Table of contents:
Introduction
Whether you specialize in plumbing, HVAC, electrical work, carpentry, or any combination of these, marketing is just as important in the home service world as in any other business sector. Marketing your company's services effectively allows you to…
- Obtain new customers...
- More efficiently leverage your current customer base...
- Generate more revenue...
- ...and scale up your business successfully.
Tracking the following marketing-focused KPIs, or key performance indicators, will prove tremendously helpful in your marketing efforts. Because (most) of these KPIs are numbers-based, you can use them to make effective, data-based decisions to chart the best course for your company and drive revenue growth.
Using these KPIs, you’ll be able to tell how effectively your business is making use of its promotional resources, and where they could be better utilized to help achieve your goals. Let’s take a look at them!
1. Inbound Leads
What is this KPI?
Inbound Leads are the number of leads you obtain from potential customers who reach out to you by providing you their contact information. Inbound Leads can reach you via phone, online signup form, or social media.
How to use Inbound Leads
Inbound Leads are the first step in converting leads to customers. Nurturing these leads, or guiding them along the customer journey, is particularly crucial at this early stage of first contact. You can nurture your Inbound Leads by:
- Responding promptly to inquiries
- Scheduling service appointments
- Negotiating reasonable quotes for services provided.
Why Inbound Leads are important
Inbound Leads are actually more likely to convert to customers than their counterpart, Outbound Leads. For this reason, obtaining high-quality Inbound Leads can help your company build major credibility points among your customer base. Having this credibility will help attract further high-quality Inbound Leads, creating a positive feedback loop to drive growth.
2. Cost per Lead
What is Cost per Lead, and how do I find it?
The Cost per Lead, or CPL, is the average amount of money it takes to obtain a single new lead. To find your CPL, divide your total amount of marketing expenses by the number of new leads you’ve obtained in a given time period.
How to use CPL
CPL is a really useful metric because it has a lot of applications. For one, it can assess the effectiveness of your different marketing channels. For another, CPL is great for budgeting and planning, as this KPI makes it easy to see where your money is being well-spent and where it isn’t.
For example, perhaps your CPL is fairly low for your website, but quite high for social media. With this knowledge, you can see which channel is worth investing more time and money in.
Why CPL is important
CPL’s importance lies in the fact that it’s a ROI (return on investment) measure. Whether you use Cost per Lead to help plan your budget, to help analyze your marketing efforts, or both, this KPI enables you to easily evaluate your marketing efforts on the basis of cost effectiveness.
3. Lead-to-Job Conversion Rate
What is Lead-to-Job Conversion Rate, and how do I find it?
Lead-to-Job Conversion Rate is the total percentage of your leads, whether inbound or outbound, that turn into jobs for your technicians. To find this KPI, divide the number of leads you’ve obtained in a given time period by the number of jobs you’ve completed in the same period. Multiply by 100 to obtain a percentage.
How to use Lead to Job Conversion Rate
Simply put, the Lead-to-Job Conversion Rate is ideal for seeing how well your marketing efforts are transforming leads into customers. Tracking your own Lead-to-Job Conversion Rate against industry standards will allow you to course correct your marketing efforts if your conversion rate falls too low.
Why this KPI is important
Because Lead-to-Job Conversion Rate tracks how effective you are at transforming your leads to customers, it’s a good indicator of your potential for revenue growth and profitability. Awareness of this KPI will also let you allocate the appropriate funding to tried-and-true marketing efforts that the data indicate are cost-effective.
4. Average Revenue per Job
What is Average Revenue per Job, and how do I find it?
Average Revenue per Job is exactly what it sounds like–the average amount of money you earn from each job completed. Find this KPI by taking the total amount of revenue you’ve generated in a time period, and divide it by the number of jobs you've done in the same period.
How to use this KPI
Average Revenue per Job is a fantastic tool for financial planning. If you know the amount of revenue a “typical” job generates, you can use this number as a baseline to project future earnings and create a budget.
Why Average Revenue per Job is important
Having a good knowledge of this KPI allows you to monitor those sectors of your business that are the most profitable. With this established, you’ll be able to devote sufficient time and personnel to these services, and boost your marketing efforts to promote them.
5. Marketing ROI
What is Marketing ROI, and how do I find it?
Marketing ROI (Return on Investment) measures the profit you obtain for every dollar you spend on marketing. Find Marketing ROI by dividing your marketing expenditures from a given period by the amount of profit generated in the same period.
How to use Marketing ROI
Basically, Marketing ROI measures how much “bang for buck” you’re getting with your marketing efforts. Using this metric, you can see which of your campaigns and strategies are the most efficient at delivering revenue for the lowest cost. With this knowledge, you’ll be able to make sufficient room in your budget to focus on these efforts.
Why Marketing ROI is important
In a word, profitability. Marketing ROI is a crucial KPI for any company to see how much their marketing investments are paying off—and by extension, how much profit they’re generating from customers. If you want to focus on the outreach strategies that work while cutting wasteful spending, Marketing ROI is an essential metric to monitor.
6. Customer Lifetime Value (CLV)
What is CLV, and how do I find it?
Customer Lifetime Value, or CLV for short, is an essential metric for tracking how much revenue a single customer is expected to generate for your business over their customer “lifetime.” The stages of the customer lifetime are as follows:
- Awareness. The lead becomes aware of your brand.
- Consideration. The lead asks if your offerings meet their needs.
- Decision. The lead decides to buy your product or service based on various factors.
- Purchase. The lead becomes a customer, and buys your product or service.
- Post-purchase. The customer’s experience after purchase, such as with your CS team.
- Loyalty. A one-time customer repeats their purchase, and builds a relationship with your company.
- Advocacy. The customer recommends your brand to others.
Find your CLV by multiplying your customer value by your average customer lifespan.
