Aftersales & Service KPIs: 10 Essential Key Metrics
Customer service KPIs help aftersales teams keep a closer eye on their goals. In this article, you can find out which customer service KPIs are significant in machinery and plant manufacturing and what they look like in practice.
Companies in the machinery and plant manufacturing sector
Companies in the machinery and plant manufacturing sector currently need to find new growth drivers. One such driver is the aftersales and service area, which has become an important stage in the customer journey in the past few years. At the point where an order used to be considered complete in the past, today the work of service employees is just getting started.
Manufacturers have realized the importance of providing excellent aftersales service if they want to
- retain their customers in the long term,
- remain competitive, and
- effectively increase their revenue.
In order to reach a level of excellence in their service operations, companies need to digitalize their aftersales and service processes. And to achieve that goal, they need
- a software that fits the needs of the aftersales teams,
- an aftersales strategy that is in line with the company's goals, and
- key performance indicators (KPIs) for customer service operations that make it possible to measure success.
What are KPIs?
The term “KPI” stands for Key Performance Indicator, a quantifiable measure of performance over time regarding a specific objective in various corporate departments such as finance (KPI = cash flow), marketing (KPI = conversion rate) or customer service (KPI = customer loyalty).
Each KPI is closely linked to the strategy of the company or its departments. The strategy sets the goals, and the KPIs measure the progress toward goal achievement. If targets are missed, processes can be readjusted at an early stage. A positive trend in KPIs has a positive effect on employee motivation. KPIs also create transparency and simplify reporting to management.
What is the function of customer service KPIs in aftersales?
Today's aftersales and service teams are responsible for spare parts selling, consulting, and the development of new business models. Aftersales managers should clearly define the primary goals and tasks of their teams and set appropriate aftersales and customer service KPIs. This ensures that service employees know their goals precisely and use the KPIs to identify the potential for improvement in the aftersales processes.
The ten most critical service KPIs
There are numerous KPIs in the various corporate departments. The following metrics are most relevant for aftersales and service teams.
#1 First Time Fix Rate (FTFR)
Definition: How often is a problem fixed during the first contact with the customer?
Indicator: The FTFR shows whether your service technicians have the necessary information and spare parts to fix a customer‘s problem quickly and efficiently. The higher the FTFR, the more satisfied the customer.
Formula: FTFR = number of successful first-time fixes / total number of all service requests * 100
#2 Average Reply Time (ART)
Definition: Average period of time a customer has to wait for a response
Indicator: This key metric measures how long it takes service employees to respond to a request. The shorter the response time, the more effectively the service team addresses customer needs.
Formula: Total time taken to respond to inquiries within a given time frame / number of inquiries during this time frame
#3 Service Level Agreements (SLAs)
Definition: The amount of time a company takes to respond to and resolve different types of incoming inquiries from customers
Indicator: Time-based deadlines agreed on by the customer and outlined in contracts or in the terms of service. This key figure shows how quickly and reliably service teams work. The shorter the response time, the higher the service level.
Formula: Depends on the deadlines outlined in contracts or in the terms of service
#4 Order Cycle Time
Definition: Average time taken to process an order from the receipt of the service request to the execution
Indicator: A short order cycle time means that the customer service team is working efficiently, and this can increase customer satisfaction. Order cycle time is a useful metric for measuring the efficiency of the fulfillment process. The shorter the order cycle time, the more responsive the company is regarding customer orders.
Formula: Time from the first contact to the closing of the service request
#5 Cost Per Order (CPO)
Definition: The total cost of acquiring and fulfilling a single order, including marketing, manufacturing, storage, shipping, and other expenses depending on the business
Indicator: A low CPO and a high level of customer satisfaction are indications that resources are being used efficiently.
Formula: Cost per order = total costs of all orders / number of orders processed
#6 Sales Growth
Definition: Sales growth measures the degree to which the aftersales team increases the company’s revenue over a period of time.
