KPI of the Day – Customer Service Performance: % Service charges of profits
Definition
Measures the extent at which the profits come from customer service charges.
Purpose
To indicate the value of the customer service charges contribution for each dollar value obtained as profit.
Recommendations
Successful service providers do not necessarily focus on setting profits goals. Instead, the focus goes on the frontline workers and customers. Customer service expenses are long-term and beneficial investments, as it has been evidenced that customers experiencing good service are likely to remain loyal and to further on recommend the product or service provided.
As such, investments are made in people and technology that supports frontline workers, with additional emphasis on recruiting and training opportunities. Many of the companies make use of the service-profit chain to create a relationship between profitability, productivity, customer loyalty, and employee satisfaction.
In the service-profit chain links are created between:
- Profit and growth, and customer loyalty;
- Customer loyalty and satisfaction;
- Customer satisfaction and value of services provided;
- Value of services and satisfied, loyal, productive staff;
- Employee satisfaction and service quality & policies.
Each of the links are interrelated and the results of one will have influence on the other. Moreover, accurately reporting on this KPI requires sound integration of the customer service management systems and the accounting systems.
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Our dedicated Library contains relevant resources to improve your KPI practices, and if you want to further improve your knowledge, feel free to explore our latest publications – The Sales and Customer Service KPI Dictionary and The Top 25 Customer Service KPIs – 2016 Extended Edition, or enroll in our Certified Customer Service Performance Professional course.
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