By Sumair Dutta, chief customer officer, The Service Council, www.theservicecouncil.com, firstname.lastname@example.org
Reasons you should take a closer look at your first-time fix rate.
In The Service Council’s 2013 field service research, organizations reported that cost containment and revenue growth were on the top of a long list of challenges presented to their field service businesses. Therefore, these organizations were primarily focused on enhancing revenue and cost metrics over the next 12 months. In addition, field service organizations were looking to inject a higher level of productivity and utilization into their business in order to improve the level of service delivered to the customer.
One of the surprises in the data was the lower priority given to first-time fix as an improvement initiative over the coming twelve months. It is understandable that overall strategic business goals around cost and revenue are vital to supporting the profit-centric initiatives of service organizations, but the path to achieving profitability is quite often governed by efficiency.
Here’s how first-time fix can significantly impact key field service goals:
Revenue: Most revenue growth in service is tied to the sale and renewal of service contracts. Performance on these contracts is quite often tied to response times and asset availability. Low first-time fix performance can dramatically impact asset availability and therefore diminish the probability of a contract renewal. In the case where revenue growth is tied to up-sell, cross-sell, or new service-based solutions, the permission to approach customers with these offers is contingent on service work being done efficiently. The scenario where the field agent fails to fix a customer’s issue and then tries to follow up with a cross-sell opportunity is bound to end in failure.
Cost And Productivity: Field service visits can be extremely expensive, especially those that do not lead to resolution. Cost per dispatch estimates begin at $150 per dispatch and extend to $1,000 and more depending on the industry and type of service work. What isn’t accounted for in these numbers is the opportunity cost, the amount of service work that could have been attended to with an increased focus on first-time fix. For example, our research shows the average first-time fix to hover at 77 percent. This means that 23 percent of service visits require some sort of field service followup, adding cost per extra dispatch as well as taking field agents away from service work that they could have been performing.
Customer Satisfaction: While the nature of the product or service relationship might not permit customers to easily transfer their vendor allegiance, lower first-time fix rates definitely lead to a lower level of customer satisfaction. Lack of field service efficiency increases the amount of time the customer is stuck with a non-performing asset, thereby increasing the amount of time that the customer isn’t generating revenue from that asset, as well as increasing the amount of time that the customer has to appease his/ her own customers. All of this eventually leads to lower renewal rates and ultimately customer loss. Our research reveals that a lower than 50 percent level of first-time fix can be catastrophic, leading to a near 50 percent level of customer satisfaction. Ideally, organizations should strive to be in the 90 percent and above bracket leading to a similarly above 90 percent level of customer satisfaction. This performance in customer satisfaction then enables the discussion around customer loyalty, retention, and revenue growth.
As mentioned earlier, average first-time fix rates range in the 75 percent to 78 percent level for all organizations, and there is plenty of room for improvement. Prior to undertaking any improvement initiatives, it is vital that organizations actually start measuring the factor, much less its impact on other key field service and customer metrics. Nearly 20 percent of organizations in our research highlight that they do not currently measure first-time fix, an issue that is more of a challenge with smaller field service organizations. For those who are measuring first-time fix, improvement priorities range from:
Improved triage and diagnosis processes at the time of initial service request
Intelligent scheduling of field resources tied to technician knowledge and part availability
Better access to service knowledge and resolution information in the field
Enhanced focus on planning tied to future service demand forecasts
Improved and increased training for field agents.