Definition: Customer response time is the period between the placement of an order and the delivery goods or services. It can also refer to the delay in communication or response from business to customer. In other words, it is the time between when a customer makes an inquiry about a product or commits to a purchase a good or service and when it is actually received by said customer.
What Does Customer Response Time Mean?
This is an important concept to management because they want to make sure customers are happy. The longer customers have to wait for the company to reply or ship orders, the more dissatisfied they become. Management uses customer response time to measure and track how quickly the company responds to customers in an effort to minimize this waiting period and create more customer satisfaction and loyalty.
Let’s look at an example of why a higher CRT is almost always worse than a lower CRT.
Mark owns and operates a small screen-printing business that offers a variety of custom apparel sold direct to customers online. He has a policy that all orders must be fulfilled and shipped within 7-10 business days of ordering making his shipping response time 7-10 days. If his printers are running late and an order ships out 11 days after it was placed, it is late and Mark should look into why the CRT wasn’t met.
Similarly, Mark also has a communication response goal of 24 hours. This means he must respond to the many inquiries from current and prospective customers about their order status, quality issues, and shipping policies each day within 24 hours. If Mark or his employees are not getting back with their customers within this time period he could be losing business. That’s why it’s important to track CRT over time and strive to improve it by creating more efficient operations and systems.
Companies often set a standard customer response time, not only for shipping goods and follow up communication, but also for production schedules. This way the company can track how well it’s replying to customers. Customers can also come to expect a specific level of communication. Setting these goals also gives the company a benchmark for future improvement.