Tag: customer service metrics

10 Nov 2016
blog-post-tracking-ecommerce-thumb-1

How tracking ecommerce metrics makes the holiday season brighter for online merchants

They are the second greatest gift any ecommerce merchant will receive in the holiday season, after the cold, hard holiday cash that can make or break an ecommerce retailer’s entire year, of course. But, surprisingly, in the rush of business that consumes them from Thanksgiving through the New Year, a lot of retailers overlook the valuable ecommerce metrics that flow in along with the cash. And that’s an oversight that can cost heavily in the long-run.

The reason is that every one of those all-important purchases is accompanied by data that can be captured and integrated and analyzed, and then turned into actionable insights that can remake those one-time holiday shoppers into long-term, loyal customers with a lifetime value many times greater than the initial purchase.

The question is which ecommerce metrics to track, and how, in order to foster a high rate of customer retention.

Six essential ecommerce metrics for holidays and every day

If you can think it, you can count it. The reality is that businesses can incorporate a seemingly open-ended range of metrics into their data collection and analysis, especially with the customizable, integrated dashboards now at their disposal. But, if the goal is enhanced customer satisfaction leading to increased customer retention, not all metrics are created equal.

Keeping an eye on the customer retention prize, key ecommerce metrics such as conversion rate, shopping cart abandonment, churn rate, repeat rate, and customer lifetime value can shine a light on what’s right and what’s wrong about the customer experience, and point the way to refining and improving it. And with the assistance of the right tools for the job, tracking key ecommerce metrics no longer has to be the onerous task it was in the manual age.

Conversion Rate

Before a business can take steps to retain customers, it has to acquire them. The conversion rate reveals how well that’s happening. Arrived at simply by dividing the number of site visitors who make a purchase by the number of visitors overall, it’s a metric that undergirds all the rest.

When potential customers enter an ecommerce website, what are the chances they will make a purchase? Across industries, a target rate is three percent, although specific industries will have rates that vary. If it varies significantly in the wrong direction, though, it may be a strong indication that the customer experience is not what it should be. Because conversion rate is a big picture ecommerce metric tracking large numbers of site visitors, it’s one that is often fully monitored and assessed on a monthly basis to review bulk data, but daily checks are also essential because they can pinpoint unusual fluctuations in the rate that may reveal problems with the website itself.

Shopping Cart Abandonment

It’s disconcerting to see a customer get all the way up to the cash register and then change his mind, leaving behind merchandise in which he was clearly interested. But it’s far from an unusual occurrence. Research from the Baynard Institute shows an average abandonment rate of an eye-opening 68.8 percent. Much of that simply reflects the way in which people surf the web, and the propensity most of us have to “window shop.”

But in other instances abandonment points to more serious buyer resistance, perhaps over price or concerns about quality that weren’t laid to rest at earlier touchpoints. Technical issues, too, are common reasons potential buyers leave – too many hurdles to jump in the checkout process, complicated navigation, and concerns about the security of payments among them. For many businesses, an abandoned shopping cart is an opportunity to reach out to would-be customers in the hope of learning why they left and gleaning information that can reduce the rate. Because the metric is closely related to the conversion rate – reducing the abandonment rate will increase the conversion rate- tracking tends to follow the same monthly cycle.

Churn Rate

Like conversion rate, churn rate is expressed as a percentage, in this case the percentage of customers who make a purchase and don’t return, the flip side of customer retention. Given the high cost of acquisition and the acknowledged need for companies to develop long-term, high-value relationships with loyal customers, it’s a must-monitor ecommerce metric.

For ecommerce businesses, knowing what percentage of customers can be expected to churn within a given period becomes both a measure of how successfully it’s giving customers the experience they expect and a powerful predictive tool for balancing acquisition and retention efforts. Churn rate is typically measured in months or quarters, depending on the average time in which the overall customer base will make a repeat purchase.

Repeat Purchase Rate

Repeat purchase rate simply tracks the percentage of customers who make a repeat purchase within a given period. It is one of the strongest indicators of the quality of the customer experience and the success of retention efforts.

As with other important metrics, repeat purchase rate is one piece of the data puzzle that, as the various elements are integrated and analyzed, provides a periodic snapshot of whether targets are being met or missed. It can provide either a bird’s-eye view of how successfully customers are being retained or, thanks to modern, real-time dashboards, home in on specific elements of a marketing campaign by tracking a promotion or other initiative daily or weekly to gauge its success.

Customer Lifetime Value

This is the brass ring, for any business, because the path to business success is lined with loyal customers, as an article in Forbes makes clear. If online retailers manage to retain ten percent of their customers, the author noted, they will double their revenue.

Tracking customer lifetime value (LTV) on a continuing basis provides the ecommerce metric that can put such goals in reach. It’s a projection of the revenue a business can expect from a customer over time, grounded in his or her past behavior as well as the average lifetime spending of the larger customer base.

LTV can guide decisions about budgeting for customer acquisition – how much should a business spend to gain a customer? – and also help calculate ROI. The cost of not knowing LTV can be enormous, as an article on For Entrepreneurs emphasizes. The number one reason startups fail, the author argues, is that it costs them more to acquire a customer than that customer’s LTV will prove to be.

‘Tis the season to begin tracking ecommerce metrics

There’s no better time than the busy holiday season, which sees a large inflow of new and repeat customers alike, to begin tracking these valuable ecommerce metrics. The information gleaned can be a priceless gift for any merchant.

