Outsourcing your customer service without a robust measurement framework means flying blind. Yet many companies sign BPO contracts without having precisely defined the indicators that will serve as the contractual baseline — or as evidence in the event of underperformance. Here are the essential KPIs, how to build them into your SLAs, and how to use them to manage your provider effectively over time.
These two terms are frequently confused but refer to different realities.
A KPI (Key Performance Indicator) is a performance metric you track to understand how your customer service is functioning. It serves to measure, analyse, and inform decisions.
An SLA (Service Level Agreement) is a contractual commitment to a minimum performance level. If the provider fails to meet an SLA, financial penalties apply. It is the contractual translation of a KPI.
Example: your KPI is the answer rate. Your SLA states that 90% of calls must be answered within 30 seconds. Below that threshold, a penalty of X% of the monthly invoice applies.
The most direct indicator: after an interaction, the customer rates their satisfaction on a scale of 1 to 5 or 1 to 10. CSAT measures the perceived quality of the individual interaction. A global CSAT below 80% is generally a serious warning signal that warrants immediate investigation.
To contractualise: minimum monthly CSAT by channel (voice, email, chat), measured on a statistically representative sample.
NPS measures the likelihood that a customer would recommend your company, on a scale of 0 to 10. Less sensitive to individual interactions than CSAT, it reflects the overall relationship more broadly. Useful for measuring the long-term impact of your BPO provider on customer loyalty.
Less well-known but highly revealing: CES measures the effort a customer had to exert to resolve their issue. A high CES (high effort) is strongly correlated with churn. If your provider resolves issues but forces customers to call back three times, CES will detect it before CSAT does — making it a valuable early warning indicator.
Service Level measures the percentage of calls answered within a defined time window. The European market standard is typically 80% of calls answered within 20 seconds, or 90% within 30 seconds. This is one of the most common SLAs in BPO contracts across the UK, France, and Germany.
FCR measures the proportion of interactions where the customer’s issue is resolved without them needing to call back or re-contact on another channel. It is one of the metrics most strongly correlated with customer satisfaction. An FCR below 70% is typically a symptom of a problem with training, processes, or advisor empowerment — and should trigger a structured root cause analysis.
To contractualise: minimum monthly FCR by interaction type, measured on callbacks within 48 or 72 hours.
AHT measures the average time spent on each interaction, including after-call work (ACW). An AHT target set too low pushes advisors to rush interactions without resolving issues. Set too high, it degrades productivity and increases cost. AHT must be defined by interaction type and used alongside FCR to avoid perverse incentives — a low AHT achieved by not resolving issues is a cost amplifier, not a saving.
The proportion of customers who hang up before being connected to an advisor. An abandonment rate above 5% is generally considered a red flag. It directly reflects your provider’s capacity management and queue handling — and typically signals under-staffing or poor forecasting.
Derived from call listening, recording analysis, and increasingly from AI-powered speech analytics, the quality score evaluates advisor compliance with processes, discourse quality, and correct application of procedures. It should be measured on a regular sample and shared with full transparency as part of the monthly governance cycle.
If your provider manages retention or loyalty interactions, avoided churn is a direct business KPI. It allows you to calculate a concrete ROI on your BPO investment — and to have a genuine commercial conversation with your provider about the value they generate beyond operational metrics.
For providers managing product advice or pre-purchase support, conversion rate is a major business KPI. A well-trained outsourced advisor can have a measurable direct impact on your revenue — making this a metric worth tracking and incentivising contractually.
CPI divides the total cost of the engagement by the number of interactions handled. It is the reference efficiency metric for any BPO engagement. It should be tracked over time and compared against sector benchmarks to assess the competitiveness of the model as it matures.
Metrics without a governance framework to act on them are useless. Effective BPO performance management operates at three levels:
The best BPO providers — such as Armatis — offer clients real-time dashboards, structured monthly performance reports, and steering committees prepared with in-depth analysis rather than raw numbers. Governance quality is itself a selection criterion worth assessing during the RFP process.
Between five and eight contractualised indicators is generally sufficient. Too many SLAs dilute focus and complicate governance. Concentrate on the metrics that directly impact customer experience and business outcomes. Answer rate, FCR, CSAT, quality score, and cost per interaction form a solid and widely used starting point.
This is the classic Goodhart’s Law risk: when a measure becomes a target, it ceases to be a good measure. The solution is to combine quantitative KPIs (FCR, AHT) with qualitative indicators (quality score from call listening) and direct customer satisfaction metrics (CSAT, NPS). A provider that optimises AHT at the expense of FCR will be detected by a deteriorating CSAT — provided you track all three simultaneously.
Ideally both. The provider measures continuously as part of its quality management framework. The client measures independently through satisfaction surveys managed internally or via a third party. Comparing both sets of measurements is often highly instructive and prevents any bias toward self-reported compliance — a common issue in BPO relationships where only one party controls the measurement.
Armatis provides its clients with real-time dashboards, detailed performance reports, and a structured governance framework to ensure transparency and continuous improvement. Our teams commit to contractual SLAs with transparent penalty and bonus mechanisms — and we actively use performance data to drive value for our clients beyond the baseline contract.
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