How To Calculate The True Cost Of a Truck Roll
Technician dispatches, known colloquially as “truck rolls,” are considered a necessary evil for many service organizations. If a customer has a need for service, the organization must dispatch a technician to deal with the issue, whether they like it or not. And they don’t like it. Why? Because companies that rely heavily on a technician workforce consider 25% of truck rolls (TSIA) as non-value-added activities and a tremendous waste of resources.
Those wasted resources used to refer mainly to direct costs – related to human labor and vehicle expenses – but today there are new considerations for calculating the cost of a technician dispatch. Let’s explore four other areas of wasted resources:
When dispatching a technician, companies must consider the Opportunity cost or the loss of opportunity when technicians are unavailable for revenue-producing activities. Diverting your workforce from money-making jobs so they can repair an item under warranty is a real loss leader.
For example: Mike is a service technician who works for an appliance manufacturer. On average, he is dispatched to five scheduled jobs per day. On Monday, he completed five installations: two dishwashers, one washer/dryer combo, one dishwasher, and one free-standing range. While installing the range, Mike pointed out that their hood needed to be replaced, earning himself a bonus for the upsell. These five jobs netted the company a nice profit. But on Tuesday….Mike’s five jobs are all repairs for appliances that are under warranty. Not only do each of these dispatches cost the company money, but they also lose the opportunity for Mike to generate additional revenue.
With non-stop availability the baseline in today’s fast-paced business world, any downtime is equated with revenue loss. With equipment failures and other hardware problems contributing to close to 40% of all reported downtime, it should come as no surprise that companies will often dispatch first and ask questions later. The alternative? Unhappy customers waiting days without Internet service or a working coffee machine.
For example: Joe works for an office equipment supplier that has a guaranteed four-hour Service Level Agreement (SLA) with its customers. When the office manager at a busy enterprise calls to report that their network printer is down, the supplier does not have the luxury of asking too many questions. To meet the tight SLA, Joe is dispatched right away. The fact that it’s a holiday weekend means that Joe gets double pay plus a free overnight stay at the local hotel, all on the company’s dime.
No Fault Found dispatches
Sometimes, a customer’s issue can be temporary in nature or resolved in under five minutes with a quick fix. Dispatching a service technician to deal with these “no fault found” issues is a waste of company time and resources. Eliminating these unnecessary dispatches can have an extremely positive effect on their bottom line.
For example, Ann is a medical device technician who services equipment in healthcare facilities. Twice last week, she was dispatched to NJ-area hospitals to fix faulty patient monitors. When she arrived, she found the machine unplugged…well, chalk that up to the cost of doing business.
Every tech dispatch is a risk. An unqualified or grumpy technician, a delayed arrival, a missing tool or part can all cost the company its relationship with a customer and its reputation. According to an Aberdeen Group report, 25% of all service calls require at least one follow-up visit to resolve the customer’s issue. This statistic is not very conducive to customer satisfaction. And when customers are not satisfied, they churn. Survey data shows that 39% of Americans who canceled a contract with a company cited customer service as the primary reason for cancellation. 81% of those who canceled did so due to a negative customer service experience.
Example: A telecom company dispatched a team of field service technicians to install cable in new-construction residential homes. One technician unfortunately fell short of company expectations. He arrived late, was unfriendly to the customer, and ultimately, was unable to complete the installation due to out-of-code-wiring. Even though the need for a repeat visit was not his fault, the overall customer experience was negatively affected by his demeanor, and the customer chose to take his cable business elsewhere.
So, how much does a truck roll cost a company?
This new thinking highlights that the cost of the truck roll is more than just the labor hours and materials; it can also be the difference between the amount the company spent and the amount it could have earned or accomplished elsewhere had the technician dispatch not been necessary.
For a full explanation on how to calculate the actual cost of a truck roll, including a cost breakdown and comprehensive expense analysis, download the full report here.