Customer Service Level: Formula and Tips

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As every organization has the goal to achieve higher performance rates and a better level of service quality, there is an exact need to use defined scores to measure the performance of the business. This is also the main goal of call center performance metrics, and despite them, one of the main tools to control a unit’s productivity and efficiency is the call center service level.  On the contrary, every enterprise is unique in its operations, goals, customer service methods, and other aspects which make evaluating the organization’s performance a more complicated task than it can be imagined. The industry generally accepted service level standards don’t work in the same way for every company too, and this is a popular mistake when managers take the scores from the Internet - such as the standard 90% occupancy rate or classic 80/20 call center rule - and implement them as standards without taking into consideration specifics and individual requirements of their enterprise.  Nonetheless, the call center service level is an irreplaceable tool if you want to achieve the expected performance scores and keep all call center operations under control. But what is the service level in a call center? What is the optimal service level formula? What is the service level target? And, finally, why should you measure the call center service level?  We’ll do our best to answer these questions, so make yourself more comfortable and keep reading - here the call center service level guide begins. 

What is the service level for the call center industry? 

The service level is the indicator of the number of achieved KPIs as a percentage of the number of set KPIs. In the contact center niche, it is mostly used to show the percentage of incoming calls answered by the operators during a preselected period of time. 

The period of time means the tiniest duration of a call. 

As you can see, the call center service level has a strong influence on customer satisfaction, agent productivity, and customer experience. Thanks to the service level in the call center you can see the entire picture of agent performance and make necessary adjustments to improve customer assistance. 

What is the call center service level calculation? 

Even though we have already stated that business goals, industry specifics, and methods of service providing differ, the service level calculation remains the same. Use the formula below to discover your call center service level.

Select the call center service level target

Different enterprises have distinct requirements, needs, and target audiences, as well as the service and products also can differ widely. For some firms, resolving customer problems can be a higher priority than answering all calls, for instance, such industries as financial or real estate require fast resolution of customer requests because of extremely high competition across the niche and the high value of each client. On the other hand, e-commerce or shipping companies are more interested in answering all requests than in fast issue resolution.

Finally, the call center service level rate can differ a few times depending on the goals and priorities of the business. 

Choose the start of the countdown and the deadline

It can sound surprising, but approaches to the selection of countdown starting points are dissimilar. Some managers choose the moment of ACD entering as the point to begin the countdown, others use the last IVR answer or ending of the greeting message during waiting in a call queue. The generally accepted deadline to answer the call is twenty seconds, and we also advise using this approach. 

At this stage, count how many incoming calls are answered from the starting second of the countdown and during the next twenty seconds - this would be the fundamental of your call center service level measurement. 

Think of the time span

Another vital thing to think about is the time span of counting the call center service level. You can measure it by seconds, minutes, hours, days, or even months - or use every span simultaneously. 

Contact centers that strongly depend on high call center service level rates measure it almost permanently to avoid any subsidence of indicators, while others that operate the call center service level only as an additional metric measure it once a month. 

To choose the correct span, take into consideration your business objectives and needs.

Gather information

You have to gather a few important rates: overall numbers of answered and abandoned calls, and the number of abandoned and processed calls that meet deadline requirements. 

This data is almost always available in call center software dashboards and insights, so there is no need to spend hours gathering it. 

Start measuring

Before you will come to calculate the call center service level, you have to decide what to do with abandoned calls. There are two main approaches to such contacts - either ignore them or take them into account and include them in measurement. 

First of all, let’s deal with the definition of the abandoned call. Abandoned calls are customer calls that are hung up before linkage with the operator - because of too long call queues, customer frustration, the anger of too complicated IVR system menu, and so on. 

As we have said above, there are two approaches to either include or not include these contacts in call center service level calculation. First of them advises you to take abandoned calls as failed opportunities, as they could become successful for the business and end as a conversion or have a positive influence on customer satisfaction and experience, as well as on customer loyalty. In this case, the abandon rate would negatively affect your call center service level.