Indicator: Positive sales growth in aftersales shows that the chosen service strategy is effective. If this is not the case, service processes have to be optimized or new business models must be developed.
Formula: Sales growth = (current period sales - previous period sales) / previous period sales * 100
#7 Spare Parts Availability
Definition: This KPI measures the effectiveness of a company's spare parts management within the aftersales and maintenance teams.
Indicator: Aftersales teams aim to solve customer problems as quickly as possible and avoid downtime. High spare parts availability improves FTFR, shortens repair times, and increases customer satisfaction.
Formula: Determining the availability of spare parts is a major challenge for many machinery and plant manufacturers — especially if they are selling through different retail channels. An ERP or aftersales tools are helpful here.
#8 Net Promoter Score (NPS)
Definition: Measures the satisfaction and loyalty of a company's customers with a score from 1 to 10
Indicator: The NPS indicates whether a customer would recommend your company to others. This key metric is based on the answers to the question "How likely is it that you would recommend our company to a friend or colleague?" A high NPS indicates a positive customer experience.
Formula: Customers can enter the probability of their recommendation on a scale of 1 to 10. This results in a classification that includes Detractors (unhappy customers, 0-6), Indifferents (satisfied but unenthusiastic customers, 7-8) and Promoters (loyal customers, 9-10). NPS = % Promoters - % Detractors
#9 Mean Time To Repair (MTTR)
Definition: The average time it takes to repair a system or a device (usually technical or mechanical) and return it to service after a failure
Indicator: A low MTTR shows that the employees in aftersales and customer service solve problems quickly and efficiently. This ensures cost efficiency and satisfied customers. One of the conditions for this is that service operations are planned efficiently.
Formula: MTTR = total time spent on repairs / number of repairs
#10 Capacity Utilization
Definition: Percentage of available time that service employees spend on billable activities
Indicator: Use this key figure to measure how busy employees in aftersales and agents in customer support are. The benchmark is a value of 85%. At 100%, the workload would be too high, while a value of 50% indicates that half of the employees' capacity remains unused.
Formula: Utilization = time available for technician assignments or customer support / actual time required
Recommendations for the practical use of service KPIs
These ten key figures in aftersales and service are merely a sample. To successfully measure and optimize your processes using KPIs, focus on the key figures that are important for your strategy. As you do so, make sure that you
- set targets for your department, for example improving service quality or increasing customer satisfaction.
- identify strategic measures to achieve your goals.
- define important KPIs for measuring success.
In addition to a strategy and KPIs, you need a software that helps you measure your goals. In order to achieve a high service level in mechanical and plant engineering, you need one single solution that unifies all aftersales, spare parts, and other service information. In addition, integrations into the ERP and CRM systems should be available in order to determine spare parts availability and the number of customer contacts.
Keep your key figures under control with Quanos
Quanos InfoTwin is a cloud solution for aftersales and service processes that offers service managers a great start into KPI management and the digitalization of aftersales and service operations. The cloud solution combines technical product documentation, spare parts management, and service information in one single platform. This enables your employees to complete their tasks quickly and effectively and improve service quality anytime, anywhere.
Example: How can you improve your MTTR?
Quanos InfoTwin bundles spare parts and service information in a centralized and well-structured manner. This enables service technicians to find the required information more quickly and solve customer issues faster. And even less experienced employees can achieve a good MTTR. Thanks to Quanos, spare parts information can be enriched with additional service knowledge or step-by-step instructions.
The benefits for you and your customers
Quanos InfoTwin reduces your employees’ workload and is also profitable for your customers. The ecommerce interface enables you to sell your spare parts through a B2B customer portal. At the same time, machine operators and service technicians can search, identify, and order the spare and wearing parts they need using the self-service portal and also gain access to additional machinery and equipment services.
Contact us now and find out how you can optimize your company's aftersales and service KPIs with Quanos and achieve your business goals.
