KM and Customer Service Key Performance Indicators

This article is part of the Best Practices White Paper KM for Customer Service [April 2009]


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Given the harsh economy, service organizations face enormous pressure to provide exceptional customer service at lower cost. Organizations are struggling to deliver interactions that drive customer satisfaction and retention with fewer resources and dollars.

Knowledge management (KM) has repeatedly proven its ability to simultaneously improve service quality and reduce costs, and the ROI of a knowledgebase is well documented. The Service & Support Professionals Association (SSPA) points to greater productivity, lower interaction volumes, higher customer satisfaction and additional product revenue as some of the key benefits of a KM investment.

One of the best ways to make sure that your investment will pay off with higher customer sat scores and lower costs is to align your KM initiative with the key performance indicators (KPIs) that govern your service operation. Let’s examine KM’s relationship to three KPIs: inquiry resolution, service consistency and response quality.

Rapid Inquiry Resolution
Data from ServiceXRG shows an incident resolved at first contact costs $49, but at 24 hours the cost is $61, and at two days it is $155, and the cost continues to increase the longer the incident remains unresolved. Unresolved incidents can be just as costly in terms of customer dissatisfaction. An Accenture consumer study identified resolution on first contact as the most important service issue to consumers.

The SSPA has demonstrated that a knowledgebase can dramatically reduce handle time and increase first-contact resolution. However, achieving these results requires the knowledgebase to have the "right" knowledge to support service interactions. Unfortunately, what constitutes the "right" knowledge is often a moving target—knowledge quickly becomes out-of date, inaccurate and incomplete. And when knowledge is not effectively maintained, service agents will embrace any source when they need to answer a question. Over time, this produces a body of suspect knowledge that negatively impacts first-contact resolution, handle time, productivity and customer satisfaction.

Improving inquiry resolution depends on developing a long-term commitment and sustainable process for continuous knowledge development. This process should facilitate analysis to determine what knowledge works well and what needs improvement, increase the findability of information, identify knowledge gaps and retire out-of-date or inaccurate knowledge on an ongoing basis.

By recognizing that KM is not a "once and done" initiative, credit union BECU has implemented just such a sustainable process for knowledge improvement. The process supports BECU’s strategic goal to shift its service culture from one where employees spend a lot of time trying to find the right information, to one of accessing that information very quickly. As a result, the credit union has experienced a 50% drop in error rates for loan processing, and its staff can now spend more time focused on the customers’ needs and experience.

Service Consistency
The explosion of online channels has radically altered the way customer service is delivered. Many customers now live a multi-channel life, switching from the Web to the phone or online chat and back to the Web—all in search of the answer they need at a particular moment in time.

This channel hopping requires a unified knowledgebase so that all users are working from the same body of information. Whether a consumer is reviewing a Web FAQ or engaged in an online chat with an agent, the underlying answer should be the same. It will be important to segment the knowledgebase according to the user or role. For example, self-service customers do not need access to highly technical articles that tier-two agents require. But where knowledge needs overlap, the information must be the same no matter which channel delivers the answer.

Unified knowledge helps customers gain confidence in online channels because they can trust that an email interaction will produce the same response as talking to an agent on the phone. This can go a long way to meeting the twin goals of higher quality service and reduced costs, as channel-agnostic knowledge encourages adoption of lower-cost online options like self-service. A unified knowledgebase also cuts costs by eliminating the time and risk associated with creating and maintaining duplicate information.

Response Quality
Early 20th century author Clarence Day must have known about Web. 2.0 when he said, "Information’s pretty thin stuff unless mixed with experience." This is particularly true today as consumers now place great value on the experiences and commentary of fellow consumers. They have come to regard the effectiveness of response as not just an answer from the company, but the ability to access a broad range of related information that adds value and increases understanding.

KM must adapt so that many users can contribute to and benefit from the collective wisdom and experiences of the community. The role of KM must shift from simply the central information repository developed by the company to a primary tool for information interactivity. As a result, collaboration and community will become as fundamental to KM as wheels are to cars. You can start by opening your knowledgebase to encourage dialog between users with the aim of offering more relevant content. Participation should be encouraged by providing easily accessible, simple-to-use tools for content creation, feedback, comments, ratings and forums.

By closely aligning your knowledge management initiative with the key performance indicators for your service organization, KM can become a strategic resource, enabling your organization to function with the highest degree of efficiency and productivity, while delivering an always satisfying customer experience that leads to greater brand loyalty and repeat purchases.


nGenera Customer Interaction Management (formerly Talisma) is a global leader in next-generation customer experience solutions. Customers report increased customer satisfaction and measurable cost savings within six months of deployment. With 250% customer growth over three years, companies trust their customer experiences to nGenera CIM. Visit cim.ngenera.com for more information.


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