Many service companies gauge their overall success by measuring key performance indicators (KPIs). Although each set of KPIs is unique to every service ecosystem, businesses typically measure financial, process, input, and output KPIs that provide them with large volumes of data that may or may not convey the most effective insights.
The insights you gather from your KPI-related data should be relevant to your business objectives and targets. Tracking too many KPIs can often lead to more confusion rather than clarity, so you must ensure that you choose the proper KPIs to focus on moving forward.
Creating metrics that matter
With a new year quickly approaching, you might want to review and purge your KPIs — just like that “out with the old, in with the new” saying suggests. Make sure you don’t track too many unnecessary KPIs to avoid confusion, keep the ones that are the most relevant to your business for accurate insights and informed decision-making, and, if necessary, add in new KPIs that will help you understand how your business is doing and how you measure up against your peers.
To help you get started, here’s a quick list of service KPI examples that you could start tracking in 2021 if you’re not measuring them already:
- Labor KPIs, including performance, utilization rate, realization rate, gross profit margin, employee satisfaction score, employee engagement score, employee health index, and training hours;
- Financial KPIs, including EBITDA (earnings before interest, taxes, depreciation, and amortization), profit margin, year-over-year revenue growth, cash conversion cycle, cost of acquiring a customer, cost of service delivery, and revenue per employee, customer, product line, or service delivered;
- Customer satisfaction or CX KPIs, including NPS (net promoter score) or customer satisfaction score, retention, service renewal rate, customer lifetime value, number of open service requests, service level agreement (SLA) failures, and number of referrals;
- Process KPIs, including project profitability, on-time product or service delivery, unscheduled downtime, number of defects or errors, percentage of bugs detected in-house, safety incidents, idle time, time to product launch, and the length of the sales cycle.
More importantly, keep an eye on “the golden trifecta of KPIs”, which consists of first-time fix rates (FTFR), customer uptime, and mean time to repair (MTTR). These metrics can help you prove your service value to both stakeholders and customers, and also lead to increased service margins, enhanced operational efficiency, and more.
FTFR will show you where you stand in terms of service productivity and deriving insights from this data can help you save costs and improve service efficiency, thus also improving customer satisfaction rates. Customer uptime is also directly tied to customer satisfaction while MTTR is influenced by operations such as troubleshooting, testing, and remediation processes. Tracking MTTR can help you deal with unpredictability and expedite repair processes before your customers start to feel frustrated with the amount of time it takes for field technicians to figure out the issues and tools they need to get the job done.
Measuring effective KPIs in 2021
As this crazy year draws to a close, it’s important to evaluate and re-align your KPIs for 2021. This means that you must define a clear purpose for each KPI you choose to measure for your company and determine what you expect to learn by measuring it in the coming year.
Once you establish this, you should do a company-wide review of your KPIs to ensure that they have been understood correctly by all departments and that everyone is on the same page when it comes to timelines, milestones, lapses, renewals, etc. Use this opportunity to also incentivize your teams and allow them to access their performance stats in order to keep them motivated in helping you accomplish certain goals.
It’s extremely important to ensure that your KPIs are defined and calculated correctly. Otherwise, the business information they will provide will be of no value to you and you will not be able to use that data to make business forecasts or correctly inform decision-making processes.
Copperberg will help you get started
According to Aquant’s recent Service Intelligence Benchmark Report, the bottom quarter of the workforce racks up 80% of service costs. And with common challenges like the workforce skills gap affecting performance, you must be wondering: how does your team measure up?
Find out on 10 December, at 14:00 CET, by joining Copperberg’s live webinar Service KPIs in 2021: how does your team measure up?
In it, Ron Pasquale — Director of Strategic Program at Ericsson, Edwin Pahk — VP of Product Marketing and Business Development at Aquant, and Thomas Igou — Copperberg’s Head of Content, will discuss best practices for measuring service KPIs and how you can use KPI-related data to holistically improve service delivery across your entire team. Additionally, you’ll also uncover:
- How you rank vs your peers for KPIs like FTFR and MTTR;
- The business impact of technician skill levels, in real numbers;
- Strategies for bridging the technician skills gap with AI.
Ron Pasquale will also share how his team defines and optimizes meaningful service metrics, so make sure you register and save your virtual seat.
It’s time to set your goals for the year to come, establish deadlines for your milestones, and align your KPIs with your business objectives. The KPIs you choose to track moving forward will help you understand how you perform and identify the steps you should take in order to achieve your goals.
And by communicating your progress, your employees will be able to access the information they need to make strategic decisions in real time, which will lead to successful outcomes in productivity, efficiency, and customer satisfaction.
So, don’t miss out on this opportunity to determine where you currently stand and gain actionable insights that will help you prepare for a brighter and more informed 2021.