and CLV is one of the best ways to segment high- and low-value customers.

CLV is such a useful segmenting tool that 25% of marketers in a Gartner survey ranked it among their top five metrics. A simple way to calculate a given customer’s CLV is by multiplying the number of annual purchases by the total profits and by the number of years they have been buying from your company.

Customer effort score (CES)

CES has untapped potential to help you measure your customer service. You should track CES to know precisely how easy it is for your customers to get a hold of your customer service team and find a satisfactory resolution.

A low CES will indicate that your CX is faulty at a fundamental level. Meanwhile, a higher CES is a sign that you have all your bases covered when it comes to customer service and now need to fine-tune certain aspects to improve even further.

To calculate CES, you need to ask customers to rate the difficulty of completing any customer service interaction from 1 to 5. In this rating, 1 means extremely difficult, while 5 means extremely easy. You then calculate the average rating by adding every customer’s response and dividing by the total number of responses. This will give you the CES for any customer service process, and you can yield insights on how to streamline it.

Customer satisfaction index (CSI)

Of all the frameworks to measure customer service, CSI provides the most complete snapshot. By tracking CSI, you can measure aspects of customer service like product satisfaction levels, pricing, and ease of use, among others.

Customers give each aspect an individual rating. You can weigh the ratings according to your own needs, depending on the business goals you want to achieve. Then, all the inputs and different weights are formulated to derive a final index number, the CSI score.

CSI score is a valuable metric to keep in mind because it offers a nuanced consideration of your overall CX. It’s much easier to collect customer insights when there is a convenient metric like CSI letting you know exactly how well your customer service team is performing.

Making sense of customer service data

It doesn’t matter whether you’re trying to track hard metrics or capture subjective customer sentiments; there is no shortage of data for you to collect. How you go about collecting this data is a critical component of your overall customer service strategy. The method you choose will impact several key areas of your business, from targeted marketing campaigns to ongoing customer service operations.

Traditionally, companies would gather customer service insights by directly soliciting feedback from the customers themselves. Those methods have evolved as technology has advanced, but they are just as effective in their new avatars.

Let’s look at some of the time-tested tools for collecting valuable customer service data.

Surveys

This versatile tool can be used at any stage of a customer journey to measure customer service quality. Conducting surveys among your target audience lets you learn more about your customer base. Because surveys can capture detailed feedback, you can get clearer insights into customers’ pain points and purchasing motivations.

Email newsletters

A great way to get customers to voluntarily share their data with your company is to offer a subscription-based email newsletter. If your newsletter’s content is relevant and interesting to your target audience, they will sign up by themselves and share their name and email address. From there, you can learn more about customers by linking them to surveys within newsletters and asking them to curate the content they receive by indicating their interest in different topics.

Purchase history

Maintaining a record of existing customers’ previous purchases with your company is essential to customer service. On an individual level, it lets you know the personal preferences of any given customer. On a macro level, you gain valuable insights into your best-selling items, average order value (AOV), customer base demographics, and more.

Modern tools to track the quality of your CX

With all the digital tools at your disposal in 2024 and beyond, you can create more advanced strategies for analyzing customer service data by leveraging the following:

Chatbots

Implementing live chat is a basic customer service offering in this digital age. Live chat is gaining popularity with businesses to gather and streamline customer service data. Even customers are growing more familiar with this channel, with a 2022 report finding it second only to email as their preferred mode of communication with brands.

Chatbots are a must-have customer service asset because of the following:

Increase engagement by automatically starting customer conversations based on pre-set triggers.
Streamline customer communication by integrating various channels, like WhatsApp Business, Messenger, Apple Messages for Business, and more.
Improve CX by delivering personalized recommendations based on existing customer profiles.
Assist customer service teams by automating tedious, repetitive tasks.

CRM

Apart from the sources of customer data mentioned above, you can also collect customer information by monitoring website traffic and running SEO campaigns. The sheer volume of customer service data available to brands demands a smart hub where it can all be processed. Robust CRM software fulfills that requirement, acting as the heart of your customer service operations. CRM software automatically collects customer information from various sources, integrates with common customer service platforms, and records purchases and sales history.

When you start measuring your customer service, you will need to employ a selection of these tools to get accurate information about the state of your CX. Effective CRM software will have features that allow you to prepare customer service reports and create data visualizations.

Why customer service is a continuous process

Once you’ve begun monitoring your customer service, you better understand how creating a positive CX is a delicate and intricate process. Many factors go into creating CX, and it’s a misconception that it is solely the customer service team’s responsibility. Everything from product design and social media messaging to after-sales service has an impact on CX. The customer journey will have multiple touchpoints connecting to different departments in your company.

This is why fostering a culture of committed customer service at every level of your organization is so important. A clear-cut CX strategy needs to be implemented, and every stakeholder in the company should be brought up to speed. When different departments are all working toward the same goal of customer satisfaction, CX goes through a marked improvement.

To track the gains made by your CX strategy, you will need to measure customer service, which starts the cycle all over again. Creating a culture of constant customer service at your company is the path to continued success and growth.

A new way to measure and improve customer service

If you want to start reaching out to your customers with a tool that can benefit your business, consider including LiveChat in your customer service toolkit.

LiveChat is a complete customer service platform on virtually any channel, whether it be email and messaging services or in-app conversations and website chat links. It contains everything you need to measure your customer service according to your business needs, from customizable chat widgets to detailed customer service reports.

Empower your customer service team to deliver more value to your customers by signing up for LiveChat.

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