As a service company we find it challenging to measure project profitability and client satisfaction. What measures and metrics do you find most useful?
Advice from the CEOs:
- For billable services: utilization percent defined as (hours available for service delivery)÷(billable hours)
- Include in the denominator both billable hours and customer good-will or preventative maintenance hours. The latter, while not producing current income, are an investment in future income.
- Set up audits for service needs, especially future needs, when working with customers. This will help you to stay abreast of changes in the service environment and to plan accordingly.
- For fixed budget projects – measure budgeted vs. actual expenditures by project.
- For fixed-fee services: a fraction expressed as: (income per customer company) ÷ (cost in hours for that customer)
- Customer audits and surveys. Options
- Exit “pizza party” with the client – may produce tainted results. While this builds customer good-will and may provide qualitative feedback, it should be supplemented by more objective measures.
- Mailed survey – from 3rd party with a prize for responding.
- Email follow-up from 3rd party that directs you to the 3rd party site to complete the survey.
- Ambassadorial CEO visits to the top contact person in key accounts
- Opportunity to learn about the customer’s present and future needs, staffing plans, business and strategic direction. Helps to anticipate changes in the competitive landscape.
- The more your business relies on recurring revenue, the more important these visits are.
Key Words: Service Metrics, Project Profitability, Resource Utilization, Customer Satisfaction, Business Trends