Ever feel like you're throwing darts at a constantly moving target while trying to plan a strategy to grow your home service business? Contractors who become business owners tend to know their industries inside and out, but feel less confident when it comes to financial decision-making or expanding business operations.
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Oftentimes, HVAC contractors, plumbers, electricians and others in the skilled trades keep so busy working in the business, they never find enough time to work on the business. They don't understand the power of using data analytics to drive marketing, or track important key performance indicators (KPIs) that matter most for their service company.
The good news is, you don't need a college degree in money management to learn how to grow your small business and improve profitability, says Ismael Valdez, owner of NexGen Air Conditioning, Heating & Plumbing in Southern California. You simply need to harness your own customer data to make better educated decisions.
That's how Valdez took his HVAC and plumbing business from zero profitability to $30 million in just four years, and he credits the powerful reporting capabilities of ServiceTitan for helping him grow so quickly. He adopted the digital software for the trades in 2016 and used it to track his most important KPIs, monitor his team's performance, and work more efficiently.
“That’s when I started … tracking everything we do on live reporting,” Valdez says. “Most contractors don’t realize that, because they’re just on cruise control, and they don’t realize how powerful and how important it is to know that.”
When you utilize ServiceTitan business software to automate and streamline real-time customer data, it's much easier to track specific KPIs, identify your team's strengths and weaknesses, and leverage that data to make more strategic business decisions.
Below, we delve into the top KPIs for service companies to track in order to gain insight on the performance of their technicians, CSRs, marketing, sales, and finance, as well as explore other ways ServiceTitan helps companies use critical data and streamlined reporting to drive business.
Why is data so important to service experts?
Many home service businesses rely on financial reporting to gain insight on overall company performance, often spending hours searching for information on important KPIs or missing potential opportunities because they have no access to real-time data.
Data gleaned through traditional reporting can also be hard to digest, since the process often requires merging files and manipulating data to find the results you need. And when you finally locate the right data and metrics upon which to gauge your company, the information is out of date.
ServiceTitan’s digital dashboard gives you an at-a-glance, real-time view of actionable data and relevant KPIs that text-based reporting simply can’t provide. In addition, with ServiceTitan you can customize and prioritize data specifically for your business reporting needs.
Vanessa Gonzales, co-founder and co-owner of Albuquerque Plumbing, Heating & Cooling, says ServiceTitan's software for HVAC and plumbing services helped her company achieve $13.5 million in revenue in 2020—in the midst of a pandemic.
“The investment we made in getting better software to elevate our customer experience paid off ten-fold,” says Gonzales, who also serves as ServiceTitan's Senior Manager of Product Utilization and Customer Experience.
She says ServiceTitan’s intuitive, user-friendly platform led to increased profit by:
Providing real-time data.
Powering better marketing.
Increasing call booking rates.
Improving customer experience.
Driving sales.
Uncovering missed opportunities.
Start making data-backed decisions — see how
Top KPIs for contractors to track
To improve efficiency workflows and know exactly what it takes to cover your overhead and increase profits, business owners must know which KPIs to track specifically for their business.
For instance, when you change pricing on service or diagnostic fees, how does that impact booking rates? When technicians turn over calls to your sales team, how many do they convert into jobs? How much new revenue can you uncover by simply following up with homeowners?
To answer any of those questions accurately with real data, contractors must track the top KPIs for technicians, marketing, CSRs, sales, and financials, says Valdez.
Top KPIs for technicians:
Average Ticket: Track how many opportunity calls each tech handled per week or per month, and how much revenue each call produced. This includes tracking each tech’s average ticket on all repairs and turnovers, as well as their closing percentage on both.
Turnover Rate: Service techs often turn over calls to a project manager or senior service technician to educate customers about a high-cost repair or possible replacement options. Track turnover calls, how many result in sales, and the average ticket from each.
Zero Tickets: A “zero ticket” means the customer bought no services, and they likely won't call back. Train your techs to always offer good-better-and-best options on every service call to increase your chances of securing a future customer.
Memberships: Track memberships, but don't beat yourself up over how many your techs sell, Valdez says. Before the internet and social media, homeowners often waited around all day for one contractor to show up at their house. Today, they just contact the next guy on the list. Focus, instead, on building a loyal customer base using the data in your ServiceTitan dashboard.