Another, diametrically opposite approach states that all abandoned calls are absolutely insignificant for the organization and there is no necessity to take them into account when measuring call center service level. According to this model, the abandonment rate isn’t even included in any call center evaluations.

There is also one more approach to abandoned calls - when they are taken as a positive effect on service level. How does it work? Some units have extremely short waiting times, so if the call is abandoned, it is understood as a consequence of a bad connection, issues with the cellular network, or other factors that aren’t the call center’s fault. In this calculation, all abandoned calls are counted as processed, even if they are not. Nonetheless, such an approach should be determined as rare and exotic more than a valuable and influential one. 

Our opinion is to use the first model of counting abandoned calls, as no customers call and stay in a queue without valuable reasons. What’s even more improbable is that it is always better to overdo than not to overdo.

Move to the next stage of calculating

When you are over with abandoned contacts, it is time to use the formula and start the calculation itself. 

The formula is quite simple: we have to divide the number of inbound calls processed in the time limit frame, by the overall call volume for the selected time period. 

Let’s use the formula to calculate it on a real sample. Let’s imagine you get 1000 calls in one hour, and the deadline for answering is 20 seconds. 

Inside these 1000 calls, you have: 500 calls answered, 350 of them are answered within the deadline, and 50 calls are abandoned. 

Here we get the formula:

Service Level = (overall number of calls answered before deadline/ total answered calls + abandoned calls) * 100%

So, we get: 350/550 * 100% = 63,6%

In the case of ignoring abandoned calls, just don’t include them in the formula. If we talk about using abandoned calls as a positive influence on the service level, we have to divide them into two groups: abandoned before the deadline and after its end. That’s how it would work if we take into account that from our 50 abandoned deadlines, 20 were abandoned within 20 seconds, and 30 were abandoned in a longer period of time. 

So, here’s the formula:

Service Level = (overall number of calls answered before deadline + calls abandoned within deadline/all answered calls + all abandoned calls) *100% 

What do we get? 350+20/500+50 = 370/550 = 67,3% 

Think of the next steps and potential changes

When you have your service level scores on the screen, and you clearly know your service level objective, it is time to think about the strategy and future actions on the way to expected rates. 

What to do first of all?

Well, try to measure agents’ individual performance scores by gathering call recordings and understanding the lack of skills or areas of improvement. Think of implementing new features or self-service options to reduce call volumes. Look at workforce management strategies and find out if is scheduling comfortable for agents or maybe switching to a hybrid model would be more effective. 

Try to compare service level to other metrics, such as AWT or AHT to understand where lies the issue. And, what is even more vital, set the appropriate service level target to avoid agent burnout or, vice versa, too slow and unproductive service.

How to choose the right service level target? 

There is one generally accepted service level target that is often picked up and implemented by careless managers who just do what others say. This standard is called the 80/20 call center rule, and it is totally outdated and inefficient, and we’re going to tell why. 

No one surely knows who created this rule, but there are some trustful versions: either it was Rockwell in the early 70-s or AT&T in one of its studies in the same old-but-gold times. As you can see, it is not the wisest thing to follow a rule that is almost as old as the industry itself. Those times were absolutely dissimilar from today’s: other workforce models, other technological solutions, other business goals, and requirements. 

Another problem is that this standard isn’t universally applicable for any business and it still doesn’t answer some crucial questions - what is about 20% of unanswered calls, how to be with call volumes, and so on? Additionally, call center managers all around the world focus on customer satisfaction and FCR, not on service level. The 80/20 rule doesn’t correlate with customer satisfaction, it just shows how many calls are answered, so the value of this method decreases. 

But if the 80/20 rule doesn’t work, what is my perfect service level target?

Even though we have stated that most call center leaders focus on customer satisfaction, service level target is still a significant rate as it influences customer experience and is one of the most crucial for controlling agent performance and overall unit performance. 

