Complaints Management KPIs You Need To Track

Identifying and tracking the right KPIs is key to improving your complaints process – and delivering beneficial outcomes that raise your department’s profile. Unfortunately, when it comes to selecting KPIs, differentiating between important indicators and noise can be surprisingly difficult.

Surface-level resources often promote traditional metrics like volume or resolution time, but fixating on these metrics can be counterproductive. They offer a snapshot of operational activity, but don’t capture the nuances of customer experience, or enable you to drill down and understand the strengths and weaknesses of your current processes. 

Critically, honing in on operational metrics like case volume or resolution time at the expense of more meaningful KPIs can also frustrate efforts to understand and report on the wider impact of your department’s hard work. 

To make sure this doesn’t happen, we’ve pulled together this article, which draws on thought leadership from organisations like the Scottish Public Services Ombudsman (SPSO), and delves into a more sophisticated approach to identifying and tracking KPIs – exploring how a systems thinking lens, coupled with an understanding of industry regulations and best practices, can unlock deeper insights and drive meaningful improvements.

The Limitations of Traditional Complaints Metrics

Some complaints teams try to measure their performance using metrics like:

• Complaint Volume
• Resolution Time
• First Contact Resolution (FCR)

These metrics are all important in their own right, but they’re not good KPIs. For starters, they tell you what happened, rather than why. They also focus attention on the minutia of internal processes, rather than encouraging a wider perspective. 

To illustrate the point, let’s look at complaint volume. From a resource planning perspective, you need to be able to track and model the number of complaints your department’s fielding at any given time. There’s also some utility in being able to spot a trend (like rising volume). 

But complaint volume on its own provides limited insight into the root causes. It also says nothing about the effectiveness of your resolution strategies, your department’s capabilities or the resolutions you are providing. 

Attempts to use it to diagnose or even spot problems will often fail because it cannot account for external stressors like marketing campaigns – or a seasonal trend. 

Honing in on a metric like average resolution time is dangerous too – Yes, groups like Insight Worthy are right to point out that quick resolution times are generally associated with better outcomes and higher customer satisfaction metrics.

But complaints departments that focus on timescales at the expense of more holistic KPIs run the risk of incentivising quick fixes, rather than thorough investigations. In the long run, this can actually decrease customer satisfaction and lead to repeat complaints. 

Resolution time is a lag indicator too – useless for proactive attempts to improve your processes.

On FCR or first contact resolution, the less said the better. Unless you are solely focused on improving operational efficiency or cutting the costs associated with followup interactions, encouraging frontline staff members to resolve a complaint on the first call is generally unwise. 

Bread and butter complaints are (generally) straightforward, but complex issues do arise. To deliver consistently-good resolutions that maintain or improve your brand’s reputation, you need to investigate, liaise and debate, which is why it’s generally counterproductive to over-emphasise efficiency metrics. 

Embracing a More Holistic Approach

As the Australian Prevention Partnership Centre points out here, a systems thinking approach encourages us to look at the bigger picture. In a complaints context, this means recognising that complaints are not isolated events – and embracing the idea that the right KPIs tell us something meaningful about how our complaints management system is functioning as a whole. 

This perspective emphasizes interconnectedness, and the importance of understanding the entire customer journey. Instead of simply treating individual symptoms and obsessing over lag indicators, we aim to drill down on - and address-  the root causes of problems within the system.  

Applying this to complaints management KPIs means moving beyond simple counts and averages to explore relationships and patterns. We need to ask questions like:

• What are the common themes and patterns across complaints? Are there specific product lines, service areas, or customer segments that generate a disproportionate number of complaints?
• How do different parts of the organisation interact to contribute to or resolve complaints? Are there communication breakdowns or process inefficiencies that hinder effective resolution?
• What are the long-term consequences of unresolved complaints? How do they impact customer loyalty, brand reputation, and ultimately, the bottom line?

Complaint Management KPIs for a Holistic View

To answer these questions, we need a broader set of metrics, capable of providing a more holistic view of the complaints management system. Note that you can’t really track one of these metrics in isolation: You need a range of the following, tracked and measured consistently to ensure that you can interrogate your data and generate meaningful insights. 

The SPSO and the Scottish Social Services Council recommend tracking the following three metrics:

1. Resolution Time By Complaint Stage

A clunky name, maybe it’d be best to talk about complaint cycle times, but the idea is a powerful one. Instead of simply tracking the time it takes to fully resolve a complaint, you track and analyse the amount of time it took complaints to move through each stage of your complaints management process (eg. frontline complaints, complaints escalated to a specific team etc), and how long it took to fully resolve complaints that ended at each of the same. 

With this data to hand, you can spot bottlenecks, or drill down on common sticking points. You have the detail needed to develop a holistic view and you can report on things like resolution rates for simple complaints vs. resolution rates for complex cases without spending hours pouring through individual case logs. 

Tracking resolution time by stage also enables you to better track compliance with any legislation that demands escalations within a specific number of days, such as the FCA’s complaint handling rules.

2. Response Time By Complaint Stage

For example, if you know that 20% of complex cases stall at stage 2 of your process, but you also know that your team members are being proactive and emailing customers in good time, you can identify a problem with the time it takes customers to provide supporting evidence and try to implement a system that expedites this process. 

In the round, it’s all about recording data that gives you context and facilitates deeper analysis.

3. Outcomes By Complaint Stage

Finally, the SPSO recommends that you track and report on all outcomes at each stage of the process so that you can fully understand what’s happening on the ground – and spot any patterns in the cause and outcomes of various complaint types.

For example, knowing that 50% of complaints about a specific department were either upheld or partially upheld would help you to identify a systemic problem in that department, or at least lend credence to the idea of doing a wider review. Conversely, if 0% of stage 2 complaints are upheld at all, you might have a problem with your escalation process, or be delivering suboptimal outcomes due to rushed or botched investigations.

