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Reference Guide

Customer Service &
CX Glossary

Plain-English definitions of the customer service and customer experience terms that matter. Built for small business operators, CX practitioners, and anyone who has wondered what half these acronyms actually mean.

A

Average Handle Time (AHT)

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The average amount of time an agent spends handling a customer contact, including talk time, hold time, and post-contact wrap-up work. Lower AHT means more contacts per hour but can mask under-served customers; higher AHT can mean genuine complexity or inefficient processes. AHT in isolation is misleading — always read it alongside First Contact Resolution and CSAT.

C

Customer Acquisition Cost (CAC)

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The total cost of acquiring a new customer, calculated by dividing total sales and marketing spend by the number of new customers gained in a given period. Best read in context with Customer Lifetime Value (the LTV:CAC ratio) and payback period.

Use the CAC Calculator

Customer Effort Score (CES)

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A measure of how much effort a customer had to put forth to handle their request. Typically captured on a 1-7 scale right after an interaction. Research from The Effortless Experience shows that reducing effort is one of the most reliable predictors of customer loyalty — more reliable, in many cases, than delight or satisfaction.

Read the full guide to CES

Churn Rate

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The percentage of customers who stop doing business with you in a given time period. The inverse of retention rate. Churn is one of the most directly cost-impactful metrics in customer experience because acquiring a new customer is typically several times more expensive than retaining an existing one.

Use the Churn Cost Calculator

Customer Relationship Management (CRM)

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Software and processes for managing the full customer relationship in one place — interaction history, deals, lifecycle stage, ownership, notes. A well-implemented CRM lets every team member see the same customer the same way; a badly implemented one creates a false sense of organization while data scatters.

Customer Satisfaction Score (CSAT)

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A short post-interaction survey measuring how satisfied a customer was with a specific event — typically scored 1-5 or 1-7. Often reported as the percentage of respondents choosing the top one or two scores. CSAT is best for measuring interaction-level quality; it does not predict loyalty as well as NPS or churn risk as well as CES.

Why your CSAT score might not be improving

Customer Experience (CX)

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The sum total of every interaction a customer has with your business across the entire relationship — pre-purchase, purchase, service, and post-purchase. CX is broader than customer service; it includes the product, the website, the unboxing, the support experience, the renewal process, and every other touchpoint along the journey.

What is CX and why it matters

Customer Journey

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The complete path a customer takes from first awareness through purchase, use, and renewal. A documented customer journey identifies every touchpoint, decision point, and emotional state across the relationship. Used to design experiences intentionally rather than letting them emerge by accident.

Customer Journey Mapping guide

Customer Lifetime Value (CLV or LTV)

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The total revenue a customer is expected to generate over the entire span of their relationship with your business. Useful for comparing the value of customers acquired through different channels, justifying retention investment, and benchmarking marketing spend against acquisition cost.

Customer Success

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The proactive function that works to ensure customers achieve the outcomes they bought your product or service to achieve. Distinct from customer service: success is initiated by the business and works ahead of issues; service is initiated by the customer and responds to issues.

Customer Success vs Customer Service explained

D

Deflection Rate

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The percentage of customer contacts that are resolved through self-service, AI, or automation rather than reaching a human agent. Often presented as a quality signal, deflection rate is genuinely useful only when paired with customer satisfaction and resolution data — otherwise it just measures whether customers gave up.

AI in customer service: what works and what doesn't

E

Escalation Rate

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The percentage of customer contacts that have to be transferred from a front-line agent to a higher tier of support, a supervisor, or another team. High escalation rates are a leading indicator of authority gaps, training gaps, or process problems — not usually of difficult customers.

How to reduce escalation rates

F

First Contact Resolution (FCR)

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The percentage of customer issues fully resolved in a single interaction, without the customer needing to follow up. Often considered the single most predictive customer service metric — high FCR correlates with high CSAT, low effort, low cost, and strong retention. Most accurately measured through repeat-contact analysis rather than agent self-report.

Read the full FCR guide

Fractional CX Leadership

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A part-time, embedded customer experience leader who provides senior-level strategy and execution without the cost or commitment of a full-time hire. Common for businesses that need experienced CX leadership but cannot yet justify a full-time CX executive on payroll.

What is fractional CX leadership?

K

Key Performance Indicator (KPI)

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A measurable value that tracks progress against a specific objective. In customer service, the most useful KPIs are leading indicators tied to outcomes you can influence — FCR, CSAT, repeat contact rate — rather than lagging indicators that only tell you something already happened.

Customer Service KPIs to track

N

Net Promoter Score (NPS)

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A loyalty metric based on the question: "How likely are you to recommend us to a friend or colleague?" Respondents are grouped into Promoters (9-10), Passives (7-8), and Detractors (0-6). The score equals % Promoters minus % Detractors, on a scale of -100 to +100.

How to improve your NPS

O

Omnichannel

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A service model in which customers can move between channels (chat, email, phone, social, in-person) and the experience stays continuous and consistent. Distinct from "multichannel," which simply means offering many channels independently — omnichannel requires the channels to share context, history, and a unified view of the customer.

P

PEARLS Framework

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Consumer Core Solutions' six-element customer service framework: Personalize, Engage, Acknowledge, Resolve, Lead, and Serve. Used to assess and design customer interactions across channels, agents, and contact types.

Take the PEARLS Self-Assessment

Q

Quality Assurance (QA) Program

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A structured system for monitoring, scoring, and improving the quality of customer interactions through scorecards, calibration sessions, and coaching cycles. A real QA program is a system, not an audit — it produces coaching loops, not just scores.

What is a QA program?

R

Repeat Contact

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When a customer contacts your business more than once about the same issue. The inverse of First Contact Resolution and one of the most expensive operational problems in customer service — each repeat contact costs you agent time, brand equity, and customer trust.

The real cost of repeat customer contacts

Retention Rate

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The percentage of customers who remain customers over a given time period. The inverse of churn rate. Improving retention by even a few percentage points typically delivers more profit growth than equivalent gains in acquisition because retained customers cost less and tend to spend more over time.

Reduce churn with better service

S

Service Level Agreement (SLA)

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A formal commitment to a specific service standard — for example, "respond to all support tickets within 4 business hours" or "resolve within 24 hours." Internal SLAs set team expectations; external SLAs (especially in B2B contracts) become enforceable commitments.

Self-Service

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Resources — help center articles, FAQs, knowledge bases, in-product guidance — that let customers resolve issues without contacting your team. When self-service works, customers prefer it. Most self-service does not work as well as it could, which is why most customers contact you instead.

T

Touchpoint

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Any specific moment of contact between a customer and your business — an email, a website visit, a package arrival, a phone call, a social interaction, a review prompt. The full set of touchpoints across a customer's lifecycle is the customer journey.

V

Voice of Customer (VoC)

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A structured program for collecting, organizing, and acting on customer feedback across multiple channels. A real VoC program does not just gather feedback — it routes it to decision-makers with authority to act and closes the loop with customers so they know their input mattered.

Designing a VoC program that drives action

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