By Mike Moore
In part one of this blog, I discussed how departmentalization creates a financially sound organization and why key performance indicators (KPIs) improve decision-making and overall strategy. With so many KPIs to choose from, which measurements will offer the best look at your company's performance?
Here are five KPIs to ensure your business' success this year.
Revenue per employee
Ideally, your revenue per employee should be over $170,000, but anything over $130,000 is considered adequate by industry standards. If your measurement of this KPI is lower than $130,000, you may need to improve company culture, operation efficiency, marketing efforts, or staffing.
Each Comfort Advisor should aim for $1.2 million in annual residential replacements. If your Comfort Advisors close at a good rate of 50 percent, keep their average tickets above $5,000, and work at least eight system sales leads per week, they'll easily hit $1 million. If your retail sales are underperforming, re-evaluate whether your team is doing these four things: managing leads to the final disposition, following a set sales process, offering financing on every job, and listening to the customer.
Revenue per service vehicle
Your revenue per service vehicle should be more than $200,000 annually, with a corresponding gross margin of at least 55 percent. If your performance outcome is underwhelming, review your pricing, first-time rates, callbacks , operational inefficiencies, and opportunities for additional work to improve revenue.
Shoot for an installation revenue of at least $375,000 per installer annually, but we love to see numbers well above that. Pay close attention to your internal processes, staffing during busy seasons, and communication between sales and installation teams to improve this KPI.
You should have 1,000 maintenance agreements for every $1 million in annual residential replacement and service revenue. More is always better in this case, so make sure each employee understands the purpose and process of the maintenance program. Don't forget to include touch points in your marketing plan demonstrating homeowner benefits that your employees can easily endorse.
Measuring these KPIs will give your business the push it needs to outperform the competition and grow your employees, processes, and profits.