Introduction: Why Measuring Customer Success Matters
Once a customer-centric organization hires the right-fit customer success talent, it’s crucial to train and evaluate performance against clearly defined standards. Often human resources professionals and customer success teams can sense that their teams are performing well, but they may not be able to effectively communicate or affect performance if they haven’t implemented key performance indicators (KPIs) to intentionally improve service performance, align teams, and cultivate long-term customer loyalty.
Customer expectations are higher than ever, and customer success teams need systems that empower them to meet these growing demands. By setting clear expectations for performance and training, customer success professionals know what it will take to excel — and, ultimately, customers will reap the benefit of a higher-performing team dedicated to customer satisfaction.
In this article, we will explain the most essential customer success KPIs, why they matter to businesses and their customers, and how to generate realistic, actionable goals.
What Are Customer Success KPIs
In order to measure how well a business and its teams are doing, metrics that provide insight into customer service performance and customer satisfaction are necessary. By implementing customer success KPIs, teams can better align their performance to broader business objectives. And from there, the customer success leaders and HR can establish strong standards to identify strengths and weaknesses within the team’s performance — enabling the business to cater training to better meet the established standards.
At Bonfire Training, we’ve been helping businesses implement these success metrics for several decades and have seen firsthand how KPIs positively impact both individual performance and organization outcomes.
The Essential Customer Success KPIs
Identifying the most important customer success KPIs will help organizations sidestep getting bogged down by measuring too many things that aren’t actionable. When establishing essential metrics, businesses will do well to keep business objectives front and center and discern which goals are actionable for the team.
In our extensive experience, we have identified the following essential customer success KPIs.
Customer Satisfaction Score (CSAT)
Most commonly measured through a survey, Customer Satisfaction Score indicates how happy or satisfied a customer is immediately after an interaction with a brand, service, or product. It can indicate overall customer sentiment as a leading indicator of increased revenue. Short surveys focused on only essential metrics will yield the strongest insights.
To get a CSAT score, customers will usually be asked “How satisfied were you with your customer service today?” after their interaction. They will then rate their customer service satisfaction from a scale of 1 (dissatisfied) to 5 (satisfied). A good CSAT goal is often above 70%. While most companies will strive for a perfect 5, additional comparison to related metrics is needed to have clearest insight into customer satisfaction.
Average Handling Time (AHT)
Knowing how long it takes to resolve a customer interaction can empower teams to balance efficiency with customer satisfaction — one should not negate the other. Each organization will need to understand the complexity of its most common customer inquiries to determine an appropriate AHT target. Often, a lower AHT is desirable. However, quality must remain a priority over quantity to reduce follow-ups and to ensure the aim of each interaction remains satisfied customers.
A “good” average handling time varies greatly by industry and the complexity of inquiries. AHT is calculated by dividing the total time spent handling customer interactions (including call duration, hold time, and after-call work) by the total number of interactions handled. For example, if a team spends 300 minutes on 50 calls, the AHT is 6 minutes. And for straightforward inquiries, a good benchmark is 4-6 minutes. For industries that handle more technical customer interactions, the average handling time will likely have higher averages.
First Response Time (FRT)
The time it takes for a customer support agent to provide an initial response to a customer inquiry can indicate how efficient and attentive the team is. Also, the time a customer waits for a first response can set the tone for all subsequent customer support interactions. Automated response for acknowledgement and expectations setting for human follow-up will go a long way in setting up a customer success team for productive interactions with customers.
In call centers, an FRT with 30 seconds or less marks a common goal—and can be closer to 90 seconds for more complex industries like healthcare. For email ticket systems, a benchmark of under 1 hour is ideal. Live chats align with similar expectations for FRT as call centers and should aim for 30 seconds or less.
Customer Effort Score (CES)
How easy (or hard) it is for customers to get the support they seek or to resolve issues determines the Customer Effort Score. Essentially, how much effort a customer needs to exert to interact with a business can be a corollary indicator on overall customer satisfaction and loyalty. Streamlined processes can reduce customer friction and frustration.
CES is gathered through automated, post-interaction surveys that ask, “How easy was it to resolve your issue today?” Customers rate their experience on a scale (e.g., 1 for “very difficult” to 7 for “very easy”). Typically a score of 5 or higher on a 7-point scale indicates “good” for CES.
Resolution Time
When customer success teams measure the time it takes to fully resolve a customer’s issue (Resolution Time), they often glean actionable insights into the team’s effectiveness and efficiency. Simply defined, resolution time measures the average time it takes to resolve customer issues (often known as tickets) from when they are opened until they are closed. Customer success teams can find great value in breaking down resolution data by case type to identify trends and to determine where additional training may be needed.
What “good” looks like for timely resolution varies significantly based on industry and inquiry complexity. This can range for an average of 24 hours for e-commerce up to 5 days for involved industries. Customer success teams will do well to focus on consistency. Where there are anomalies, additional agent training may be needed.
