[First Person] Callbacks: They Don’t Tell the Complete Story

Features - Business Strategy

When analyzing your company’s business metrics, are you asking the right questions?

May 31, 2012
Donnie Shelton

So there I was…
As a pilot in the Air Force Reserves, one of the most valuable meetings that I attend monthly is called “Hanger Fly.” The Hanger Fly meeting is an informal pilot meeting that has no agenda, no structure and is completely off the record. The meeting begins with one seemingly simple question: “What have you seen that you think will benefit anyone else?”

The basic objective of these meetings is for pilots to share information with each other so that as a group we become better pilots and learn from each other’s experiences — both good and bad. Usually the meeting is nothing more than pilots telling flying stories that begin with “so there I was…”

That’s the idea behind the series of feature stories I’ve agreed to write for PCT magazine. I want the articles to be very informal and information-packed with no fluff and no agenda. I’m not going to provide you with “advice” or the “best” way to do something. I’m simply going to give you my “so there I was….” story and offer my experience on how I solved it.

I am not an industry “consultant” or “expert,” nor do I claim to be. I am a PCO that has grown my company from $20,000 in annual revenues to $1.5 million in less than five years (and I cannot wait to see what year six will bring). It’s my hope you can learn something from my experiences and I can learn something from you, so give me your feedback. I want to hear from you. We’ll both grow in the process.

Callback Percentage: Does it tell the entire story?
So there I was…
in October of 2009, in my office thinking about the things I wanted to accomplish during the upcoming winter when I overheard a conversation between a couple of my techs that went something like this:

Tech 1: “I serviced Ms. Smith’s home yesterday but I know that I will be going back next week.”

Tech 2: “Why is that?”

Tech 1: “Well, Ms. Smith always wants inside service and for the past year she always calls and reschedules an inside treatment after I do the service.”

Tech 2: “Doesn’t that affect your callback percentage?”

Tech 1: “No, not really. Those orders are considered ‘production’ orders since it is not a re-treatment and I can’t do anything about it.”

Tech 2: “Ahh, okay, so if you have to re-treat but it is not your fault then that does not count against you?”

Tech 1: “Exactly.”

At this point of the conversation, I was completely beside myself. In fact, I started asking myself questions like:

If the tech knows that this customer will call him back each time, why doesn’t he just tell our scheduler so we can confirm each appointment?

Did he tell the scheduler and somehow this information was not being acted on?

I wonder how many additional non-payable stops we are completing that the callback metric fails to measure?

Am I getting the complete story about how well my technicians are being utilized in the field by only looking at callback percentages?

Utilization: Payable VS. Non-Payable?
In my mind, utilization is really nothing more than a metric of how well you are utilizing your resources. In the case of the pest management industry our key resource is time. So I decided to run a report that combined all of our non-payable stops against our payable stops. Here’s the formula I used, followed by a brief description of each element of the formula:

(callback orders + production orders) / total orders.

Callback Orders = Non payable re-treatment services for an insect covered as part of our agreement

Production Orders = Non payable treatment for any other reason (customer not home and wanted inside service, etc.)

Total Orders = All payable and non payable orders

Below is a snapshot of our true utilization once we accounted for production orders in 2009 (Table 1).

To say that I had a good helping of humble pie after generating this graph could possibly be the understatement of the year. Before viewing utilization this way, I felt very proud we were able to keep our callback percentages in the 4-6% range. As the graph indicates, viewing stops as payable versus non-payable exposed that we were not performing as well as a company as I thought we were. In fact, in terms of payable versus non-payable, we were averaging about 88% utilization, well south of the 96% that I thought we were operating at!

How we tried to increase utilization at Triangle
Vince Lombardi of the Green Bay Packers was arguably one the most effective coaches that has ever coached in the National Football League (NFL). In one year Lombardi led the Green Bay Packers, at that time the “worst” team in the NFL, to a winning season and then on to several Super Bowl championships. Remarkably, he did it by focusing exclusively on the fundamentals of the game.

With this in mind, we focused on fundamentals to improve our utilization rate. Specifically, we looked for ways to encourage technicians to manage their routes more efficiently by reducing production orders. So we focused on the following changes.

  1. We trained our techs and our office staff on the importance of viewing stops in terms of payable versus non-payable, not callback versus production. We did this by training our techs and our office staff to view utilization as payable versus non-payable stops, not callbacks versus total stops.
  2. We implemented a new procedure in the office to always work the payable stop first. Meaning that if a customer has a service due in the current month, we first work the payable stop and then if the customer continues to experience issues after the payable stop, we will then generate a callback. While simple, this change significantly increased our utilization with our monthly mosquito accounts.

  3. We completely eliminated reporting callback percentages to the technicians. Instead we developed a utilization report the techs received weekly. This report is simple to understand and clearly communicates to the technician the percentage of stops he or she accomplished that were payable. At first, our technicians protested that tracking technician effectiveness this way was both illogical and unfair. They complained they should not be held accountable for issues of scheduling they could not control. Of course, I gently reminded them that part of being a great technician is to know your customers and work with the schedulers to build a schedule that maximizes payable stops.
  4. We offered incentives to technicians who maintained a utilization rate above 90%. I am a firm believer that you get what you reward. So we created a bonus structure that rewarded technicians with a 90% or greater utilization rate. Once this bonus structure took effect, the conversations around the office changed from “I guess I will be going back to Ms. Smith” to “I have Ms. Smith on the schedule today, did anyone confirm the appointment? I don’t want to service her home if no one is going to be home. Ms. Smith always wants inside service.” That was exactly the conversation that I wanted to hear because now we were catching issues in the morning before we went out to service the account and before we inconvenienced the customer.

Results of our changes

Now, in May of 2011, the report that I ran back in October of 2009 that plots payable versus non-payable stops is a report that I now get weekly. Since implementing the changes, there have been significant positive and measurable changes in both our utilization rate and our customer service satisfaction scores.

Below is a snap shot of this report as of April 2011. As you can see in Table 2, our company has gotten much better at utilizing our time. Increased utilization has resulted in more time to work new business and increased profits. It is worth mentioning that we increased our utilization during a time of rapid growth in our company.

Lessons learned

The most important lesson I learned from this experience is that I should always take the time to evaluate what questions I am asking of my business. In this case, I thought the question of how many callbacks a tech completed gave me the answer of how well our company was utilizing our most valuable resource, time. As it turns out, I was wrong.

By evaluating that question and digging through some data I realized a better question to ask is “How many non-payable stops does our company complete each month?” By evaluating utilization as payable versus non-payable, we were not only able to increase the efficiency of our technicians but also net income and profits to our business.


The author is owner and president of Triangle Pest Control, Raleigh, N.C. To comment on this article or contact the author, write dshelton@gie.net.