There are two approaches to selecting an individually fitting service level target, and both of them are based on the 80/20 rule - because it’s the measurement starting point. As you could guess, one of the approaches offers to decrease pressure on agents, while another proposes to boost it. 

Let’s discuss both methods in detail. 

Reducing the requirements

Almost all call centers know that horrible word “agent attrition”. This industry has always suffered from high turnover rates, so many managers bet on building a stable team and saving experienced staff instead of chasing illusory metrics. Thus, decreasing requirements up to 75/25 or even 80/40 is acceptable, everything relies on the target audience. If the business requirements and customer surveys allow you to stay sure that longer queue time wouldn’t harm overall performance, then focusing on lower agents’ unload can be justified. Anyhow, you have to sit down and evaluate what would cause more losses: agent burnouts or longer call queues. Another positive outcome of lowering the service level target is lower operational and labor costs - fewer standards, and fewer agents to pay. 

Increased service level target

Anyhow, there are always organizations that try to do their best - no matter how effortful and stressful it would be. Nonetheless, it is a great challenge to perform better than the 80/20 rate, and not every employee would be satisfied with such pressure and the company’s requirements.

There is no bad without good, anyway. By increasing the service level target requirements, you would get a better customer experience caused by shortening the call queue times, and reduced abandonment rate, as well as higher customer loyalty, and indirectly boosted customer satisfaction. 

Some tips to meet your service level target faster and with lower effort 

Well, it is not enough to just set up the service level goals - the main challenge is to meet them. Here you may need a little assistance, and we are here to help you deal with it. Let’s discover a short list of tips and tricks to speed up the service level target achievement. 

Build a strong team

No matter whether are you going to reduce or boost the service level requirements, you will only achieve the expected results with experienced, cooperative, and skillful team members. Agents are those who are directly responsible for reaching service level targets, and this is they have to answer those calls during the 15 or 20-second deadline. 

If you hire newbies, do nothing about their onboarding, training, or knowledge base accessibility, and then just make them meet service level expectations, they will simply dismiss in the next three months. If you have boosted the service level target, then think of a rewards system for agents and provide them with additional training sessions to assist them in gaining new skills and dealing with pressure. Hybrid scheduling is also a great way to empower agents, as it would be less effortful for them to achieve high-standard requirements if they have the option to work in a comfortable atmosphere.

Eliminate unnecessary requests

High service level metrics exist not to contain tackling elementary customer requests. What is the purpose of the 80/20 rule if half of these 80% calls are about business hours or business locations? 

Provide customers with the best self-service options to make them avoid calling you with routine inquiries. Let people know your working hours or office geolocation via an IVR system, website, or chatbot. Routine inquiries like achieving a price list or ordering a callback should also be available everywhere, but not by calling the operator. Save agents’ time for more crucial challenges. 

Compare service level rate with other metrics and use them in collaboration

If there is something wrong with the service level score, or you just want to achieve your objectives faster, look at other metrics that have a powerful influence on service level scores. These metrics include Average Handle Time, Average Response Rate, schedule adherence, Average Speed of Answer, and so on. If you discover problems with these rates, it won’t be difficult to improve the service level score. 

Use really qualitative tools

To achieve the highest call center performance rates and the best quality of service you require an all-in-one call center solution that would cover your necessities and needs. It has to provide an omnichannel model of customer service, self-service options, wide reporting and insights, powerful monitoring functions, and third-party software integrations.

It can be challenging to select a really great software solution, but we can eliminate this risk - just use the link below to discover all features of VoIPTime Cloud Contact Center Solution that bears all modern customer service features and will easily help you in meeting your service level target. 

Eugene Siuch

Content Manager and Copywriter

Focused on customer service measurement and improvement, SaaS marketing and industry insights, and researching different methods of staff motivation and performance management in the field of customer service providing.

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