6 Trucking Business KPIs Every Carrier Should Know Part II
Catch up with Part I and see what other trucking business tips we’ve curated for carriers.
from DBSquared Inc.,
YOY stands for year-over-year. It can be used to measure any aspect of your trucking business, such as growth, revenue, expenses, salaries, fuel costs, and so on. These year over year measures help you understand whether financial performance is improving or declining overall as well as within individual categories.
AOV stands for Average Order Value. Average order value is a calculation based on the total dollar amount of all loads your trucking business fulfilled in a given period of time, divided by the number of loads. You can use this KPI to project future revenues based on whether you anticipate fulfilling the same, more or less loads in the future as you did before. This is another number to watch for changes over time. If you begin taking on a significant number of loads that fall below your average load value, it will drive this number down and may negatively affect other KPIs such as customer lifetime value. You can also vet potential new business as it pertains to average load value as a standard.
CSI stands for Customer Satisfaction Index. Your trucking business’ customer satisfaction index is an average based on all customer satisfaction scores during a specific period of time. If you see a drop in customer satisfaction scores compared to the index, it could indicate a problem within your organization as it impacts the customer experience.
Declines in customer satisfaction are often accompanied by increases in customer churn (or decreased customer retention rates). Since this can reduce your customer lifetime value and require additional customer acquisition activities to replace departing customers, it’s a very important metric. Measuring customer satisfaction scores on an on-going basis can alert you to small problems before they lead to big losses.
You can also measure trucking business KPIs like customer satisfaction index against competitors and the industry as a whole. For instance, the most recent American Customer Satisfaction Index on consumer shipping shows FedEx unchanged in 2016 compared to 2015 and UPS down 2 percentage points to a CSI of 80. Trailing in the field is the U.S. Postal Service, which also lost 1 percentage point last year and came in at 74 in the most recent report. The report also speculates on whether Amazon’s recent acquisition of trucks, airplanes and other transportation and logistics resources indicates they are preparing to formally enter the delivery and transportation business, and how this development would impact rivals FedEx, UPS and the USPS.