You’re under increasing pressure from senior management to boost revenues and cut costs, while maintaining service levels to customers. But, how can you strike the right balance between what appear to be competing objectives?
The answer lies in your service organization’s first-time fix rate. When you focus on improving this field service metric, it’s like pulling a lever that can simultaneously increase customer satisfaction, reduce operational costs, and create new revenue by freeing up technicians to handle more jobs every day.
What is First-Time Fix Rate?
Whether your organization services medical equipment, HVAC systems or solar panels, the question is the same: How often do your technicians resolve customers’ problems on the initial visit?
That’s your first-time fix rate.
According to Aberdeen Group research, “best-in-class” field service organizations resolve the issue on the first visit 88 percent of the time, “average” companies achieve an 80 percent rate and the “laggards” struggle at 63 percent.
“When you have a high first-time fix rate, you’re avoiding multiple truck rolls and the additional costs that go along with that — the extra labor, increased dispatch and lost service opportunities,” says Patrice Eberline, vice president of global customer transformation for ServiceMax, a provider of field service management software.
What Causes Poor First-Time Fix Rates?
Three common culprits cause low first-time fix rates for service organizations:
- Lack of spare parts: The technician arrives at the jobsite and realizes he or she doesn’t have all the parts on hand required to fix the issue.
- Lack of skills: The technician doesn’t have the knowledge or the training to solve the problem. Or the technician takes too long trying to fix the issue and needs to schedule a callback to finish the job.
- Poor communication or planning: It’s the end of the day, and the customer is no longer on site. Or the asset has been moved to another location, but that information is not communicated to the technician prior to dispatch. Whatever the reason, the technician must make an additional visit to close the work order.
What’s the Impact of Low First-Time Fix Rates?
The extra expenses required to resolve jobs not fixed during the first time of service can take a substantial chunk out of your bottom line.
Compare the difference between a best-in-class organization and a laggard, if each company averaged 400 service calls per day. An 88 percent first-time fix rate for a top-performing organization means 48 service calls (12 percent) require additional visits. By comparison, the lowest-performing organization’s 63 percent rate translates into 148 service calls (37 percent) that aren’t resolved on the first visit. These organizations require multiple dispatches on 100 more jobs per day than the best-in-class companies.
When you consider that service calls not resolved on the first visit require an additional 1.6 dispatches to fix the issue, at an average cost of $200 to $300 per truck roll, the cost burden mounts quickly for companies saddled with low first-time fix rate calculations.
As a result, field service leaders must add more technicians (and more overhead) just to keep pace with high-performing competitors.
“You have to hire a lot more people just to maintain your SLA with the customer, or else detract from your ability to service your customer’s needs because you essentially have this ‘boat anchor,’ which is a poor first-time fix rate,” says Dave Hart, vice president of global customer transformation at ServiceMax.
How Can You Improve First-Time Fix Rates?
Identifying the factors that drag down your company’s first-time fix rate is the first step. But what can you do to improve performance?
Consider these three best practices of high-performing service organizations:
- Enhance inventory visibility: If the issue is lack of spare parts, give technicians access to real-time inventory information and the ability to order parts from the field. This will reduce technicians’ tendency to stockpile parts in their vans, while ensuring that the right parts are available where and when they’re needed.
- Improve dispatch: Equip your dispatchers with the all the information they need, in real time, to assign jobs to technicians who have both the appropriate skillset and parts on hand to resolve the customer’s issue correctly the first time.
- Facilitate collaboration: Give your techs remote access to the collective knowledge of your entire company through real-time social and collaboration tools. This way, technicians can get the answer to their questions quickly, via their smartphones or tablets, to fix the problem during the first visit.
The Bottom Line
A positive first-time fix rate calculation reflects how efficiently and effectively your organization can service existing customers. The higher the rate, the more capacity your team will have to take on new customers at the lowest possible operational cost.