All service Providers pride themselves on their Service Departments FCE (First Call effectiveness). However many don’t know their FCE percentage and others aren’t sure how to calculate their FCE properly, or worse they are informed by consultants who lower the standards of measurement by including things like courtesy calls, which creates the perception of doing well above average.
In explaining the cost impact of your FCE, I will first define a service call as an activity where a technician is dispatched to a customer location to fix a problem. Virtually any other service call that happens is created by the dealer or technician. If it’s a callback, (tech), Hold for part (dealer), Courtesy calls are dealer created, etc. So, ask yourself this question, if you took your car in for service, you expect it to be fixed the first time correct? If you had to take it back two or three more times to resolve the original complaint, how would that make you feel about the service organization, how would you describe your customer experience, or how eager would you be to refer this service provider?
Dealers who include dealer generated courtesy calls where no parts are used are padding their numbers which deceives their good intentions towards constant FCE management and improvement. Proper FCE is the percentage of time the customer called, and the device was fixed the first time (First Call Efficiencies)
Today service providers cannot operate on what I call DFCE or Delusional First Call Effectiveness; I hope you all agree.
Here’s why your FCE is important. First, I will say this. A service providers FCE % is a critical component to how their Customers Experience is valued. The highest cost of a poor FCE or DFCE (Delusional First Call Effectiveness) is a lost customer’. Improving the Customer Experience of your deliverable is a constant process. In this fast-innovative world of ever-changing technologies. Service providers must not take customer relationships for granted.
“You can be the vendor with the greatest relationships, and quickly lose to the new unknown competitor who provides a better Experience.”
So, we all agree that customers appreciate quick solutions to problems, we should also agree that customers value their service providers by the experiences they provide them. Even above the relationships, they have with them, and we should all agree that doing things right the first time is a centuries-old concept which is more important than ever today.
“Today’s Customers do not have time for Products, Processes, or People who do not provide the experience they desire.”
Now let’s talk about the dollar cost to your organization of a poor FCE % rating. It’s simple it’s all about the numbers it’s your payroll dollars. Service Providers largest cost is parts and people. Each employee has an hourly cost. Assuming your hourly burden is $60.00 an hour, and your average service call takes an hour plus travel time of say 30 minutes, your cost is 90.00 in labor per call. So, if your organization is running a 50 % FCE meaning 50 % of your calls require a callback. Here are the numbers.
Let's look at an organization with five Technicians who average four calls a day. This organization would have 20 total calls a day.Ten require a callback or 50 % FCE rating. In dollars, this would be ten calls times your 1.5-hour average call time including on-site and travel or $90.00 per call equals $900.00 per day. Accounting for a 20 day work month our total equals a $18,000 FCE cost.
That is a large amount of wasted spend for a dealership with only four technicians. Most would agree that no service organization could reach a 100% FCE rating, but we must also agree that a 50 % FCE, or not knowing your FCE is unacceptable, and the dealer with an 80 or 90 percent FCE based on inaccurate benchmarking is deceiving.
So, let’s do the math on a 72 % FCE rating. A dealer performing 20 total calls a day with a 72 % FCE rating meaning 14.4 calls were completed on first call leaving only 5.6 callbacks. The cost of 5.6 callbacks times our $90.00 per hour burden rate with an average call on-site repair time of one-hour equals 504.00 a day or 10,080.00 per month.
Result. If an organization with five technicians dispatched to four calls a day increased their FCE % from 50 % to 72 %, they would lower the cost in service hours by $7,920.00 a month, or $95,040.00 a year in Savings, not hype or fantasy real bottom line dollars. It's the math it's the numbers.
Think about this; In this example organization with five technicians, their customer base would produce around 30 Million pages a year. If they decided not to increase their FCE from 50 % to 72 % giving up the $95.000.00 in potential yearly savings. This overspend would translate to .00316 additional per copy cost for every copy this organization’s customers’ produce, 95K divided by 30 million pages equals .00316. Now add the Toner, the parts, and of course the W-2 on all your technicians. It would be hard for this example organization to raise all their customers per copy charge by .003 per copy, or lower all their technicians pay by that 95K in overspend. However, it just takes the discipline of leadership looking at and acting on the best data to get the same financial result.
An accurate FCE measurement is imperative to understand the hidden cost of service. All leaders who understand their numbers embrace their numbers. These leaders understand the value in knowing their numbers. They realize very quickly numbers don’t lie, and numbers are unemotional. Dealer Owners most definitely understand it’s in the numbers where their success or failure is determined.
So, what if this example was a dealer who had 30 techs, 40 Techs, 50 or 100 Techs? Knowing the facts and then managing the disciplines to accomplish one’s goals of success takes leadership and Data.
The FCE is just one of many cost factors involved in truly understanding your service cost, and increasing the value of your end-users Experience. There are many components to the service deliverable, and understanding how all these components impact each other is a must for the Imaging Channel. In my next article, we will discuss the reasons for Callbacks (CB) and how to prepare and prevent those unnecessary callback excuses which effect most importantly your Customers Experience and your FCE percentage rating.
For over 25 years BEI Services the worlds largest database of service metrics for the Imaging Channel. With hundreds of organizations and thousands of Technicians on the BEI Platform, the data and statistics we provide to our partners are unprecedented in helping them achieve best in class benchmarks. It is from the knowledge of facts in our Trade Marked Worldstats Database which allow BEI partners to improve by accurate measurement eliminating the emotional noise of complacency.