Every business owner knows that customer service can make or break your business, but understanding what makes great customer service is just the first piece of the puzzle.

Excellent customer service is the foundation of every successful business and is essential to keep a company growing. But apart from knowing what to say to appease a complaining customer or having a decent response time — how do you ensure that you’re hitting targets and staying ahead of the competition? This is where customer service benchmarking comes in.

What is customer service benchmarking?

Customer service benchmarking allows you to measure your team’s effectiveness and overall performance. It also gives you an idea of how your customer support team compares against others in your industry.

Metrics to measure

To effectively measure your team’s performance, you must set quantifiable metrics. Here are some examples of metrics for customer support teams:

• Average resolution time: Refers to how long it takes, on average, to solve a customer’s issue/query. A shorter resolution time indicates effective responses. However, many factors can affect the average resolution time, including the complexity of issues or even the lack of manpower. It’s vital to investigate significant changes in average resolution time.
• Average reply time: Tracks the average time it takes to respond to a customer’s message. A shorter time between responses is ideal.
• First contact resolution rate: Measures the percentage of inquiries or problems resolved in a single reply. While it’s rare to solve customer issues in the first response, this is often achieved for minor tickets. A high first-contact resolution rate can increase customer satisfaction and employee productivity. However, a number that’s too high might mean you need to beef up your FAQ page. You don’t want customers turning to your customer support inbox for every simple question.
• Ticket volume: Refers to the total number of messages in your customer support mailbox.
• Ticket backlog: Refers to the total number of unresolved queries in your customer support mailbox. Your goal should be to have more resolved tickets than open conversations. Otherwise, you’re catching up on tickets from the previous day or week.
• Customer satisfaction score (CSC): Measures the percentage of good or bad customer feedback. Research by Hiver found that 41 per cent of customer support professionals consider this their most important metric. A survey is usually sent to customers wherein they can rate their satisfaction after talking to customer support.
• Net promoter score (NPS): Measures the likelihood of receiving a recommendation from existing customers. To find your NPS, you need to send an NPS survey. A score above 50 is considered excellent, while anything over 80 is world-class.

Why is customer service benchmarking important?

The quality of your customer service team could dictate whether someone decides to support your brand. As a team essential to your company’s growth, it’s imperative to measure its performance just as you would your marketing and sales teams.

1. It helps you set goals

Without benchmarking your customer support team, you may be setting goals that are either below industry standards or have goals that do not make sense. Benchmarking also allows you to set more specific and measurable goals that can be quantified.

2. Know where you need to improve

Knowing how your team compares to others in the industry may help you identify areas where you need improvement that you otherwise may have yet to learn about. For example, you may think that your average customer resolution time is good because it has improved from previous months.

Or, if you’re running an eCommerce store, you could be faced with the bullwhip effect — the process of rapid swings in demand that result in product shortages and supply chain bottlenecks. Supply shortages result in disgruntled customers, negatively impact sales, and will decrease customer satisfaction if they cannot get the products they want to purchase.

It is crucial to know what areas of your business to improve and have a benchmark to compare your business to its competitors. That’s because a business might be below standard and unaware of a particular issue if they do not have a benchmark to compare themselves with.

3. Keep updated on the best practices

Stay on top of the latest innovations and best practices to keep up and get ahead. Benchmarking allows you to prepare your team for growth and constant improvement. Keep in mind that best practices may vary between industries. It will also ensure that your team isn’t left behind and your customers are always satisfied. Most importantly, it will inspire your team to look beyond themselves and aspire to become the best in the industry.

4. Data-based performance review

Performance reviews can quickly become subjective and muddled with unrealistic key performance indicators (KPIs) without customer service benchmarking.

5. Easily monitor progress

Customer service benchmarking allows you to set quantifiable goals to help you determine midway if you’re striving to achieve them. You can use several tools to set a clear benchmark, and the starting point will enable teams to make valuable pivots before it’s too late.

Customer service benchmarking within your company will provide measurable data to determine what areas you excel at and need improvement. It gives team members a shared goal and a shared strategy to use. On the other hand, looking beyond your company will help you gauge where you stand against the competition and know what you must do to keep growing and get ahead.

This article first appeared on Flying Solo and has been republished here with permission.