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 some what substitutable products.
Customer service is typically measured as the rate of order fill. 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.
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.
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