A long time ago, in a galaxy far far away, ServiceMax coined the phrase “The Universal 9.” These service performance metrics were outlined as the 9 KPIs that just about every service business should be measuring, and if not, they should start today.
I’ve spent the last few years traveling around the world, and meeting with organizations that are just beginning to take the first steps on their transformation journey. Among the multitude of things that I’ve learned about many industries that I didn’t even know existed, a few things stand out:
- Service is service. There may be nuances to how the job is done, but we all care about the same thing: making the customer whole.
- So many of you are still on pen and paper!
- You want to take the first step in digital transformation, and you know the future of your business depends on it, but you don’t know where to start.
Deming is often misquoted when people use the phrase “you can’t manage what you can’t measure.” But what he really said was that you needed to use data to confirm what is working and what was not. So how do we confirm?
Enter what we call the Universal 9: nine core service performance metrics that bridge type of company, vertical, region, and even strategy, and that form the core language of field service management across the globe. Each is intimately involved in the management of service teams—whether you manage your own FTE team or work with third parties. Each can be present in some form across reactive, preventive, install, and other business lines.
Now some of you operate within the confines of a cost center. Others of you operate within a profit center. ROI is different depending on this, so there will be some mental modifications that you will make, and some of these metrics may not be as impactful as others for your particular situation. That’s ok, but having worked with and spoken to hundreds of organizations, we’ll go out on a limb here and say that if you aren’t measuring at least 4-5 of these things, you probably should be.
#1 – First Time Fix Rate (FTF)
FTF is perhaps the single most important metric upon which to move the needle in your service organization. We even have a series dedicated to it—read the first article, “First-Time Fix: Understanding the Impact” here.
If you consistently have lower FTF percentages than your competition, you effectively need more capacity in your field team than your competitors just to keep up—and we all know how expensive that is! By improving your FTF rate you avoid this problem and reduce truck rolls, which saves even more dollars.
For those of you that have longer MTTS, increasing your FTF rates may not save enough time to do additional work orders, but think back to some of those challenges you are facing, and to your goals for the next year. Whether you are moving towards a servitized business model or just looking to provide your customers with an experience that is a cut above your competitors, providing some headroom in your field team can afford you the time to execute on some of your offensive strategies—without having to hire additional heads and incur all those costs.
#2 – Mean Time to Repair/Service/Install (MTTR/S/I)
Let’s look at it from the perspective of Mean Time to Repair (MTTR). MTTR = Average amount of time it takes to complete repair work orders. This is typically measured over some period of time and might span over multiple work orders. Also, the start and end times used to take the measurement may vary.
- Start time could be: when the call came in, when the technician is assigned, or when the technician left the office
- End time could be: when the service is up and running at some capacity, when the service is back up at full capacity, or when the technician closes the work order
#3 – Contract Attach Rate
The typical calculation of this service performance metric is the number of contracts divided by the number of customers. Some companies, however, may also define attach rate as % of products under contract.
Either is fine, it’s the increase we are focused on here.
Attach rates can also be shown at point of sale or post-sale. Some benchmarks are done as attach rate post point of sale—a flavor of upsell/cross-sell. The importance of the business of contract attach rates is huge. These long-term annuity streams can be the lifeblood of companies, and if a contract attachment is missed at point of sale, it can be a huge revenue opportunity miss. So picking up the slack, as well as adding on to existing contracts, can be very important to the service team contribution, and therefore impactful to our business case.
#4 – Leakages
Leakage is when parts or service are given away to a customer at no charge due to thinking the customer is under contract or warranty. This is often because a field service engineer doesn’t have an easy way to check entitlements at a customer site.
Many companies don’t know how big of a problem this is because they may not be able to measure it with their current system, or they don’t necessarily want to admit it is a problem. Although there are absolutely situations where “no billing” services or other items is appropriate, you may be surprised at how impactful plugging these leaks can be.
#5 – Net Promoter Score (NPS)
NPS is hugely important in gauging the overall health of your relationship with your customers. I often see NPS factored in as one component of a post-service customer survey. In actuality, it should be completed annually. What you are asking is one simple question: “How likely are you to recommend X to a friend or colleague?” In your own survey, you would substitute your organization for X. If they score you a 9 or 10, they are a promoter.
