what is a KPI

What is a Key Performance Indicator?

A key performance indicator is a measurement that indicates how well a business is reaching important objectives. Incorporating smart KPIs into everyday interactions should increase customer satisfaction and, in a broad sense, a company’s bottom line.

For inbound contact centers those KPIs usually relate to how quickly and how effectively customer needs are met. 

What are the best contact center KPIs? 

Choosing the right KPIs for a contact center can be challenging. It often becomes a balancing act between the short-term limitations of the business (budget, staffing etc.) and the customer expectations for rapid, effective and personalized service.

There can also be second order effects to measuring the wrong KPIs or enforcing them too zealously. For example, a contact center may attempt to reduce waiting time and serve more customers by encouraging agents to work more quickly. 

However, this approach often leads to a poor rate of First Contact Resolution. The result is that customers have to make contact a second or third time, increasing the cost of service and driving up waiting times. 

Here are some of the most effective KPIs that contact centers track. 

Average Speed of Answer

Average Speed of Answer measures how long a customer has to wait for an agent once they have been routed to the contact center. 

This metric is tracked continuously and most contact centers will have an 80/20 service level agreement i.e 80% of calls should be answered within 20 seconds. 

Call Transfer Rate

Transfer rate measures the number of times a call is transferred before it lands with the agent who is able to resolve the call. 

This is important because multiple transfers have an extremely negative impact on customer satisfaction. 

A high transfer rate is generally indicative of either poorly trained agents or a weak call routing methodology.  

Average Hold Time

Customers hate waiting on hold! Although this is sometimes an unavoidable part of service, hold time must be closely monitored. 

One alternative to placing customers on hold is virtual queuing; this allows customers to hang up rather than waiting, receiving a callback once an agent is available. 

Average hold time is calculated by dividing the total time callers spend waiting by the total number of calls answered.

Why do KPIs matter?

It’s been said many times before: you can’t change what you can’t measure. Selecting and measuring the right KPIs is the number one most important step towards CX success. 

The right mix of KPIs will track operational performance, cost and customer sentiment. The goal is to get reliable and usable information that will track your past performance and guide your future performance. 

However, it is vitally important to understand how different KPIs can influence one another. Ultimately, businesses tend to find the most success when they put their customers first and do not build their strategy around a low cost ceiling!

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