{"id":2357,"date":"2012-06-07T17:47:31","date_gmt":"2012-06-07T17:47:31","guid":{"rendered":"http:\/\/www.theweekinimaging.com\/?p=2357"},"modified":"2012-06-07T17:47:31","modified_gmt":"2012-06-07T17:47:31","slug":"staubitz-on-service-beyond-service-metrics-and-benchmarking","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/the-week-in-imaging-twii\/sales-and-service\/2012\/06\/staubitz-on-service-beyond-service-metrics-and-benchmarking\/","title":{"rendered":"Staubitz on Service: Beyond Service Metrics and Benchmarking"},"content":{"rendered":"
\"\"<\/a>

Ken Staubitz<\/p><\/div>\n

As a former service leader and as a current industry service consultant I have seen various metrics and methods used for service financial and performance benchmarking which have had varying degrees of success.\u00a0 Some of these methods are proven effective on paper, producing the desired financial return for a particular department (service in this case) meanwhile \u00a0morale has suffered, overall operating income is unchanged or continues to decline along with the organization\u2019s client service levels. Additionally, I have seen reluctance to benchmark from various levels of management fearing that incorporating various metrics could reduce their customer service and ultimately change their corporate culture.\u00a0 Conversely, others have incorporated various service metrics into their service operation which they feel have produced the desired results: \u00a0improved service margins, increased levels of accountability, provided focus in various areas, etc.<\/p>\n

For those of you who have been in the business more than 15 years, there really weren\u2019t any metrics to use when you entered into the business, and if you were a forward thinker over 15 years ago, you probably struggled getting the desired data out of your current system. I emphasize system because for many, note cards and paper filing was the CRM of choice over 15 years ago.<\/p>\n

Whether you are a proponent to metrics-driven reporting and benchmarking or not the good news is that data is more readily available should you choose to incorporate metrics to help monitor your business.\u00a0 In addition there are various models for service reporting and benchmarking, including the model I use at Strategy Development.\u00a0 Whatever the name is slapped on the given model, you will find that many of these models are similar if not identical and the differences being minor tweaks to revenue, or expense allocations. \u00a0Regardless of the model(s) you incorporate into your business it is important to understand that the various metrics and benchmarks associated are merely tools to help you monitor your business and (assuming everyone is reporting methods are the same) allow you to benchmark your organization to others.<\/p>\n

\u00a0However, no one should use these benchmarks at face value and I cannot emphasize enough that these metrics are merely tools<\/em> to help you manage your business.\u00a0 The metrics will not run your business for you and there isn\u2019t a cookie cutter approach to running a high-performing service operation.\u00a0 True success in running your business is the result of proper planning and execution, management effectiveness as well as employee selection and development.<\/p>\n

Let\u2019s analyze a few of the commonly used benchmarks for service.<\/p>\n

Gross calls = 5.0<\/strong>.\u00a0 This measurement is the average total number of calls (includes rescheduled and call backs) performed by a technician in a given day.\u00a0 Although this metric is commonly used as criteria within many incentive pay plans, alone it does not provide any financial impact.\u00a0 It can be a barometer in determining call load, however it can be inflated given the organization\u2019s current first call effectiveness.\u00a0 It is not uncommon for technicians to have an FCE below 82% and still reach their average gross call\/day metric because they are creating their own workload (services calls) causing multiple trips to fix the same piece of equipment within a given recall parameter. If this metric is part of your current incentive pay plan, check to ensure your technicians are not creating their own work and that you also include other minimum acceptable metrics such as First Call Effectiveness to ensure your technicians are also effective at servicing the given equipment.\u00a0 If work pace is your motive in using this metric then consider substituting Net Calls in your incentive plan.\u00a0 After all, you want your customers to receive quality service not just a lot of service.<\/p>\n

