Establishing and measuring key performance indicators (KPIs) can have a real and significant impact on the long-term success of service-led businesses. Because even if all the individual parts of your company are first-class – for example your software, people and machinery – you won’t know how they are performing together if you don’t measure against real outputs. So, how can you go about establishing your core success metrics?
What is a Key Performance Indicator?
“A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the business, while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support and others.”
Things to consider when setting your KPIs
There is plenty of advice out there on what you KPIs could be. But your core success metrics should be specific to your business. So, when setting (or reviewing) your KPIs, you should always look at the following:
- What are your most important priorities? Your KPIs should always reflect your company’s strategic goals, risks and concerns
- What is it you want to achieve? As well as looking at things you want to measure, you should also spell out what success will look like in terms of outcomes (e.g. a 10% improvement in customer satisfaction rates)
- How will you achieve the desired results? A KPI on its own is useless if you don’t have any idea about how you will improve
- How will you measure success? There is no point establishing a KPI if you can’t track it. Look at investing in business intelligence reporting software so that you can track improvements across your organisation
- Is it attainable? A target that’s too high risks your business giving up
- Who will be responsible for the business outcome?
- Do you understand it? It sounds like common sense, but you’d be amazed how often people in business don’t understand what they are trying to achieve.
Make sure your KPIs adapt with your business
Crucially, once established, your KPIs shouldn’t be set in stone. It’s vital that you review and (if necessary) adapt these at regular intervals to reflect changes in your business. It’s also important to consider how developments in your sector and the wider world might require you to revise your KPIs. For example, GDPR could have implications on any marketing targets. Brexit could also throw up a new range of challenges and issues that need to be addressed.
Possible Key Performance Indicators for the service sector
As discussed, KPIs should be specific to your business. But some standard success metrics are used across the industry. For example, people hate time-consuming, complicated and costly service and the value of customer satisfaction and word of mouth cannot be underestimated. So, your first-time fix (FTF) rate is critical if you want to impress and retain customers. It’s no wonder, therefore, that FTR is one of the most frequently measured key performance indicators (KPI) used in the sector.
Other possible KPIs include:
- Customer satisfaction/retention levels
- Customer cross-sell/up-sell
- Service renewal rates
- Number of open service requests
- Late jobs
- Number of customers served
- Time spent between jobs
- Service Level Agreement (SLA) failures
- Profit margin
- Year-on-year growth
- Cost of acquiring a customer
- Cost of service delivery
- Unscheduled downtime
- Employee satisfaction/retention levels
- Staff training
- Staff sick days
- Safety incidents
- Unplanned vs Predictive maintenance work
- And more!
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At Service Geeni, our software provides you with a plethora of reporting options, tailored to the needs of each user. For example, you can look at the real profit and margin information of each client, look at the value of planned maintenance vs reactive work, and establish the profitability of all your engineers.
We also provide the ability to filter and analyse a wide range of data quickly and easily. By presenting this information in an easy to understand format, you can examine trends and uncover insights that will help you to optimise the performance of each element of your operation.
With the ability to harness big data leading to improved performance at all levels of your organisation, companies that are not yet using software to provide them with the most up to date and accurate data, from multiple data sources are likely to fall behind.
Our service management software can help your business work smarter and achieve success. Contact us today to find out more.