Chris Hunter identifies eight KPIs home services companies should track: average ticket, membership closing rate, technician job-to-sale conversion, labor as a percentage of revenue, call booking percentage (aim for 90%+), gross profit per unit, equipment and material costs, and lead turnover speed. Departmentalizing financials and using benchmarks reveals where problems hide.
Questions this video answers
Eight.
Around 90% or greater.
We know that what gets measured and recognized not only gets improved, but it'll get repeated. Hey, Titans. Today we're going to Talk about what KPIs should you be using in your business? Here's the easy answer. Any area in your company that you want to see improvement, you should be using KPIs. Ah, sounds easy, right? Well, it can be. Servicetitan makes it really easy to start measuring. In fact, every position in your company could have KPIs that could be measured. I'm talking from the office to the warehouse to the field, sales. Everything can be measured and KPIs can be used. But for today's purposes, I want to simplify this. I want to share the top eight KPIs that I think every company should use and that I used in my business. So here we go. Number one, average ticket. It's an important KPI. This KPI is the scoreboard to see how we are performing out in the field. Number two, membership closing percentage. I love this one because I'm a huge believer in club memberships or service agreements, whatever you call it at your company. But this is the tool that provided the shoulder season full of work, all those loyal customers. It was just a win growing this club membership base. But if you're not measuring how many times you're sending the technician out and how many times they convert them over to a club member, how do you know who's doing well, who's doing bad? Next one is closing percentage. Now, this is we send them out, how well are they actually turning that into revenue for us and closing the deal? Very important to measure. Easy to measure, too. Number four, labor as a percentage of revenue. Hmm. Are you tracking your labor percentage in each business unit? What is that as a percentage of revenue? Believe it or not, there's some industry benchmarks there, and if you hit those benchmarks, you know that you're doing pretty well. If you're way above them, then, uh, oh, what are we. What do we have an efficiency problem? Do we have a pricing problem? What's going on here with our labor percentage? Number five, call booking percentage. We spend a lot of money to get the phone to ring. We market. We do all these things and it finally rings. And if we're not measuring accurately how well we're booking a job, we're just letting money go down the tube, right? So you got to measure call booking percentage. You might think it's pretty high, but actually the industry average is actually really low. It should be around 90% or greater. Number six. Gross profit percentage per business unit Hit. Here's the thing. If you're not departmentalizing yet, I encourage you to do so. The reason why is when you start measuring gross profit percentage per business unit and you know what the industry benchmark is, you may quickly find that, oh, here I thought we were doing well and we were profitable, but in all actuality, one department was doing really well and the other was actually losing money. Well, you don't know unless you're using KPIs to actually see how you're performing and departmentalizing in those. So let's go on to number seven, which is equipment and material cost percentage. I love this one. I could quickly look at my financials and see exactly if the equipment was right on par with the benchmark that we knew that KPI should be. Same way with materials. If it was ever off, I knew we had a problem and we could dig into it and figure out what was going on there. Number eight, last one here. Lead turnover percentage. I think this one is so critical because to give you an example, in the H Vac world, here's what I do know. I know that one install can be the equivalent of a whole week's worth of gross profit dollars. So let's think about that. Would I rather do one job and make X number of gross profit dollars, or would I rather do a whole week's worth of work to make the same gross profit dollars? That's why we need to measure our lead turnover percentage. Tech generated lead turnover, whatever you call it. So finalize this whole subject. Why you should be using these KPIs and which ones. It's this reason right here. We know that what gets measured and recognized not only gets improved, but it'll get repeated.