22 Sep 2016
Data-driven Improvements in the Customer Journey

Customer Service KPIs Lead to Creative, Data-driven Improvements in the Customer Journey

It’s one thing to determine which customer service KPIs a business needs to track in order to understand the customer journey. But it can be another thing entirely to dig down into those KPIs and discover all they have to say about the overall quality of that journey, and how it can be improved to optimize the customer experience.

In fact, that was all but impossible to do before the new generation of cutting-edge customer service metrics solutions came along to afford marketers a comprehensive, real-time, and visible rendering of each of the metrics underlying each critical customer service KPI. The integrated, ground-level detail now available can lead marketers to the actionable, data-driven insights that – combined with a full measure of creative thinking – can pay off in everything from customer satisfaction and brand loyalty to ROI.

What leading companies are learning from customer service KPIs

While any given KPI for customer service may need to be tweaked to fit the particular processes and objectives of a given business – and while the KPIs that can be measured are really only limited by the imagination – there are some common indicators that many leading companies agree are essential for assessing their customer service performance. These KPIs include:

Response time to first reply

Time is money for the customer as well as for the business, and nobody appreciates being kept waiting. In fact, delays in responding to a customer inquiry can be lethal when it comes to fostering customer satisfaction and loyalty. In today’s omni-channel environment, however, there’s unlikely to be one sufficient customer service metric or a single answer to the question of how long it takes for a customer to receive a response. Instead, it becomes imperative to track average and median response times for each channel. In addition to tracking times by channel, these metrics also detail what portion of inquiries are resolved on first contact.

Resolution of customer cases KPIs

Responding to a customer is a first step, but the key to customer satisfaction comes when a company successfully resolves the issue beyond the contact. There are a number of metrics that tell the story behind this important customer service KPI.

How long does it take, on average, to resolve a case? Knowing that makes it possible to gauge how well the customer is being served. How many cases are being resolved successfully? Both the raw numbers and the percentages of successful resolutions are indicative of the efficiency of both processes and personnel. What is the overall handle time for a case? This is a metric that digs deeper into time-to-resolution, breaking down the process into an understanding of the time required for each stage of the process and revealing opportunities for improvements.

Average wait time metric

Once a case has been opened, and if it can’t be resolved during the initial contact, how quickly does the business respond? How many interactions does it take to resolve a case? It’s important to not only monitor the time from beginning to end, but also to track how long it takes to reach each touchpoint along the way. Measuring the time between touchpoints has the effect of both keeping the customer in the loop at appropriate intervals and informing decision-making about possible refinements to the process.

Number of rerouted contacts metric

Every company strives to respond appropriately and efficiently to every customer contact, and that can mean a customer is best served by being transferred to a specialist. How frequently does the front-line rep need to do that? Once rerouted, how long does the case remain open? How long does it take for the customer to get a response and a resolution? This is a customer service KPI that directly measures key elements of the customer experience even as it points out possible operational improvements such as possible training enhancements for reps.

Average hold time

It’s something every customer dreads, and it can be a powerful disincentive for customers to engage with a business. What are the average and median times that the customer was kept on hold? What percentage of them give up and abandon the call before reaching an agent? What are the average and median times before they throw in the towel?

Customer contacts by channel

Call centers are no longer the only way customers engage with a company, and they expect a seamless customer experience whether they pick up the phone or turn to a different mode of contact. What portion of contacts are coming through each of several channels? How long does it take for the customer to get a response via each channel? A resolution? Are customers utilizing multiple channels to resolve a single case? With consumer behavior changing rapidly to embrace new technologies, knowing the answers to these questions can help marketers perfect the customer experience and anticipate emerging trends.

Social media efficiency KPIs

The prominence of social media in daily life has made the ever-evolving array of social media platforms increasingly important to businesses and consumers alike, and it has become critically important for companies to understand how to use them effectively to improve the customer experience. How quickly is the company responding to customers, by platform? How often do cases begin on social media and proceed to another channel? What are consumers saying and sharing about the company on social media? As platforms such as Facebook, Twitter, and Snapchat have taken the place of the village green, it becomes imperative to capture KPI customer service data and insights.

Rep activity and effectiveness KPIs

How well are reps performing, individually and as a team? There are any number of metrics that can provide the answer. How long does it take for a rep to respond to a first contact? How many open cases does each rep have? How long does it take to resolve them, segmented by the stages involved? How many activities does an individual rep perform, and how does that compare to overall averages? With the rep at the heart of any customer service program, the ability of management to assess efficiency and effectiveness is an essential ingredient for customer satisfaction.

Churn incidence and potential

No one questions the importance and economic necessity of keeping established customers happy and retaining them. That makes it critically important both to monitor churn rates and the churn prevention metrics. What is the overall churn rate? How many open cases are on the books at any given time, and how long have they been open? When was the last contact? What is the value of each of them, in terms of current transactions and lifetime value? Tracking these data points can inform projections and, more important, allow for a proactive effort to retain valuable customers.

The bottom line: turn customer service KPIs into action

Of course, this brief list just scratches the surface of customer service KPIs that might be right for any particular company. But, whichever KPIs a business chooses to focus on, they all have one thing in common. They are only as good as the insights gleaned from them and the data-driven actions they lead to.

That, in the final analysis, is both the challenge and the unprecedented opportunity for marketers today: when the creativity that has always been the hallmark of the profession is bolstered by the wealth of data now at hand, just about anything is possible.