Customer service levels measure the ability of a value chain to satisfy customer demand.
If your products are even remotely substitutable, and in a competitive market, good customer service is invaluable.
Even if you are a near monopoly, bad customer service often irritates customers and they will look for the closest opportunity to switch suppliers with somewhat substitutable products.
Customer service is measured using a variety of metrics – Line Fill Rate, Order Fill or Perfect Order, On-time delivery, Dollar Fill Rate, and Unit Fill Rate. It is typically measured as Line Fill Rate (LIFR). The true measure of customer service is really the degree of success you achieve on every opportunity to interface with your customer. Only complete satisfaction is recorded as a win, NOT partial resolutions. The below chart provides a hierarchical drill-down into service failure.
Customer service is a product of many functions. When there is a service failure, you want to look at the root causes for the failure. A service failure can be caused by an execution failure or lack of demand visibility into the future. When we do the analysis for our clients, we typically find that the majority of the service failures were either caused either by demand forecast or Schedule Adherence.
You can refer to our consulting page to review our offerings to help you improve fill rates through better demand forecasting and deployment. You can also download our metrics template that provides you with the calculation details of many demand forecast metrics.
For a call center, the number of calls where the customer’s questions were completely resolved on the first call will measure your success rate versus the total number of calls. If the response was a call back by another rep, it should not count in your measure.
Customer service metrics are extremely important in keeping the goodwill and loyalty of customers. This ensures repeat business and perhaps additional business through referrals from happy customers.
Contact Us for additional information regarding our consulting services and to specifically talk about call center forecasting and performance metrics.