What’s the most important key performance indicator for home and commercial services companies to follow? Keith Mercurio, Director of Leadership Development at Radiant Plumbing & Air Conditioning in Austin, Texas, and ServiceTitan’s Director of Customer Experience, has an answer.
It’s the one that affects the most other metrics in the company.
“The No. 1 statistic I see is really conversion rate,” Mercurio says. “It affects our advertising costs, it affects our five-star reviews, it affects our referral rates, it affects our general sense of welfare and success of our technicians or CSRs, our dispatchers.
“And it indicates, what are we doing with the opportunities that we get?”
A new ServiceTitan e-Book intended to help those in the trades up their KPI game includes advice from Mercurio, ServiceTitan’s Chris Hunter and Angie Snow, and industry experts such as Ismael Valdez and Chris Yano. They share tips on:
Why tracking KPIs in the trades is essential
The best ways to implement KPI tracking in your company
Top KPIs to track, including indicators for different roles, and
Suggested benchmarks for dozens of KPIs
Why is conversion rate so important? Because of what it tells business owners about the health of their company, Mercurio says, and because the leaders in many companies are accepting to a lower rate than they should.
“I share this story around the topic for the whole organization to understand,” Mercurio says. “In our industry, you'll hear 70%, 80% conversion rates are acceptable, and you'll find a lot of companies that are low, at 40 and 50%.”
Even the highest of those numbers, he says, is too low. Why? Cost per lead. In the trades, an opportunity to knock on a door can cost anywhere from $50 to $400 in marketing, not including the overhead to dispatch a technician.
“When I walk up to a door and knock on that door as a technician, my company is already, let's say, $150 in the red,” Mercurio says. “We've already lost money on the chance for me to be here.”
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Mercurio asks technicians to think about conversion rate differently from what is traditional.
“Most companies charge, let's call it, $60 to go out to a customer's house, just to take a look at the problem,” he says.
A 70% conversion rate, given the cost to knock on the door, takes on a different meaning.
“They rearranged their day to allow for this,” Mercurio says. “When you have a 70% conversion rate, that means that 30 out of every 100 people who called you, rearranged their day and brought a stranger in their house to resolve an issue were so completely unimpressed with you that they were willing to spend $60 to get you to leave that house without addressing the thing that had bothered them."
But the negatives don’t end there, he says. That 30 percent won’t leave a 5-star review and might leave a poor one.They aren’t going to recommend your services to their friends. And they’re lost as a customer forever.
“And when you put it in that context, it really starts to change the way that we look at conversion rate,” Mercurio says. “How can we be OK with anything less than the 90s for percentiles of customers served?”
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