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For hardware and equipment manufacturers, there are plenty of claims around field service delivery optimization best practices. And a lot of statements regarding what your customers really want that it’s hard to know what’s true and what’s not.
What we know for sure is that your customers don’t want their equipment to break. When it does, they want you to fix it as quickly as possible with minimal impact to their operation. But as service revenue and the concept of annual recurring revenue (ARR) become more important to OEMs, there are more truths that come into play that should be driving the efforts of your organization every single day.
In this post, I’m going to outline 4 absolute truths that impact today’s hardware and equipment manufacturers so you can know what you should be focusing on in order to optimize field service delivery in your organization.
This might seem like a no-brainer of a statement, but you’d be surprised at how few manufacturers fully grasp what it means to them and how to apply it to their operation.
According to TSIA Field Services Benchmark data, 90% of companies measure customer satisfaction with the on-site incident. However, 50% don’t align employee compensation to customer satisfaction, and 40% don’t even have a formal process in place to review the results of the incident with the field service technician. That doesn’t sound like commitment or confidence in the importance of customer satisfaction.
Even if you’re measuring customer satisfaction, have you made it clear to your employees the importance of outstanding performance in this area? If you want customers to continue to work with you and renew their contracts, you have to do a great job with on-site incidents and it has to be formally tied to employee compensation and performance reviews. But what is it that drives satisfaction with the on-site incidents? That leads me to the next fact I want to share with you surrounding service delivery optimization.
Most Field Services organizations are built around responding quickly once the case gets created for an on-site dispatch. This is because most Field Service organizations believe that “You can’t hold us accountable for up-front triage, spare parts delivery, or customers giving us access.
The thing is, the customer doesn’t care how quickly you get there or whether the delay was your fault or theirs. At the end of the day, they hold your company accountable for how quickly you get their operation up and running again. Here are three facts you need to know about resolution time:
Where resolution time is an absolute metric where you have a fixed quantity of hours to resolve customer issues, the concept of SLAs and compliance against those is a relative standard of performance. Your customers won’t give you credit for failure to meet your own aggressive standard. You have to do whatever you committed to do in the contract.
Another interesting fact about SLA compliance is that you get more credit for achieving SLAs that are closely aligned with a customer’s business outcomes. For instance, high SLA compliance with equipment uptime is more closely correlated with renewal rates than incident response time (see fact 2 above). In addition, there has been a growing trend of customers incorporating penalties for non-compliance with established SLAs. But, the good news is that your customers will also reward you with bonuses for great performance that aligns with their business outcomes.
If you commit to achieving your SLAs and you perform well, the marketplace will reward you with a higher install base under contract. However, it’s not over once you resolve the initial incident.
While customers love you when you quickly resolve their problem, they don’t want to see you again for a while. After the initial incident is resolved, there’s a call back window where customers don’t expect to see you coming back to service that same piece of equipment. It doesn’t matter whether it’s the same problem or a different problem. Long call back windows with a low incidence rate results in higher customer satisfaction. And we know what that means: higher renewal rates!
For more facts about field services delivery optimization and added detail on what I covered above, be sure to watch my recorded webinar, “10 Facts About Service Delivery Optimization and the Role of IoT”.
In addition, TSIA’s Field Services research and advisory program has the most comprehensive benchmark in the industry, which is where we came up with these facts and more. Through our benchmarking process, we track key metrics and identify factions that are correlated with high performing operations to improve KPIs and uncover the key metrics that every OEM’s Field Services organization should be focused on.
Contact TSIA today to learn more about how to get access to the industry-validated data and insights you need to optimize your field service delivery, appropriately compensate your teams, deliver better outcomes to your customers, and more.
Post Date: January 28, 2020
For Hardware and Equipment Manufacturers
Vele Galovski is vice president of support and field services research for TSIA. Using his nearly 30 years of industry experience, he has consistently helped companies both large and small drive double-digit top-line growth with a proven retain, gain, and grow strategy. Vele has also written a book, The Perpetual Innovation Machine, which describes a holistic approach to management based on ambitious goal setting, data driven analysis, skillful prioritization, inspiring leadership, and the lost art of employee engagement.
The Technology & Services Industry Association (TSIA) is dedicated to helping technology and services organizations large and small grow and advance in the technology industry. Find out how you can achieve success, too. Call us at (858) 674-5491 or we can call you.