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Using Critical Metrics to Maximize Your Business

Training. Using Critical Metrics to Maximize Your Business. What- What are the most important metrics to be watching? And how frequently? Why? Running your business blind is a bad idea! How? Where can this information be obtained?. We live in an information driven society.

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Using Critical Metrics to Maximize Your Business

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  1. Training Using Critical Metrics to Maximize Your Business

  2. What- What are the most important metrics to be watching? And how frequently? • Why? Running your business blind is a bad idea! • How? Where can this information be obtained?

  3. We live in an information driven society. • Knowledge Economy- Billion $ Economy • Companies like Google, Intel, & Ericsson value their data as much as service/product they provide. • AT&T

  4. Data is Valuable For These Reasons • Data Aggregation • Risk Management • Digital Experience • Operational Agility • Cross Selling

  5. What Christmas Decor’s Key Indicators (Metrics) • Marketing ROI • Retention Rates • Sales Closing Percentage • Average Sale • Gross Profit • Average Daily Production

  6. What Christmas Decor’s Key Indicators (Metrics) • Marketing ROI • Measures how effective your marketing campaigns are • Individually • Collectively • Provides intel for future campaigns • Content • Timing • Targets • System Avg is $10:$1

  7. What • Retention Rates • Identifies rate of returning business- LIFEBLOOD of Christmas Decor • Year Over Year • Can be measured by count • Or by dollars • Provides info for budgeting • System Average is 73%

  8. What • Sales Closing Rate • Measures how efficient your sales efforts are • Are you missing too many opportunities • Gauge of sales cycle • Identifies top/low performers • Allows for adjustments • Marketing Target • Presentation • Pricing • System Average is 52%

  9. What • Average Sale Amount • Average of all sales to date • Useful for budgeting going forward • Useful in conjunction with sales closing rate • Hi Closing + Low Avg Sale= Poor Outcomes • Creates Standards • System Average= $1389

  10. What • Gross Profit • Revenue less materials and labor (our standard definition) • Adjust ratio of these 2 components • Foundation for profitability • 55%

  11. What • Average Daily Production • Revenue installed per day per crew • Indicator of productivity • Directly correlates to profitability • Improves use of limited operation time • System Average= $2339 (blended average)

  12. Why • Lessens decision cycle • Increases revenue • Lowers operating costs • The bottom line IS the bottom line- Leads to profitability

  13. How • Marketing ROI • As a ratio: Total Revenue/ Total Cost • EX: $10,000 Sales/ $1,000 Marketing Cost= 10:1 ratio • Must track every campaign/tool and service • Track Lead Origination & Record • Train Staff to ask • Use campaign identifiers

  14. How • Marketing Campaign Report • Quantifies campaign results for you • Exportable for further analysis • Requires front end work, but yields HUGE back end results • Must preserve data integrity for quality results

  15. How • Retention Rates • (Current Year Sales/ Previous Year Sales)x100= Retention Rate • Customer Count • Dollars • Or BOTH • Requires accurate records of years being measured

  16. How • Retention Rates • LightRight’s Customer Retention Report

  17. How • Sales Closing Rate • (Accepted Orders/ Proposed Orders)x 100 • Requires thorough record of interactions • May require office to handle sales call scheduling • ALL interactions need to be recorded- even the unqualified

  18. How • Sales Closing Rate • Sales Closing Report • Tracks sales staff progress • Only useable if all interactions are recorded • System generates accurately as long as all orders in input

  19. How • Average Order Amount • Total revenue / number of orders • Requires meticulous record keeping

  20. How • Gross Profit • Total Revenue – materials-labor= gross profit • Overall GP • By job • Requires detailed record of materials used, including IAC • Detailed Record of labor- hours worked & rates paid

  21. How • Job Costing Report • Generates per job gross profit • Includes all materials • Includes all labor, including take down • Investment in tracking crucial info offers significant payoff!

  22. How • Average Daily Production • Likely the most mis-understood metric in our system • Total Revenue/ total # of crew days= ADP • Total Crew Days= aggregate total of days worked per crew • Requires close tracking of crew activity, inside and outside of Christmas Decor business

  23. How • Productivity Report • Only tracks days crew worked

  24. Best Practices • Use systems designed to track data/yield reporting • Only complete and accurate input will yield accurate reports • Use data for operational agility and develop deeper business • Identify indicators that are important to your business

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