Today's customers expect more from the companies with which they interact. In response, organizations are adopting new ways of doing business and transforming the way they deliver value to their customers, leaving behind the more antiquated business models.
Customer support leaders have a role to play in their companies' pivots to an as-a-service business model and focus on digital. They are charged with aligning their customer support organizations' strategies with those of the business and can do so by effectively measuring and managing cost and scale, all while delivering organizational and customer value.
There are five key metrics that every B2B customer support organization should incorporate into its current measurements to gain a complete picture of the health and impact of the support organization. These metrics enable leaders to assess whether they have appropriate funding for their organizations, if they are using those resources to add value to customer relationships, and whether they are managing costs effectively by reducing cost per case while driving volume toward less expensive assisted service tiers and self-service for resolution.
Metric No. 1: Support Budget as a Percentage of Revenue (SBR)
SBR looks at the percentage of company revenue spent on customer support. Over time, this metric enables leaders to understand how the growth of the customer support organization compares to the overall growth trajectory of the firm as a whole, helping to ensure support has the funding to staff and serve customers effectively.
Company support spend should not be 1:1 to the company's growth rate (that is, as a company adds $1 of revenue, it should not be adding $1 of corresponding support budget). Instead, as the company grows, support spend should remain a consistent percentage of revenue, signifying that the customer support organization is scaling appropriately based on company growth. Consistency in SBR typically comes as the customer support organization matures and increases its technology spend to drive automation and self-service at scale.
To calculate SBR, divide total yearly support costs (e.g., analyst salary and benefits, travel, and IT costs, etc.) by total yearly revenue.
Metric No. 2: Value Enhancement Score (VES)
VES is a transactional metric that evaluates two key areas of customers' perceptions of products or services: how the support interaction affected their ability to use the product or service and their confidence in the purchasing decision.
It is the single best predictor of customer loyalty outcomes following a customer service interaction, such as retention, positive word of mouth and wallet share, and better than customer satisfaction (CSAT) and Net Promoter Score (NPS).
Gartner analysis reveals that increasing customers' positive feelings toward both concepts increases the value they derive from the purchased product or service. Customers are thus significantly more likely to renew their relationships with the company, advocate on behalf of the company, and increase spending on the company's products or services. From a business standpoint, VES is a great way for customer support leaders to highlight the value customer support brings to the organization and its financial goals specific to retention and expansion.
VES' calculation is a two-question index composed of the following Likert scale statements: "After the customer support interaction I am able to achieve more with the product or service..." and "After the customer support interaction my confidence in my decision to purchase this product or service is..." There are three practical uses of the VES metric: predicting customer behavior and tailoring interactions, determining which interactions are more conducive for increasing loyalty, and identifing which reps are skilled at delivering value.
Metric No. 3: Cost per Case (CpC)
CpC measures the total cost required to resolve a case. It is an important metric to track because it provides a unit cost perspective and can even be further broken down into its constituent parts for improvement, such as case resolution time or escalation rate.
Customer support organizations that are not actively working to drive down CpC and want to begin by identifying self-service candidates and automating will see near-term decreases in the CpC. Over time, as more volume is shifted into self-service or remediated altogether, a lower case-to-staff ratio will result in higher CpC. In addition, because more known issues are being automated, there are now more complex but fewer issues that require resolution from your support staff. CpC should be monitored as improvement initiatives are rolled out and strategy updated to reflect these changing conditions.
To calculate CpC, divide total monthly customer support budget by total monthly case volume.
Metric No. 4: Cases per X (CpX)
CpX measures case volume per dimension and is important because it quickly helps customer support leaders establish a normal and ideal overall case rate to quickly identify which products, customers, or subscriptions need further attention.
The X in CpX can be filled in with any specific product, customer, customer segment, business process (e.g., orders, billing) or other dimensions (e.g., releases, outages, trials, etc.) critical to the business. Gartner recommends customer support leaders use customers and products at a minimum.
The CpX goal is to reduce case volume by X by following a path to zero, moving more interactions upstream into self-service channels, into the product itself, and working with teams across the business to resolve issues at their root before they become cases.
To calculate CpX, divide cases per X by the total number of cases.
Metric No. 5: Level Solvable Rate (LSR)
LSR calculates the percentage of customer support inquiries that are answered by a customer support analyst in a group or tier of support that should have been resolved in the tier below or in the preceding tier. LSR is important to measure as indicates how well each tier of support is functioning relative to its role in the support resolution funnel. To help determine which types of inquiries should have been answered in the proceeding tier, start first by looking at inquiry types and knowledge articles and whether those knowledge articles were used and sufficient for addressing the inquiry type.
To calculate LSR, divide the number of cases in which the case should have been resolved by the tier below by the total tier volume.
John Quaglietta is a senior director analyst for the Gartner Customer Service and Support Planning and Operations team, covering topics such as CRM strategy and customer experience, service and support strategy and leadership, and more.