Service GP = 52%.\u00a0 <\/strong>I repeatedly get asked if this metric is realistic.\u00a0 The short answer is yes with hard work and dedication to continued improvement. I have many clients who are achieving this benchmark with<\/em> the proper revenue expense allocations.\u00a0 However, it is absolutely imperative that if you are trying to benchmark your organization to the rest of the world you must ensure you are comparing apples to apples.\u00a0 There are many dynamics that play into this figure regardless of having your expenses and revenue assigned to the right bucket.\u00a0 Driving technician effectiveness and efficiency, ensuring proper staffing levels, and managing to parts spend targets all will help improve your service gross profit.<\/p>\n

There are other factors that also contribute to the service department\u2019s profitability.\u00a0 Compensation structure for example can have a tremendous financial impact.\u00a0 To illustrate my point let\u2019s assume\u00a0 you are getting 6.8+ productive hours out of your staff and your technicians\u2019 First Call Effectiveness (FCE) is above 85% so the rescheduled rates and recall rates are in line with the benchmarks and your technicians are properly trouble shooting and spending what they should be spending on parts.\u00a0 Even though the department may be over performing in all of these areas you may be over paying your technicians because of your internal hiring and development processes.\u00a0 It is critical to have a compensation structure and performance based incentive plan synchronized with the organization\u2019s business objectives.<\/p>\n

First Call Effectiveness (FCE) >82%.\u00a0 <\/strong>This metric has been around for years and is calculated by subtracting your recall percentages and rescheduled percentages from 100% (FCE = 100% – (Recall % + Rescheduled %).\u00a0 FCE is an excellent tool to measure the efficiency and effectiveness of your field staff.\u00a0 In order to consistently obtain this benchmark it is important that your organization provide the necessary training, coaching, car stock (considering usage and technician feedback), and operational structure to allow your technical team to obtain or exceed this benchmark.\u00a0 It is possible that you have the next super tech on your team, but his FCE doesn\u2019t reflect this ability because they haven\u2019t been given the tools and training to succeed.\u00a0<\/p>\n

There is more to training a technician than simply sending them to a manufacturer\u2019s course and allowing them to bounce ideas off the rest of their team members during a service meeting.\u00a0 Technicians learn best in real world hands-on situations where feedback is available.<\/p>\n

The bottom line is that metrics are just numbers \u2013 marks on a page.\u00a0 You have to get into the detail to understand what they are telling you.\u00a0 Grind to the marks on a page and you will most likely experience diminishing returns.\u00a0 Your people may begin to consider themselves grist for the mill.\u00a0 There is more to a great manager than simply managing to a metric.\u00a0 Great managers develop people and inspire personal ownership of a job well done.\u00a0 High performance is the result.<\/p>\n

About the Author:<\/strong>\u00a0 Ken Staubitz <\/strong>is a service consultant with Strategy Development, with 14+ years\u2019 experience in all levels of service operations and MPS service structure.\u00a0 Formerly with Modern Office Methods (MOM)in various service and operational roles; was MOM;s Director of Client Services where he oversaw all service operations & managed a staff of 60+ field service personnel.\u00a0 Ken served on the Lanier Dealer Advisory Council & was an E-Automate Service Committee member.\u00a0 At www.Strategydevelopment.com<\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