Top KPIs for marketing
Valdez and other service experts say marketing is the most important KPI to track, since it's the fuel that powers your engine. With marketing, contractors should track:
Gross revenue per lead source.
Number of leads generated per source.
Closing percentage on each marketing lead.
Budget allocation percentage.
To expand your company's lifecycle rapidly, plan to allocate 12 to 14 percent of revenue to your marketing budget and thoroughly research which marketing tactics are working best for your company.
Marketing Pro, an add-on feature of ServiceTitan, supercharges your ability to target marketing to current customers through your ServiceTitan database and easily see which unique marketing campaign generates real results.
ServiceTitan features also include:
Online Reviews: Generate more reviews by automatically texting a direct link to customers as soon as you finish the job.
Instant Online Booking: Allow customers to self-serve and book their own appointment online through ServiceTitan's web scheduler API and Google Local Services integration.
Pricebook + Mobile Estimates: Give your service technicians a visual pricebook and mobile estimates, so they can sell with confidence in the field.
Marketing ROI Tracking: Generate more job leads by measuring the success of every marketing campaign with unique trackable phone numbers.
Marketing Pro Reputation: Generate more online reviews from happy customers to create a solid reputation that attracts more leads and revenue.
Marketing Pro Direct Mail: Know which areas or customer zip codes generate the most revenue and send targeted marketing postcards to homeowners in those areas.
Follow-up on Estimates: Follow up with customers who never responded to unsold estimates with simple tags and filters on your ServiceTitan dashboard.
Top KPIs for CSRs
The digital technology of ServiceTitan not only records every customer call to create better training opportunities and expand your CSR team's know-how, it also tracks:
How many calls each CSR takes in a day.
Booking percentage of those calls.
Email captures turned into booked jobs.
Outbound follow-ups converted to booked jobs.
Build customized reports and dashboards to view technician scorecards or CSR booking rates to stay on top of the key performance indicators that matter most for your business. Use the data to identify training opportunities to help your team convert more calls into booked jobs and provide better customer service.
Top KPIs for sales
The most important sales KPIs to track are:
Average ticket size.
Average discount.
Number of opportunity calls made.
Number of opportunity calls closed.
Opportunity-to-close rate.
Valdez says 80 to 90 percent of NexGen Air’s revenue results from his project managers closing sales on marketed leads or turnover calls from service techs. He expects a healthy project manager to run at least a 35- to 40-percent closing rate.
Top KPIs for financials
For top financial KPIs, it's important to know your:
Gross profit margin
Set overhead
Break-even point
Business owners must closely track monthly expenses (overhead) and gross profit to know exactly how much to target in revenue. Once you know the goal, you can work backward to determine pricing for services, materials, and labor.
Creating a budget for your company, Valdez says, is like following your car’s navigation system. It tells you how fast to go, whether you need to slow down for traffic up ahead, and when you can hit the gas as the road clears.
“Your budget tells you exactly how you’re doing, what you should be doing, and where you should be going,” Valdez says.
Other ways ServiceTitan helps companies use critical data and reporting to drive business:
Create a tiered bonus system that compensates selling techs fairly, supercharging sales.
Track tech performance for: most revenue per opportunity call, most sales per lead, the dollar value of those jobs, and number of opportunity calls. Then dispatch for profit by sending the most skilled tech to the job.
Present good-better-and-best options in a clear digital format, complete with photos and product descriptions, to increase average tickets for techs.
Create more workflow efficiency with prompt dispatching, accurate invoicing, and timely follow-ups.
Use real data to create better coaching opportunities and allow the whole team to grow.
Use tags to screen hundreds of calls in no time, to uncover missed opportunities.
And so much more!
ServiceTitan Software
ServiceTitan is a comprehensive software solution built specifically to help service companies streamline their operations, boost revenue, and substantially elevate the trajectory of their business. Our comprehensive, cloud-based platform is used by thousands of electrical, HVAC, plumbing, garage door, and chimney sweep shops across the country—and has increased their revenue by an average of 25% in just their first year with us.