- Your average customer lifespan is the average length of time a customer continues to buy from your company.
- Meanwhile, your customer value is the average value of customer purchases multiplied by the average number of customer purchases in a given period.
How to use CLV
Customer Lifetime Value is an incredibly valuable tool because it’s a good indicator of several different things. Knowing your CLV, you can determine how much to spend to acquire new customers—spending less than your CLV to get a new customer will generate profit.
CLV also allows you to keep an eye on your most valuable customers. CLV makes it easy for you to retain them via special marketing efforts, loyalty programs, and premium service offers.
Why CLV is important
Customer Lifetime Value’s biggest benefit is that it encourages business to think in the long term. Companies that pay attention to CLV are focused on sustainable growth, rather than chasing short-term rewards. Besides creating a baseline criteria by which to evaluate their customer base, CLV is also a good way for companies to identify their most prominent—and profitable—customers.
7. Repeat Business Rate (RBR)
What is the Repeat Business Rate, and how do I find it?
The Repeat Business Rate shows how reliably your company is viewed by your customers. It’s the number of times your customers have repeated patronizing your business in a given time period. Find your RBR by dividing your number of returning customers by your total number of customers in a period, and multiplying by 100.
How to use Repeat Business Rate
Repeat Business Rate is all about identifying loyalty. Customers with a high degree of satisfaction in your company will be more likely to repeat purchasers. If your Repeat Business Rate gets too low, you’ll know to make necessary changes to your customer retention strategy.
Why this KPI is important
Repeat Business Rate is an important KPI because it’s focused on customer satisfaction and retention. A strong Repeat Business Rate means you’ll actually reduce your efforts to obtain new customers, freeing up revenue and resources to be used elsewhere.
8. Local Search Rankings
What are Local Search Rankings?
Your Local Search Ranking is the position your company website appears on a search engine results page (such as Google) when users search for services in your area.
For example, you own ABC Plumbing, one of the largest plumbing service providers in the Ottawa area. Local residents who search for “plumbers” on Google see your company listed as first place on the results page—your Local Search Ranking in action.
How to use your Local Search Ranking
Local Search Ranking is a tremendously important tool with a lot of uses and applications. Use it to optimize your Google Business profile: ensure your company information is up-to-date and appears accurately online. You can also use your Local Search Ranking to gather reviews, helping build credibility and trust with both your customers and potential leads.
Why your Local Search Ranking is important
When searchers see your information at the top of a Google search results page, they’re all the more likely to click on your link—and become paying customers! Don’t rely on word of mouth alone to communicate your company’s success. Having a strong Local Search Ranking will give you a decisive competitive advantage online.
9. Website Conversion Rate
What is the Website Conversion Rate, and how do I find it?
A Website Conversion Rate measures the percentage of visitors to your website who take a desired action. These actions can include filling out a contact form, making a phone call, or booking a service job. Find your relevant Website Conversion Rate by dividing the number of service job bookings (for example) by the number of visitors to your website.
How to use Website Conversion Rate
As with many of these KPIs, Website Conversion Rate can be used to determine how engaging and effective your website is. If visitors aren’t filling out forms, booking service jobs, etc. on your website, you’ll know that it will require some tweaking to make it more visitor-friendly, optimal for attracting the attention you need.
Why this KPI is important
Website Conversion Rate is a highly cost-effective means to bring about more sales and revenue. By making a few adjustments to your webpage layouts and SEO, you can attract significantly more visitors and grow your customer base.
10. Seasonal Lead Trends
What are Seasonal Lead Trends?
Finally, Seasonal Lead Trends are the regular patterns of business that your company gets in different seasons. HVAC technicians will be more active in the summer months installing and maintaining AC units. Plumbers have a good chance of being highly active in winter if it’s cold enough for pipes to freeze; and electricians are likely to receive a lot of calls during the Christmas holidays, when households often have large light displays.
How to use Seasonal Lead Trends
Knowing Seasonal Lead Trends are invaluable for planning purposes. If you know what kind of demand to anticipate in, for example, the HVAC summer season, you can prep your technicians with the resources they need so they can effectively meet the upcoming demand.
You can also tailor your marketing campaigns to align with the different seasons of demand. In the runup to Christmas, for example, you can publicize your team’s electrical expertise on your website, social media channels, mailed flyers, etc.
Why Seasonal Lead Trends are important
Knowledge of Seasonal Lead Trends allows you to anticipate demand across the quarters of the year, and budget for these shifts accordingly.
Additionally, knowing Seasonal Lead Trends allows you to stay competitive with other companies and responsive to customers’ needs. While it’s not a numbers-based metric, knowledge of Seasonal Lead Trends is essential to staying attuned to the regular yearly shifts in the market.
The Plecto difference
This is where Plecto comes in: an all-in-one data solution that allows your home service business to track all of these KPIs (and more) on dynamic and real-time dashboards that will bring your data to life and motivate your team.
As we said at the start, keeping track of these metrics will empower you to make data-based decisions that will expand your marketing reach, accelerate your revenue growth, and allow you to reach your big goals all the faster!
More and more home service businesses are turning to Plecto to fill their data collection needs. You can read about some of them here:
Game-Changing Culture Drives 20% Increase in Calls and Jobs at Electrika | Plecto
Plecto Saves Canadian Home Service Firm Hundreds of Hours
Real-Time Plecto Dashboards Drive 100% Higher Engagement at Arnold & Sons
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JAMES NIILER
Content Specialist
An in-house content writer and specialist at Plecto, James brings an academic touch and journalistic flair to his marketing copy. Having worked and studied on both sides of the Atlantic, James is a great believer in the importance of communicating across cultures and industries. Catch his work here on the Plecto blog, or as a guest contributor on other B2B websites.
