KPI of the Day – Customer Service Performance (CS): % Customer complaints due to poor service or product quality
Definition
Measures the percentage of customer complaints registered by the organization, as a result of poor quality services or products, out of the total number of complaints received.
Purpose
To assess the level of customer dissatisfaction due to poor quality of services and/or products.
Recommendations
The customer complaints received should be regarded by the organization as an improvement opportunity. Once a complaint has been communicated, the company can gain back the client if it can successfully manage the inquiry. Complaints can also highlight some of the product or service’s shortcomings, which can be addressed in the future and eliminated.
This indicator allows the organization to compare the improvement of services offered to clients, from one period to another. Having quality assurance standards supports the prevention of dissatisfied clients due to poor quality of services and/or products.
In order for this indicator to be as relevant as possible, it is important to encourage feedback from customers and this information should be gathered in an organized manner. After the feedback is processed, future action steps should be taken in order to solve the complaints, but also to prevent future similar situations with the same customers or with others.
The targets to measure for this KPI depend on what procedures and strategies are in place, not only for delivering the expected quality to the customers but also towards the interaction, communication, and account management towards clients. If the level is higher than 50%, this indicator shows that most customer complaints are due to poor quality of services. When this happens, causes must be analyzed and eliminated through specific strategies.
For a continuous improvement of service and product quality, many organizations use the Plan-Do-Check-Act model, also known as the Deming Cycle. This model involves the following steps:
- Plan – in this stage the company should identify an opportunity and work out a plan for change;
- Do – implement the plan for change made in the Planning phase, in small steps;
- Check – use data analysis to see whether the plan contributes to actual change;
- Act – if the change is a success, it is implemented on a wider scale.
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