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Why and How To Measure Customer Support ROI

Customer Support Software

With customer experience research giants predicting CX to overtake price and product as the key brand differentiator by the year 2020, Customer Support department can no longer be considered as just a cost center. Companies that still consider customer support as a cost center fail to see how it adds to the bottom-line in long run. Businesses need to understand that retaining existing customers is equally important as acquiring new ones and is rather a less costly process.

Companies that understand the growing importance of delivering seamless customer experience to stay competitive will only emerge as the survivors in the dynamically changing environment. Customer service is no longer a mere support function catering to customers’ post purchase queries, in addition to retaining existing customers, it is impacting up selling, cross selling and eventually sales revenue in a big way. Selling to an already delighted customer is any day much easier than pitching to a new prospect. Therefore, overlooking customer service as just a support function with no focus or strategy in place on how to improve the support process can cost your business.

We live in exciting times where technology is changing the face of the business and every process that is crucial to thrive is digitally evolving to achieve operational and financial efficiency. To gain the first mover advantage, companies are implementing customer support technologies like Helpdesk software to elevate their customer service game.

But, before investing in any kind of customer support tools and technology to streamline the support process, you need to understand how better customer service can impact various business aspects.

Why Superior Customer Support is Crucial

To move over the old school ideology of considering customer service department as a cost center, the first step customer service leaders need to take is to prove its worth to the management by highlighting what customer support team brings to the table. Decision makers must understand the need to invest in customer support to leverage the existing customer base and to back this with data I have listed some crucial research statistics-

  • Customers who had the best past experiences spend 140% more compared to those who had the poorest past experience.
  • 23% of customers who had a good customer experience told 10+ people. 
  • It can cost 7x more to acquire new customers as compared to retaining an existing customer
  • Chances of selling to an existing customer are 60-70%, as compared to 5-20% in case of a new customer.

Measuring Customer Support Efforts To Improve Customer Service

Management thinker, Peter Drucker famously said “You can’t improve what you can’t measure” and this holds absolutely true for customer support efforts as well.

Customer support has been looked upon with a subjective view focussing more on the qualitative aspects, but performance of the customer service team needs to be measured quantitatively and numbers must be analysed and published. This will help the companies to see the direct impact of customer support on the business as well as help them identify the gaps.

Businesses plan the investments in processes and systems only when they see a positive return on investment (ROI), i.e. the benefits an organization will for investing in any kind of resource for the business.

Why Companies Need to Measure Customer Support ROI 

Companies that are not measuring the ROI in customer support lacks in justifying the need for investment in customer service process which will directly impact the service quality offered to the customers resulting in high customer churn, low employee productivity and decrease in operational efficiency.

Customer service teams that are taking up the task of crunching the numbers to reflect an actual return on investment, are playing an important role in budget allocation and are channeling investment for improving customer service infrastructure.

The crux is that you should be able to prove to the management that your customer support department is a profit center and more investment in customer support software, people and processes will eventually add to the revenue, reduce the operational costs and improve the overall customer experience.

How To Measure Customer Service Performance

Now coming to the most important part- how to calculate customer support ROI. You need to establish a standard process comprising three main steps for measuring ROI in customer service.

1. Identify Key Metrics

Every business has different factors impacting the overall growth and you need to identify such metrics to track how customer service team is influencing these key indicators. For instance some businesses would like to track-

  • Number of repeat purchases for existing customers
  • Plan or subscription upgrades for current customer base
  • Retention rate
  • Overall increase in Sales revenue
  • Reduction in Operational costs

The overall customer satisfaction and customer service quality can be easily measured by tracking the following key customer service metrics-

Customer Effort Score (CEC)Companies want their customers to effortlessly interact with them at every touch point, and CEC helps them to determine how much effort has been put by their customers to accomplish a task while interacting with them. To calculate CES, organization asks a question like: ‘The organization made it easy for me to handle my issue”.’ on a scale ranging from “Strongly disagree” to “Strongly agree.” Reducing customer effort by ensuring quick and easy resolution of their queries has proven to promote customer loyalty and retention.

Customer Satisfaction score (CSAT)Companies want to know whether the customers are satisfied with their products/services and CSAT score helps determine the customer satisfaction level for specific aspect of interacting with the brand like getting customer support for product exchange query, etc. It is calculated by sending automated surveys to customers asking them to rate their satisfaction level with respect to certain brand interactions on a scale of 1 (very unsatisfied) to 5 (very satisfied).

Net Promoter Score (NPS)Companies can measure their customer loyalty with the help of NPS, by determining how likely they are to recommend the brand to others and purchase from them in the future. NPS gives a bigger picture of the brand by considering overall customer experience in the long run. It is calculated by asking a simple question - How likely are you to recommend this brand to a friend or colleague?’ on a scale of 0 (not at all likely) and 10 (extremely likely). Subtracting the percentage of Detractors from the Promoters gives the NPS score

2. Set ROI Hypothesis

Once you have identified the key metrics the next step is to set the ROI hypothesis which means you have to set heuristic showing how various support activities  can impact return on investment. Take for instance-

  • If First call resolution (FCR) rate is higher than the average, then CSAT score during that particular period is x% along with an increase in retention rate.
  • Customers who gave a higher NPS score have more number of repeat purchases for that specific time frame.

If data reflects a direct correlation between the above stated metrics and customer service activities, then it would be a no-brainer to investment in customer support process.

3. Test and Refine 

Measuring customer service performance is a dynamic ongoing process and you need to test and analyze it continuously to track and map what factors are affecting the bottom-line and how you can fix the gaps for improved performance.

Customer expectations are changing swiftly with more exposure to technology and information and companies must foresee the requirement to stay competitive. Smart customer support solutions like Ticketing system are capable of not only streamlining and improving customer services process but measuring the impact and level of customer service delivered with the help of intuitive dashboards and analytics.

So, if measuring ROI in customer support is still not on your priority list, you better pull your socks up and start tracking how your key metrics are adding value to the bottom-line.

FusionCX-CTA


Topics: Customer Service Customer Support customer retention