Six numbers you need to know

The ‘gotta have’ numbers that can help improve your remodeling business. Here’s how to get them.

March 27, 2013
Key Performance Indicators (KPIs) will help you benchmark your business’ perform

Key Performance Indicators (KPIs) will help you benchmark your business’ performance and assure profitability.

Six numbers? I know what you’re thinking. There is only one number that really matters in your business and that’s your net profit. That may be obvious and very true but it’s safe to say that if these six numbers are in order, your net profit will be exactly what you have in mind.

So just what are these six critical numbers? They are Key Performance Indicators (KPIs) that will help you benchmark your business’ performance and assure profitability.

What are KPIs? KPIs help to get insight in your business performance. KPIs are also known as performance metrics, business indicators, and performance ratios. To put in another way, KPIs are measures that help you understand how you are doing against your objectives.

Now, let’s take a closer look at six critically important numbers in your sales and marketing process.

1. Your Inquiry, Set Appointment Conversion Percentage

According to industry statistics, it costs a specialty remodeler about $299 to generate an inquiry or a lead. Does your business treat every inquiry that comes into your business like the gold that it is?

The goal here is to convert as many of these raw ‘inquiries’ into solid, set appointments as possible. How is your business doing in this area?

Often the sloppy, unscripted handling of these precious leads lets too many fall right through the cracks. A big mistake is often over-qualifying the inquiries. Have you listened to how your phone inquires are handled on a daily basis?

You should. Track this important statistic to be sure that your staff is doing its job in making this very important first sale, which is the appointment. After all, without properly setting a solid appointment everything ends right here.

2. Your Set Appointment, Demo/Presentation Percentage

So you spend your $299 and generate an inquiry. Your staff does a great job with it and converts it to a set appointment on Tuesday at 2:00 p.m. How many of these important appointments are evolving to a full presentation/demo giving your salespeople a chance to close the deal?

Are your salespeople cherry picking too many of these expensive leads?

Or maybe the lead has the wrong last name. Tracking this percentage will help you keep tabs on the value placed on these set appointments. To improve your company’s “demo rate” you may want to consider implementing some “pre-positioning” efforts with your prospect prior to your salesperson’s arrival.

3. Your Salespeople’s Closing Ratio

Obviously, excelling in the first two KPIs will have a direct impact on how often your salespeople can bring home the signed contract, thus closing the sale. Having your salespeople hone their sales skills can dramatically impact your success in this critical area.

Be sure to track their closing ratio on both the number of leads

issued and the number of leads actually demonstrated. Ongoing sales training for your staff can be critical to keeping this number up.

4. Your Salespeople’s Efficiency Average

Just knowing your salespeople’s closing ratio doesn’t tell the whole story. What if they have a very high closing ratio but their rescission rate is 30 percent?

This scenario is probably not a good thing for your remodeling business. To tell the whole story, you should track the net revenue generated per lead issued. This number automatically takes into consideration things like sales price, canceled sales, no demos, etc. It’s a great single number evaluation to gauge your salespeople’s performance.

Obviously, the higher the number the better the salespeople’s performance. You can also analyze an additional element to this number by segmenting this statistic by lead source or product type.

Wouldn’t it be great to know which of your salespeople perform better with certain lead sources or which salesperson excels with various product type leads?

5. Your Web Conversion Rate

Knowing your web conversion rate is extremely important to the health of your business. Your web conversion rate the percent of site visitors who do something your company wants them to do—request an estimate, sign up for the sweepstakes, request a consumer guide, etc.

Is your website and/or landing page doing their job? It’s one thing to get prospects to your online presence but it’s another to actually succeed in your objective. Too often, your objective isn’t clear to the prospect resulting in them landing on your page and then leaving without any value to your company. Your web strategies need conversion-ability. Do you have clear calls to action or is your site just a navigational disaster for your prospects?

Be sure you are using Google Analytics, or something similar, to track this important number. This is one area where you may need some industry-specific help to maximize your results.

6. Your Marketing Cost per Sale

Do you truly know what advertising/marketing methods are working best for your company?

In today’s era of higher and higher lead costs knowing this number is very important. Knowing how much you have to spend on each and every marketing method you use to generate a sale—not just a lead—will take the guesswork out of planning out your marketing for the future to reach your goals. This information is like gold and holds the key to keeping your marketing costs down.

What Gets Measured, Gets Managed

Make sense? Of course it does. Is it easy to track these important numbers? It can be if you put systems and technology solutions in place to gather, track and analyze this important data.

The “post-it note system of management” probably won’t cut it. A well laid out software program designed for the remodeling industry is a must. Typically, off the shelf software solutions fall short of adapting to the specific needs of our industry.

There are a number of industry specific solutions that make it very easy to track and analyze these important numbers with concise performance dashboards reflecting your company’s KPIs.

You can manage your business by the numbers or manage by Maalox.

The successful companies of the future will not neglect the importance of knowing their numbers. Dedicate yourself to absolutely knowing these six important numbers and continually work on ways to improve them.

Strive to improve each and every one of these numbers by an achievable 5-10 percent and you’ll be amazed at the bottom line improvement in your business. PR


Tim Musch is director of business development MarketSharp Software, LaCrosse, Wis. He can be reached at or 800.335.4254 ext. 203. To learn more, visit the MarketSharp Software website at

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