Anything below a 9 doesn’t help your overall NPS score.
Now, if you are looking to gain a better grasp on how your customers felt about a particular instance of service they received, then perhaps you should look into Customer Effort Score (CES). CES is measure by asking one simple question as well: “How much effort did you personally have to put forth to handle your request?”
While this Harvard Business Review article is almost 10 years old, many of the ideas outlined have become even more paramount in the service world today, where organizations are looking to differentiate their service offerings.
#6 – Service Level Agreement (SLA)
Service Level Agreements (SLAs) outline what level of service an organization is entitled to. For more on entitlements, check out my previous post here.
Let’s think about it from the consumer perspective for a second. One of the areas where it is easy to see a difference in the level of service provided is on an airline. In economy seating, you may be cramped, receive one drink or snack (depending on flight length), and if you’re lucky, have room for your carry-on bag. However, in business and first-class, you receive a higher level of service based on the agreement with the airline. This can include things like priority boarding, getting your coat hung up, better seating, and being served food and liquor.
In the digital service world, we have to consider a multitude of things. We need to track response times and non-recommended use. We need to track the software and make sure all the updates are working. And we need to ensure uptime levels—what percentage of use can your customers expect? Are you making specific guarantees regarding the percentage of use, and do you incur penalties for failing to meet that?
#7 – Technician Productivity (Utilization)
How productive are your service engineers? Another way to ask might be; how much of their day is spent making the business money? Different organizations measure utilization in different ways, but it often comes down to whether the time is billable or not. If the time is billable, then they are considered productive, if it’s not billable, then it’s non-productive. Some organizations consider drive time to be productive, and others only measure time actually spent using a wrench/spanner.
Let’s consider the simple below example:
A technician currently completes 2 jobs per day, at an MTTR of 2 hours per job. They spend a total of 1 hour of drive time and take 1 hour for lunch. If we consider drive time to be productive, then we can calculate their utilization to be (5 hours productive / 8 total hours available) = 62.5%, which is pretty abysmal. What are they doing with the rest of their time?
The key is to focus on maximizing Utilization. If you are able to hasten the completion of admin work, then perhaps you will give them the ability to complete another job in their day, resulting in additional revenue for the organization, a reduction in your current backlog of business, and happier customers that have their issues resolved faster.
#8 – Upsell/Cross-sell
Upsell and cross-sell metrics are most commonly defined by leads or opportunities generated by a technician or by the number of money sales that can be attributed to a technician.
Some organizations are open to revenue generation for their field team, some are not. By now, you’ve heard the term “trusted advisor” to describe the service engineer. They are the best person to advise the customer on when/if they should upgrade their current solution.
Even if you don’t want them to sell directly to the customer, having them take note of where they notice a customer issue might be solved by upgrading or providing a higher level of service can be invaluable to the organization.
#9 – Uptime
Finally, uptime is the percentage of use a customer can expect or receives from their equipment. If you are looking to move to a Servitization model, then perhaps you will be selling outcome-based service, with specific guarantees of use for your products. The cost of systems going down or offline can be catastrophic to a customer. I was working with a well site operator and they had a failure on a $6,000 part that almost shut down a million-dollar-a-day well! When you are making certain guarantees about your products, it can result in huge penalties for failure to deliver service in a timely manner. What you really want to move toward is a world where you have zero unplanned downtime.
Balancing the 9 Service Performance Metrics
While those are the 9 core service performance metrics that everyone should be looking at, you have to remember that it is a balancing act to ensure your service team is running as efficiently as possible. These metrics will go together to achieve a common goal, but too much focus on just one area may negatively affect the other. Many organizations look at decreasing MTTR while increasing FTF. If the incentive is mainly focused on MTTR, you may find that your FTF is decreasing instead of increasing because the technicians may be rushing the job (to hit MTTR) and thus creating errors and causing the FTF to be low.
To see how ServiceMax has helped our customers move the needle on these service performance metrics, check out the Impact Report showing the results of our annual customer survey here.