KPIs for Field Service Businesses: The Ultimate Guide to KPIs

Would an airline pilot ever take flight without confirming the plane’s gauges were functioning and displaying correctly? Of course not! The gauges on the instrument panel are the pilot’s eyes into how every component of the craft is working. It also tells them where the plane is in the sky, relative to expectations and other aircraft. Flying by gut instinct in today’s crowded skies is essentially flying blind and completely ill-advised.

Key performance indicators (KPIs) are the gauges for field service companies, enabling owners and managers to operate with the same degree of visibility and confidence on how business is performing. These metrics demonstrate how well a company is doing relative to expectations and how much actual value the company is delivering to customers. Continually monitoring KPIs can help you minimize business expenses, provide better service, optimize technician productivity, and drive profitability.

Research shows that middle-market service firms are a primary driver of the U.S. economy and employment. While they represent barely 3% of all U.S. businesses, they’re responsible for roughly one-third of private-sector GDP and jobs.

This is a simple, yet critical, measurement that reveals how satisfied your customers are with your products and services, how loyal they are to your brand, and how likely they are to recommend you to others. The NPS derives from the answer to the final and most encompassing question of how likely the customer is to recommend and refer the field service provider. Respondents typically answer using a 0-10 scale, with 10 being “very likely” and 1 being “very unlikely.” The 0-10 scale makes it easy to segment customers according to their responses:

• 0–6 Detractors (unhappy with your company and at risk of churning)
• 7–8 Passives (like your company but don’t “love” it yet)
• 9–10 Promoters (love your company and will actively promote it)

This metric is an average based on the results of customer satisfaction surveys, expressed in a percentage from 0% to 100%. You can calculate the CSAT (which strangely does not match the name we know) by taking the number of “satisfied” respondents (those who answer in the “satisfied-very satisfied” range, or similar parameters), divide it by the number of responses, and multiply it by 100.

A focus on the CSAT is critical for a field service organization as it drives long-term customer loyalty and profitability. Why? Loyal customers buy more and more often. They remain customers for longer, and of course, they are promoters. If you focus on building CSAT, you can create a sustainable business because investing in new customers is between 5x more expensive than retaining existing customers. CSAT surveys can be an automatic process executed by your contractor business management solution, so customers can be automatically surveyed after every service visit, or at regular intervals during the year.

Churn rate calculates the number of existing customers who leave a business over a given period of time, such as a quarter or year, divided by the total remaining customers. This is a good measure of customer satisfaction, especially for a business with service level agreements. Conversely, the customer retention rate represents the percentage of customers who carry over from one period to the next.

For service businesses with multiple layers of support like phone service, remote repairs, and in-person technician visits, this KPI is especially useful. It is calculated by dividing the total number of resolved customer issues by those resolved in the first attempt. Like the FCRR or FTFR, this is a measure of your business’ efficiency and cost-control with repairs and resolutions. A high score indicates your business is resolving problems using the least expensive resources.

For businesses with service level agreements (SLAs), this KPI tracks the percentage of time the business misses their SLAs. It represents the total number of incidents resolved within SLA time divided by the total number of incidents demonstrating whether SLAs are delivering as promised.

This metric represents the percentage of upsells and cross-sells that technicians can make on service calls. It is calculated by dividing the total number of service calls by the number converted to sales. Given the investments many field service companies make in training technicians to become up-sellers and cross-sellers who help give your customers the services and equipment they need to keep them running smoothly, it’s essential to know how this investment is paying off.

This measure calculates the profit for each service call by subtracting costs from revenue. Tracking this metric over time is critical to reducing operational costs, improving the factors that contribute to profitable service calls, and increasing the business’ bottom line.

Field service businesses must identify how much revenue comes from a services especially with SLAs. The model depends heavily on service rather than product sales. Companies transitioning to SLAs should track these metrics to see how well they execute their SLA business model plans.

This metric calculates the mean total time from ticket opening until ticket closure. Though MTTR has a strong effect on customer satisfaction, First Contact Resolution Rate (FCRR) has an even stronger correlation. For many service companies, this metric is categorized under Customer Satisfaction/Quality.

Technicians are human and there is a maximum workload they can handle per day without burning out, making mistakes, or resigning. Each service business has to calibrate tech utilization for maximum profitability and retention without sacrificing customer experience. That is where this KPI helps. It measures costs and how effectively the organization uses technicians and informs future staffing decisions. To calculate a technician’s utilization rate, divide the number of hours logged by the number of hours worked.

Fleet management software helps service organizations optimize visits in terms of distance traveled to each customer’s premises. The results can become clouded by other factors such as technician skill sets. Depending on the importance of isolating this one cost at your business, minimizing the miles traveled per technician per day by tracking the average and using software to optimize routing efficiency may be a wise move and will lead to solid technician utilization and a reduction in vehicle operation and investment costs.

It costs a lot less to retain an employee than find and train a new hire, so employee retention keeps costs down, quality of service up, and business continuity running predictably. Employee retention rate is the percentage of people who stay during a specified time period, such as a quarter or year. Employee turnover rate is the percentage of people who must be replaced during that specified time. Planned reductions, such as with software that makes employees more productive, do not count toward turnover rate.

Every day, your business has a schedule, but that schedule of tasks is not always completed. What is completed can be a good measure of the effectiveness of the dispatcher or fleet manager’s effectiveness. The percentage and raw number both show over time how many tasks may be completed per day by a dispatcher. As such, it indicates their ability to manage schedule changes or to make adjustments on the fly. It can also be a good measure of the effectiveness of new contractor dispatching software.

This KPI is used to help determine the planner/ scheduler workload. It is a metric generally used for maintenance planning, especially with SLAs. For example if this KPI amounts to a 20:1 ratio, it shows that 20 technicians’ tasks can be planned by an experienced scheduler in a stable environment.

Technology like field service software reduces the number of time-consuming calls between dispatchers and other office personnel and field technicians. Tracking the number of phone calls and the average and total times per period tells you how much time is lost due to additional communication and how this extends service completion.

When technicians run overtime on jobs, when parts must be ordered, and when technicians with the skills to match a service call are out, rescheduling becomes necessary. This KPI calculates the number of rescheduled tasks divided by all tasks to indicate how much reactive work is needed and potential financial losses arising from lost working hours or lost customers due to rescheduling. This also helps quantify the impact caused by avoidable instances of rescheduling, like lack of specific skillsets within your team, or recurring employee absenteeism.

KPIs are not simply numbers that field service organization leaders meet to discuss and report out weekly. These are the gauges that comprise the instrument panel of your business.

Together, they enable you to understand the altitude and performance of your business so that you can quickly reach a sustainable level of excellence. At that point, you will use your KPIs to make incremental execution improvements to keep your business on course toward your ultimate strategic goals.