As a former service leader and as a current industry service consultant I have seen various metrics and methods used for service financial and performance benchmarking which have had varying degrees of success.\u00a0 Some of these methods are proven effective on paper, producing the desired financial return for a particular department (service in this case) meanwhile \u00a0morale has suffered, overall operating income is unchanged or continues to decline along with the organization\u2019s client service levels. Additionally, I have seen reluctance to benchmark from various levels of management fearing that incorporating various metrics could reduce their customer service and ultimately change their corporate culture.\u00a0 Conversely, others have incorporated various service metrics into their service operation which they feel have produced the desired results: \u00a0improved service margins, increased levels of accountability, provided focus in various areas, etc. For those of you who have been in the business more than 15 years, there really weren\u2019t any metrics to use when you entered into the business, and if you were a forward thinker over 15 years ago, you probably struggled getting the desired data out of your current system. I emphasize system because for many, note cards and paper filing was the CRM of choice over 15 years ago. Whether you are a proponent to metrics-driven reporting and benchmarking or not the good news is that data is more readily available should you choose to incorporate metrics to help monitor your business.\u00a0 In addition there are various models for service reporting and benchmarking, including the model I use at Strategy Development.\u00a0 Whatever the name is slapped on the given model, you will find that many of these models are similar if not identical and the differences being minor tweaks to revenue, or expense allocations. \u00a0Regardless of the model(s) you incorporate into your business it is important to understand that the various metrics and benchmarks associated are merely tools to help you monitor your business and (assuming everyone is reporting methods are the same) allow you to benchmark your organization to others. \u00a0However, no one should use these benchmarks at face value and I cannot emphasize enough that these metrics are merely tools to help you manage your business.\u00a0 The metrics will not run your business for you and there isn\u2019t a cookie cutter approach to running a high-performing service operation.\u00a0 True success in running your business is the result of proper planning and execution, management effectiveness as well as employee selection and development. Let\u2019s analyze a few of the commonly used benchmarks for service. Gross calls = 5.0.\u00a0 This measurement is the average total number of calls (includes rescheduled and call backs) performed by a technician in a given day.\u00a0 Although this metric is commonly used as criteria within many incentive pay plans, alone it does not provide any financial impact.\u00a0 It can be a barometer in determining call load, however it can be inflated given the organization\u2019s current first call effectiveness.\u00a0 It is not uncommon for technicians to have an FCE below 82% and still reach their average gross call\/day metric because they are creating their own workload (services calls) causing multiple trips to fix the same piece of equipment within a given recall parameter. If this metric is part of your current incentive pay plan, check to ensure your technicians are not creating their own work and that you also include other minimum acceptable metrics such as First Call Effectiveness to ensure your technicians are also effective at servicing the given equipment.\u00a0 If work pace is your motive in using this metric then consider substituting Net Calls in your incentive plan.\u00a0 After all, you want your customers to receive quality service not just a lot of service. Service GP = 52%.\u00a0 I repeatedly get asked if this metric is realistic.\u00a0 The short answer is yes with hard work and dedication to continued improvement. I have many clients who are achieving this benchmark with the proper revenue expense allocations.\u00a0 However, it is absolutely imperative that if you are trying to benchmark your organization to the rest of the world you must ensure you are comparing apples to apples.\u00a0 There are many dynamics that play into this figure regardless of having your expenses and revenue assigned to the right bucket.\u00a0 Driving technician effectiveness and efficiency, ensuring proper staffing levels, and managing to parts spend targets all will help improve your service gross profit. There are other factors that also contribute to the service department\u2019s profitability.\u00a0 Compensation structure for example can have a tremendous financial impact.\u00a0 To illustrate my point let\u2019s assume\u00a0 you are getting 6.8+ productive hours out of your staff and your technicians\u2019 First Call Effectiveness (FCE) is above 85% so the rescheduled rates and recall rates are in line with the benchmarks and your technicians are properly trouble shooting and spending what they should be spending on parts.\u00a0 Even though the department may be over performing in all of these areas you may be over paying your technicians because of your internal hiring and development processes.\u00a0 It is critical to have a compensation structure and performance based incentive plan synchronized with the organization\u2019s business objectives. First Call Effectiveness (FCE) >82%.\u00a0 This metric has been around for years and is calculated by subtracting your recall percentages and rescheduled percentages from 100% (FCE = 100% – (Recall % + Rescheduled %).\u00a0 FCE is an excellent tool to measure the efficiency and effectiveness of your field staff.\u00a0 In order to consistently obtain this benchmark it is important that your organization provide the necessary training, coaching, car stock (considering usage and technician feedback), and operational structure to allow your technical team to obtain or exceed this benchmark.\u00a0 It is possible that you have the next super tech on your team, but his FCE doesn\u2019t reflect this ability because they haven\u2019t been given the tools and training to succeed.\u00a0 There is more to training a technician than simply sending them to a manufacturer\u2019s course and allowing them to bounce ideas off the rest of their team members […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[87],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/2357"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=2357"}],"version-history":[{"count":0,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/2357\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=2357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=2357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=2357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}