It’s impossible to guess at what the data might reveal, but crucial that you gather, track and analyse this information to drive quality improvement and ensure that your processes and team are functioning well.

Other Important Complaint Management KPIs

The SPSO model complaints handling process is universally applicable, but it is focused on public sector organisations and is by no means exhaustive. Best practice guides make it clear that organisations should also consider KPIs like:

• Customer Satisfaction (CSAT): Measuring CSAT specifically after a complaint interaction provides valuable feedback on the effectiveness of the resolution process. This can be done through post-complaint surveys, focusing on aspects like empathy, communication, and perceived fairness.

Linking CSAT scores to specific complaint types or resolution strategies, or looking at changes to average CSAT score over time can reveal areas for improvement, and gathering CSAT scores for every complaint means you’ll then have the rich and detailed data needed to drill down and analyse causes etc.

• Net Promoter Score (NPS): While NPS is a broader measure of customer loyalty, tracking its change in relation to complaint experiences can be insightful. A decline in NPS following a complaint suggests that the handling process is damaging customer relationships, while an increase implies that your complaints handling process is doing a good job of improving brand reputation and winning customers back.

This trend speaks to the idea that transparent and timely complaints management fosters trust and increases customer loyalty, which is something you’ll definitely want to be able to report on.

• Cost of Complaints: Calculating the total cost associated with handling complaints, including staff time, investigation costs, compensation, and lost revenue is an important part of building trust with management and it’s also a key part of demonstrating value: If you know that complaints are improving loyalty (via an increase in NPS or CSAT after a complaint), and you also know that the cost of handling the complaint was fairly small, you can make a strong case for your team.

If the opposite is true, you can also spot inefficiencies and start thinking about how to reign in your spending. It’s all important, and key to building a more robust process.

• Employee Satisfaction (ESAT) in Complaints Handling Teams: High ESAT among complaints handling staff can correlate with improved customer experience and more effective resolution. Diagnosing low ESATs can also help you to identify potential issues related to workload, training, or support, allowing for targeted interventions. 

Again, it’s not an obvious thing to track, but team engagement has a direct impact on the quality of your resolutions. For more information, see this detailed guide by Userpilot.

• Regulatory Compliance Metrics: Tracking compliance with relevant regulations (e.g., response time requirements, data privacy regulations) is essential. This involves monitoring adherence to internal policies and external legal frameworks, ensuring that complaints are handled in a compliant manner. Metrics should demonstrate compliance with these requirements and track any breaches or potential risks. 

 

• Data Quality Metrics: The accuracy and completeness of complaint data are fundamental to effective analysis. Metrics should assess the quality of data entered into the complaints management system, including the completeness of fields, the consistency of classifications, and the accuracy of information. Poor data quality can lead to flawed analysis and ineffective decision-making.  

Connecting Your Complaint KPIs to Business Outcomes

KPIs are the foundation of any quality improvement program, but they’re also important in that they allow you to demonstrate the value you and your team bring to the wider organisation. 

Before we start talking about how to implement and monitor the KPIs outlined above, we wanted to stress the importance of connecting them to specific outcomes – and measuring these outcomes so that you can make the case for all the hard work you do.

Generally speaking, good complaints management delivers: 

• Reduced Customer Churn: By improving complaint handling and addressing root causes, organisations can reduce customer churn and increase customer lifetime value. 

• Improved Brand Reputation: Positive complaint experiences can enhance brand reputation and build customer trust. 

• Increased Operational Efficiency: Streamlining processes and reducing recurring complaints can lead to significant cost savings and improved operational efficiency. 

• Enhanced Product/Service Quality: Analysing complaint data can provide valuable insights into product or service weaknesses, leading to improvements in quality and design. 

• Reduced Regulatory Risk: Effective complaints management can help organisations mitigate regulatory risks and avoid penalties.  

If you can start tracking customer churn, regulatory compliance, or brand reputation (via those all-important NPS scores) you can prove that they correlate with improvements in your own KPIs, and demonstrate the benefits of further investing in - or improving - the complaints management process.

Implementing and Monitoring Complaint Management KPIs

Implementing a comprehensive set of KPIs requires careful planning and execution. The ins and outs will vary according to your organisational structure and the way you track and manage complaints, but assuming that you are overseeing a single complaint or customer satisfaction team and use modern complaints management software, the best approach is outlined below:

1. Define Clear Objectives: What are you trying to achieve with your complaints management system? What specific outcomes do you want to improve?

2. Select Relevant Metrics: Choose metrics that align with your objectives and provide meaningful insights into the performance of your system.

3. Establish Baseline Data: Collect historical data to establish a baseline against which future performance can be measured, or start measuring for a month so that you have a current baseline.

4. Develop Reporting Mechanisms: Create clear and concise reports that communicate the key metrics to relevant stakeholders, including deviations from baseline and how/what may have triggered them. 

5. Track, Measure, Refine: KPIs are only useful if they’re used. Make sure you schedule in regular sessions to review your data, dig into trends and collate the information needed to drive strategic improvements. 

The goal here is to level up your complaints management, and expose the real-world value of the work you do, which means engaging in the process and being proactive about the reporting element of your role. 

Conclusion

Moving beyond traditional metrics and embracing a systems thinking approach is essential. By focusing on a broader set of KPIs that captures the full customer experience, identifies root causes, and connects your work to business outcomes, you can unlock deeper insights, drive meaningful improvements, and prove that you are key to the success of your organisation.

It’s not without its challenges, but adopting a data-driven approach, and committing to continuous improvement, will ultimately lead to more efficient operations, more satisfied customers, and a stronger, more resilient business.