First Contact Resolution Rate (FCRR)
The percentage of inquiries resolved in the first interaction indicates the FCRR. The data points needed are the number of customer issues resolved on first contact and the total number of customer interactions. FCRR is determined by dividing the number of issues resolved during the first interaction by the total number of interactions, then multiplying by 100 to get a percentage.
This customer success KPI reflects overall team competence and enhances customer satisfaction. Actionable steps with this data point focus on training and resources for front-line agents. A higher FCRR is desirable, with a goal of 70-90% being most typical.
Net Promoter Score (NPS)
One of the most widely used metrics that determines the likelihood of customers recommending your service is the Net Promoter Score. As a one-off metric it doesn’t paint much of a picture. However, when used consistently it can serve a leading indicator of long-term customer loyalty. When using NPS, it’s important for organizations to watch out for cultural differences or biases that can impact scores—set realistic benchmarks.
NPS is usually measured by asking a customer “On a scale of 0-10, how likely are you to recommend [product or service] to a friend or colleague?” The scores are then put into the following categories:
- A score of 9 or 10 is a promoter. These are people who are happy with you and will advocate for you.
- A score of 7 or 8 is a passive customer. They are happy with you, but are unlikely to advocate for you.
- A score of 0 to 6 is a detractor. They are unhappy, and are unlikely to purchase from you again. They may even discourage others from purchasing from you, or leave a negative review.
The formula to calculate NPS is % promoter – % detractor = NPS. So if 75% of your customers are promoters and 10% are detractors, your NPS score is 65. A positive NPS (above 0) is considered good, while scores above 50 are excellent and scores above 70 are world-class.
Setting Realistic and Actionable Goals for KPIs
Implementing and tracking Customer Success KPIs is more than a numbers game—it’s about creating a framework that drives meaningful change and aligns your team’s efforts with broader company goals. Formalizing these KPIs can elevate a customer success strategy and allow for great alignment through the organization.
When KPIs are clearly defined, they establish new standards for success and focus measurable activities and behaviors that impact customer success and satisfaction. This level of intentional focus empowers teams to work smarter, not harder.
Common Pitfalls in Customer Success KPIs
Before getting started, it can be helpful to keep an eye out for pitfalls organizations experience around KPIs. Here are the most common missteps for customer success teams implementing new measurement programs:
- Unrealistic expectations for initial performance
- Focusing too much on a single metric
- Not considering impacts to business objectives
- Misalignment with cross-functional teams
- Unchecked biases about what a metric might indicate
Formalizing Customer Success KPIs
Here’s how formalizing these KPIs can elevate your customer success strategy:
- Gain actionable insights – Tracking KPIs isn’t just about measuring performance; it’s about uncovering actionable insights into customer behavior and satisfaction.
- Identify strengths and areas for improvement – Knowing a business’s improvement areas is as important as knowing its strengths. When a team can pinpoint an area needing focused efforts, they can set realistic goals for incremental improvement.
- Align teams with company objectives – Well-defined KPIs serve as a bridge between the customer success teams and the company’s long-term goals. When this level of alignment is in place, companies tend to excel more holistically.
- Enable proactive decision-making – Informed with historic and current KPI performance empowers teams to proactively plan its actions — and not just react to significant problems. This data-driven approach leads to better service outcomes and fosters improved customer satisfaction over time.
Vital Steps to Build Right-Fit KPIs
First and foremost, it is essential to set realistic, actionable goals. Great insights reveal themselves in the incremental changes in measure behaviors. Until a team has enough data to predict performance changes based on any strategy shifts, it is recommended to establish realistic, achievable progress (progress over perfection).
It can be really challenging for a business to temper its goals as external pressures raise standards of excellence. And, often, in-house teams have significant bias on what they believe their teams can deliver. A trusted partner like Bonfire, can provide its expertise to ensure that your customer success KPIs don’t just track progress—they inspire it.
For any team metric to hold its merit it must align its KPIs with company objectives. Knowing and understanding these measurements is a first step towards leveraging them to inform strategic decisions—and then evaluate those choices.
It is critical to regularly review KPIs and determine what story they tell or what they leave out. With clearly articulated baselines, teams can iterate on which metrics make the most sense for the business. It’s this development of ongoing evaluation where teams start to drive long-lasting success.
Turning KPIs Into Action
While tracking and analyzing KPIs can seem daunting, it’s an endeavor that will support your team for the long haul. Bonfire’s customer success training programs are designed to help businesses like yours implement, understand, and act on the right KPIs.
Customer Success KPIs will become the building blocks for sustained growth and customer loyalty in your business. Explore how Bonfire has helped one client level up their customer service with over 700 employees across three locations, or start your own customer success journey with our Customer Service Essentials course.