Posts Tagged ‘Service Margins’

New TSIA Benchmark Survey Lauched

Monday, July 26th, 2010

Last week, we launched the completely new and much anticipated Field Service and Support Services TSIA Benchmark Survey. This new benchmark survey is a significantly revised and updated version of the TSIA benchmark survey, which TSIA member companies have been using for the past 3 years.

I have been absent from these blog posts for the past several weeks because I have been feverishly working – along with others in TSIA – on finalizing this new benchmark survey and benchmark tool. I’m proud to say we’ve finished our initial efforts, and the new benchmark survey and survey tool is now available to our member community.

The benchmark survey has undergone a radical transformation. We’ve developed completely new online software members can use to access the benchmark survey. The old benchmark survey questions have been revisited, revised, and updated, and we’ve added more than 100 new questions to the new survey.

The new online software includes many features aimed at easing the process of completing the survey, including:

  • The ability to logon, log off, and log back on again later and resume the survey where you left off.
  • Multiple user logins, which allows different people in an organization to complete those portions of the survey with which they are most familiar.
  • Built-in “skip logic” automatically “hides” those questions in the survey that are not relevant to the survey respondent based on answers he or she provided to earlier questions.
  • Detailed explanations and instructions tied to the questions eliminate different interpretations of the questions, thus ensuring consistency in the answers.
  • And much, much more.

The new TSIA benchmark survey covers all major aspects of customer support operations:

  • FINANCIALS, including:
    • Service & support revenue and growth, margins, cost center vs. profit center, service revenue allocations, SaaS/Cloud revenue allocations to service, etc.
  • SUPPORT CENTER OPERATIONS, including:
    • Quality programs, direct vs. outsourced employee data, call handling statistics, service incident response & resolution times, multiple support channel data (phone, email, web portal, chat, social media, etc), priorities & types of incidents, support rep labor rates, costs per service incident, customer/support rep ratios, much more.
  • FIELD SERVICE OPERATIONS, including:
    • Assignent & dispatch methods, response & resolution times, first visit fix rates, call back rates, SLA compliance, remote diagnostics & remote problem resolution data, training, muti-vendor services, field service labor rates, costs per field service incident, more.
  • SERVICE SPARE PARTS, including:
    • 1st pass fill rates, backorder rates, call backs due to lack of parts, spares inventory values as a % of revenue, inventory variances to book values, parts used per incident, parts $ per incident, DOA & NTF data, security measures, spares planning methods, outsourcing practices, end-of-life practices, more.
  • DEPOT REPAIR, including:
    • Customer repairs, “walk-up” or “drop-off” repairs, field technician repairs, RMA processes, advance exchange practices, “new” vs. “equivalent to new” exchanges, 3rd party repair vendors, turn-around-times, not-economical-to-repair (NER) thresholds, repair technician labor rates, etc.
  • ENTITLEMENTS, including:
    • Maintenance contract & warranty data, methods of pricing contracts, list vs. net pricing, contract pricing fees, T&M fees & per incident fees, initial contract attach rates, contract attach rates during/at end of warranty, contract sales compensation practices, warranty credit allocations, much, much more.
  • CUSTOMER SATISFACTION, including:
    • Customer survey methods, survey completion stats, customer satisfaction scores, satisfaction data by support channel (phone, email, web portal, chat, etc.), satisfaction by direct employee vs. outsourced employee, customer loyalty data, compensation based on customer satisfaction.

Of course, we also gather DEMOGRAPHIC data in the survey, such as industry and company size. So we can segment the data we gather accordingly for meaningful comparisons among our member companies.

We can honestly boast that no other survey anywhere gathers the breadth and depth of the data the TSIA benchmark survey gathers about service and support operations. If you are a TSIA member, we urge you to complete the new benchmark survey at your earliest possible convenience.

If you are NOT YET a TSIA member, I personally encourage you to check out this valuable association for service and support organizations here. You can also CONTACT ME and I’ll put you in touch with right people who will explain all the benefits and details.

Thanks for your interest – IT MATTERS!

MICHAEL ISRAEL

“MAINTENANCE PRICING PRACTICES” REPORT AVAILABLE FOR DOWNLOAD BY TSIA MEMBERS, AND FOR PURCHASE BY ALL OTHERS

Thursday, March 25th, 2010

When we publish a new research report here at the Technology Services Industry Association (TSIA), it is our custom to initially share that report on an exclusive basis with those people who made the report possible. Generally, the people who complete the surveys that provide the underlying data for our research reports get exclusive access to the reports for the first 90 days after the reports are published.

We published our landmark Maintenance Pricing Practices report in January. Now I’m happy to announce that this significant research is available to our entire TSIA member community and to the non-member community as well. TSIA Field Service members can download the report here. TSIA Support Services members can access the report here. If you are not a TSIA member but you would like to learn how you can obtain a copy of the report please contact Diane Brundage of the TSIA at diane.brundage @ tsia.com. Or you can drop me a note at michael @ tsia.com and I’ll point you in the right direction.

The Maintenance Pricing Practices report contains valuable data about how companies price, sell, and renew their service and maintenance contracts. It also reveals the strategies many companies are deploying to protect, and even grow, maintenance revenues in the face of increasing customer pressure to lower these prices. Following are highlights of just some of the data and recommendations included in this research:

  • Examine the management structure of your service organization. Firms with senior vice presidents (SVPs) or higher leading their maintenance and service activities produce the largest service profit margins, enjoying a potential average boost of more than 4%.
  • Seriously consider adding technical account managers (TAMs) or similarly named dedicated resources or services. Companies that offer such dedicated resources achieve up to 12% higher initial service contract attach rates. They also report an average increase in service revenue of up to 10%.
  • Give those responsible for selling maintenance and service contracts essential sales and negotiation skills training. Teach them the value proposition of service and support. A well trained sales team can generate up to 4% more service revenue, and nearly that much more service profit margin. They are also adept at selling more premium and longer-term contracts.
  • Designate a specialized team to sell service contract renewals. In addition to sales training, teams that specialize in selling service contracts are, on average, more successful at selling contract renewals without concessions or discounts.
  • Evaluate adding evergreen or auto-renew clauses to service contracts; evergreen contracts have a high incidence of automatic rollover to a new contract.
  • Avoid delays in signing service contract renewals; delays inevitably lead to discounts.
  • Focus on converting expiring warranties to service contracts. High warranty to contract conversion rates drive up margins in hardware companies.
  • Compensate senior and line management based on service profitability. Such compensation plans positively impact service margins in enterprise hardware.

If you’re a member, please visit our website today and download your free copy. If you’re not a member, contact us to learn how you can obtain a copy – or better yet, become a member and get access to this and all future such research!

Thanks for your interest – IT MATTERS!

MICHAEL ISRAEL