Field service industry expert, Bill Pollock, explains how service management KPIs in 2016 are shifting back to the basics, although the ways they measure and exceed those goals are changing fast.
A seasoned field service analyst, Bill Pollock, president and principal consulting analyst at the Westtown, Pennsylvania-based research analyst firm Strategies For GrowthSM (SFGSM), has his eye on service industry standards and provides no shortage of advice for service managers looking to run a top-flight field service department.
In this interview, Bill breaks down how business leaders can improve key metrics, such as profitability and customer satisfaction and what service managers can to do exceed key performance indicators (KPIs) using today’s technologies.
Today’s service KPIs are back to the basics, but also back to the futureEven though there have been many changes in how companies do business, and there are many new technologies that have transformed business processes, many of the traditional service KPIs have stayed the same. For example, customer satisfaction is still #1. “The best practices organizations have 90% or higher customer satisfaction,” said Bill.
1. Customer Satisfaction
2. Total Service Revenue
3. Total Service Cost
4. Technician Utilization
Returning to Normalcy: The evolution of service management KPIsIn fact, the priority of these top KPIs have evolved significantly in the last decade. “Recently, we’ve been seeing total service revenue surpass service cost. In 2016, we’re seeing 72% of organizations looking at total service revenue, and 69% at total service cost.” While this isn’t a huge difference in percentage, it’s reflective of the trend to increase revenue from service since the cost-cutting days of the 2008 recession. According to Bill, best practices organizations are more focused on revenue than cost. “During the recession, KPIs were cost oriented: cost, per product; cost, per field engineer; cost for service. But, after 2-3 years, the most aggressive – and progressive – organizations had cut all the costs they could, and the market started coming back to revenue generation.” Service organizations are prioritizing revenue-production over cost-reduction. But, in 2016 they’ve started coming back around to placing the highest importance on customer satisfaction. “Today, now that best practices organizations have implemented everything they could to generate more revenue; they’ve come full circle, back to normalcy, and back to customer satisfaction as the most important measure of success.“
How service managers can help their team meet KPIsAs a service manager, it’s one thing to set goals and another to meet them. Empower your team to meet the KPIs you’ve set by following these tips:
- Set targets: Decide on the baseline, and define standards or targets. Then create a plan to reach them.
- Define a scoring methodology: Determine how you’ll measure success and assign individual scores that roll up to a total score for each category; for example:
- 95-100% = Exceeds expectations
- 85-95% = Meets expectations
- 0<85% = Does Not Meet expectations
- Link KPIs to critical factors that drive the performance of the organization. If the metric is not directly linked to a critical organization success factor, it will probably not be worth the resources to measure.
- Assign someone to take ownership of the data coming in. If you don’t have accurate data to report on, there’s no chance you’ll achieve your goals.
- Communicate KPIs clearly to everyone involved.
- Invest in resources necessary to achieve goals. You can’t expect someone to increase measurement in an area without listening to their needs and giving them the resources to make improvements.
- Foster collaboration between sales and service. Give sales-reps an incentive to sell more service contracts and turn the service department into a profit center.