The one KPI equally important to customers and Service Managers

Back in the days, when Service did not have the relevance that it has today, manufacturers considered it more of an “Evil add-on”. The focus was on selling new products and the measure of success was based on sales revenue. Service was equated with product failure eventually harming sales success and, hoping to support product sales, given away free of charge.

Due to steadily increasing costs, competition and lower margins, the focus of many manufacturers has shifted, realizing that service is an integral part of business and an increasing contributor to overall revenue. But also, customers realize that products need to be maintained and eventually serviced. The buy/no buy decision is not only based on “Who offers the lowest price?” but puts reliable and professional service and support as well into consideration.

Service Managers are challenged with making their team more productive while achieving and maintaining excellence in quality service. Metrics, such as Key Performance Indicators (KPI’s), are introduced to measure, control, and eventually improve performance. Depending on goals, KPI’s may differ, however, the one KPI equally important to customers and manufacturers is the:

First-Time Fix Rate (FTFR)

The First-Time Fix Rate is the percentage of repairs that are resolved on the first customer site visit. A higher rate indicates lower operational service costs, efficient and sophisticated managed service departments, and technical competence. A higher rate also leads to higher customer satisfaction, increased recognition and continued (after-) sales.

Customers want fast and reliable service at low cost. While there is only that much a company can do to lower costs, fast and reliable service is a matter of preparation and anticipatory planning. A fast response time to customer requests is usually controlled by technician availability and scheduling skills. Reliable service is a matter of product knowledge and competence and is an integral part of the FTFR.

The First-Time Fix Rate is one of the most important KPI’s every Service Manager should track. It is an indicator for how well a field service organization is structured, organized, and operated. A higher rate typically leads to higher customer satisfaction and continued business. It is a win-win indicator for customers and manufacturers.