How Will Your Service Organization Stack Up Against the Best-In-Class in 2024?

KPIs and Metrics

If you have too many priorities, you have none.”

̶̶  Dr. Stephen Covey, Best-selling author of The 7 Habits of Highly Effective People

As service leaders begin to assess the outcomes of 2023 initiatives and look ahead to 2024, many might be wondering how they measure against other service organizations. Service Council recently launched their Key Performance Indicators (KPIs) and Metrics Benchmarking survey, which gives service leaders the opportunity to find out.

Last launched in December 2021, the intent of the KPIs and Metrics survey is to understand the leading KPIs and metrics executives are utilizing to measure the success of their service business, as well as the current attainment of leading KPIs and metrics.

As we eagerly await the results of this year’s survey, let’s look back at what the previous findings revealed about priority metrics and the questions they have us asking this year.

Will Customer Metrics Still Lead the Pack?

When it came to what metrics groups that service leaders would be prioritizing for 2022, Customer Metrics were the top focus for respondents. This was a noteworthy shift considering prior years saw Revenue (2021) and Cost (2020) as taking the top spot. However, this wasn’t exactly surprising, considering 2022 was dubbed by many industry experts as the “Year of the Customer.”

Another big takeaway was that Employee Metrics came in second to last in terms of priority. It may be indicative of why, shortly after this survey was released, “quiet quitting,” or employee disengagement, began making the news as the latest workplace trend. In fact, Gallup’s State of the Global Workplace report found that the majority of the world’s workers were quiet quitting, with only 1 in 4 actually engaged at work. Aligning to that data, Service Council’s 2023 Voice of the Field Service Engineer Survey also found higher rates of disengagement from the frontline than in year’s past, particularly with younger generations. (Members can access this newly published report here).

If organizations are going to combat the employee engagement crisis, as well as the ever-present talent and skillset challenge, they must make employee metrics a higher priority. This is certainly a result we hope to see reflected in 2024’s findings.

Will We See Increased Focus on Customer Effort Scores?

Diving into which Customer Metric would be top priority for service organizations in 2022, Customer Satisfaction (CSAT) came in at number one, followed by Net Promoter Score (NPS) and Customer Retention. Interestingly, Customer Effort (CES) came in sixth. Creating a frictionless customer experience has been a hot topic among service leaders in recent years. Customers are demanding efficient personalized service delivery on the channel(s) of their choice.

More than ever, they are willing to change providers to ensure a better experience. According to Gartner, a whopping 99% of customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort experience. In fact, Gartner analysts found that customer effort is 40% more accurate at predicting customer loyalty than customer satisfaction. As service leaders become savvier at measuring CES, will we see it rise in the ranks for 2024?

Will As-a-Service Revenue Continue to Rise?

When asked what Commercial, Revenue and Growth Metrics service leaders would prioritize in 2022, Profit Margins and Revenue Growth were in the top 2. We were also excited to see As-a-Service Revenue rise up the ladder from previous years, with 27% of respondents indicating this would be a priority for them. As we see organizations move towards predictive, proactive and outcome-based services, we predict this will continue its upward trajectory in 2024 and beyond.

Another surprise in this category was that Contract Attach Rates Metrics came in fifth on the list. Contract attach rates are a strong causal factor to predictable future revenue, and one of the most important arrows in a service leader’s quiver when it comes to boosting profits. Shouldn’t it be higher in focus?

Service Council CEO, John Carroll, hypothesizes that the lack of priority may be due to silos between sales and service. While outcome-based service is becoming more common, many sales departments within organizations continue to be product-oriented in terms of their selling approach. This creates a disconnect between the teams focused on selling products and those in charge of attaching extended service contracts and service level agreements (SLAs).

Will First-Time Fix Continue to Reign?

When it comes to Cost and Productivity Metrics, not surprisingly, First-Time Fix Rate (FTFR) reigned supreme, with 68% of service leaders indicating this would be top priority for 2022. After all, FTFR is directly related to several other metrics that we are seeing prioritized by service leaders, such as Customer Satisfaction, Employee Effort and Profit Margins.

As service leaders are under continued pressure to do more with less, FTFR will continue to be a leading indicator of how well they are achieving that. It can tell service leaders whether their team is achieving first time resolution, therefore wasting fewer resources and less time on the cost of expensive repeat visits. While it’s unlikely we will see a shakeup for the all-mighty FTFR in 2023, it will be interesting to see if the metrics that cause a low FTFR, such as Dispatch Efficiency and Repeat Visits, gain more traction.

Additionally, we predict we’ll see a stronger focus on call deflection (dispatch avoidance) rates, eliminating repeat visits and No Fault Found (NFF) instances, all of which continue to represent a sizable percentage of dispatch scenarios and service costs (NFF alone contributes around 20% of an organizations’ overall service costs). We will also see a reduction in Mean-Time-to-Repair (MTTR) as remote support continues to rise as a channel of choice for both customers and providers.

Will More Emphasis be Given to Quality and Compliance Metrics?

While quality and compliance metrics remained low in terms of priority in 2022, Service Council predicts that we’ll see this change in 2024 and beyond. Quality metrics that measure asset performance and uptime, as well as customer- and delivery-oriented metrics that measure the efficacy of field service delivery – like CSAT, service efficiency, and on-time arrival – will require more attention from service leaders as organizations strive to meet customer demands.

Compliance metrics will also gain added importance as organizations contend with issues such as data privacy, cybersecurity, environmental impact reduction and employee health and safety. Compliance metrics look different for every industry. For instance, medical device manufacturers must comply with regulations set in place by the Health Insurance Portability and Accountability Act (HIPAA), and the U.S. Food and Drug Administration (FDA), among others. For most manufacturers, though, compliance metrics include areas such as reportable health and safety incidents, environmental incidents, audit outcomes, and regulations set by the International Standardization Organization (ISO).

Data governance is also becoming a quickly emerging trend for 2024. Data collection and utilization plays a key role in delivering the personalized, omnichannel experience that customers are demanding. However, customers also need to know that organizations are treating their data responsibly and ethically. As service leaders expand use of data-driven technologies such as artificial intelligence (AI) and Internet of Things (IoT), they will also need to establish data governance KPIs and metrics within their organizations.

Will 2024 be the Year for Mental Health and Wellness Transformation?

Employee Metrics overall may not have been a priority for service organizations in 2022’s KPIs and Metrics Survey. However, when asked which of the Employee Metrics they would be focusing the most on, service leaders said Employee Engagement, followed closely by Employee Retention. We also saw Diversity, Equity and Inclusion (DEI) rise up the list to number five. Awareness for, and initiatives around, DEI have increased exponentially in the last year. It will be interesting to see if this moves up the list even farther for 2024.

One disappointing takeaway was that Mental Health and Wellbeing came in seventh on the list. This is especially troubling given that Service Council’s 2023 Voice of the Field Service Engineer report found that burnout and lack of engagement, rather than retirement, is the primary driver for field service engineers leaving the profession. If service leaders are going to make any strides in tackling burnout and disengagement, they must begin prioritizing mental health and wellness among their employees. Will we see this take shape in 2024?

Interested in seeing what 2024 will hold in store? Take our 2024 KPIs and Metrics survey and receive a complimentary copy of the summary findings.

Tags: Customer service, Employee engagement, First-time Fix Rate, KPIs and Metrics, Quality & Compliance
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