Operations Benchmarks & Best Practices
Kislik: Curt has been talking about efficiency and costs. But if companies are looking to increase revenue or boost service levels, they may not want to look specifically at costs. Some companies want to know who's got the best upsell program, for example, or who's increasing order value. I'd like to see what percentage of customers' inquiries/complaints were resolved on first contact. And from a selling point of view, not just from orders per hour, I'd like to see a call-to-order ratio, so you can see how much work the enterprise has to do to get the order.
Barry: The universal agent part of this equation also is important. It makes it much more difficult to get accurate data about activities and units of work. Half the companies we deal with have universal agents, and your ability to analyze that data is part of the challenge there. What's key with benchmarking is measuring year to year and season to season.
CS: Are internal benchmarks more helpful than external ones?
Barry: One of the most effective ways to benchmark is against yourself, one season to another, or year over year, against a standard or expectation. External benchmarks give you a general idea of where to zero in.
Internal benchmarking allows you to focus on trends in specific areas and make positive changes where possible. You may have internal benchmarks that say some aspect of your operations are at 90 percent, but if you have no external benchmark of what's good, you could mislead yourself into thinking 90 percent is good, when it may not be. A combination of internal and external benchmarks works best.
One thing you have to do is look at weighted averages. Otherwise, poor performers or superior performers skew the results.
Kislik: That's really true. Let's look at, say, labor rates in different parts of the country. Curt, do you have data on that?
- Liz Kislik Associates LLC