How Top Contractors Make Growing Consistently Look Easy
Contractors Who Grow Consistently Know Their Metrics… And They Use The Best CRM To Make It Look Easy
Knowing Your Numbers Is Critical For Home Improvement Businesses
Do you know the biggest difference between the very few home improvement businesses that are dominant in their market versus the many that stay stuck in mediocrity (or even fold)?
Many people guess that the difference is in top-notch sales and marketing. It is true that those are key elements to growing your business, but there is something that underlies success in sales and marketing. The foundation for great sales and marketing comes in knowing your underlying metrics.
The biggest difference between those home improvement businesses steering their own course and those just bobbing along with the current is this: you have to know your numbers. Without a complete grasp of your numbers, you cannot have a firm grasp of the direction of your business and what you need to do to grow it.
It is important to add that knowing your metrics needs to go beyond basic revenue figures, closing rates, and profit margin. (Although, of course, you need to know those, too!). This is about going deeper than the highest level numbers, important as those are.
Business owners that focus on detailed metrics have the tremendous advantage of being able to key in on the specifics that need improvement, while also doubling down on what is already working. Once you know the particulars of what needs to be done, creating an effective strategic plan to get there becomes much more achievable.
So… What Numbers Should You Be Measuring?
One of the most basic things you should know is how much it costs you to acquire each customer.
On the surface, that sounds simple enough, right? Divide your total lead costs by your total number of sales (for whatever time period you designate) and – abracadabra – you know how much it costs to acquire a customer.
While it’s true that it would give you an accurate number, it is also at such a high level that it’s not very actionable information.
What if you could track the costs of acquiring a customer by lead source, and do it easily?
And don’t stop there.
What if, for every lead source, you could track how much it cost per appointment set? And cost per demo? In other words, what if you had an easy way to drill down the cost of every lead source and figure out exactly which ones give you the most bang for your buck?
If you don’t drill down to this level, the temptation becomes to judge leads by which ones generate customers, not necessarily by which ones are the most profitable. Speaking of which, you should also know the average sale price for each lead source. You might be surprised to discover that the lead source you were loving is actually shaving too much off your profit margin.
Let’s go even further.
With the right CRM, you can also break down your metrics by an individual salesperson. This means that knowing your numbers can alert you to who on your team is dropping the price to get the sale too often or too quickly. When you have the data to back it up, that coaching conversation with an underperforming salesperson can become much easier because you have clear data to back it up.
How Do You Get This Kind Of Total Grasp Of Your Numbers?
The simplest way to tackle this issue of knowing your numbers is to have a robust CRM system, built exclusively for home improvement businesses. With top-quality CRM software, you will be able to see any relevant metric you want to measure with just a few keystrokes.
For example, the Builder Prime CRM has a customizable report called the “Customer Acquisition Cost Report.” Using this, you can easily track how much it costs to acquire a customer, broken down in the ways we just detailed above. You can also see how much a lead is costing you each step of the way in your process. It’s all in one simple dashboard that is clear and real-time accurate.
Another good example – also from the Builder Prime CRM – is the “Lead Performance Report.” With this, you can see the total number of leads, number of rehash opportunities, total appointments set, total demos, and total jobs sold, as well as the percentage success rate for appointments, demos, and sales. This is all easily viewable across the top of the dashboard.
Then as you scroll down, you can see all these same metrics, but broken down by lead source. Want to know how your ‘Home Show’ leads perform against all your other lead sources? It’s right there in front of you. Need to decide whether HomeAdvisor leads are killing it or killing you? The Lead Performance Report will give you the answer.
This is also the report that allows you to break down performance by salesperson, by lead setter, and by product type. It’s an incredibly powerful tool for gathering actionable information.
To summarize, here is just a sampling of the detailed metrics you can easily access with a quality contractor CRM for every lead source:
- How many leads are you getting per each lead source?
- How many appointments are set per lead source?
- How many of those appointments come to pass and result in a demo per lead source?
- How many of those demos become a sale per lead source?
- What is the Net Sales Per Lead Issued (NSLI) per lead source?
It is important to note that not every CRM gives you this capability. And even the ones that do sometimes make it difficult to access. That’s why always insisting on a free demo and a free trial before choosing a CRM is so important.
The 3 Most Important Words For Home Improvement Businesses: Metrics, Metrics, And More Metrics
Let’s return to the theme that we started with because it can’t be emphasized enough. The key point of separation between great businesses that grow consistently and the mediocre ones that never seem to break through is this: the winners in any market and economic conditions are the ones that know their numbers.
They then use those metrics to power growth by blowing up what works and improving or eliminating what doesn’t work. You simply cannot be fully in charge of your business without a detailed knowledge of your numbers available in real-time.
What stops many home improvement business owners from knowing their numbers is not having a tool that makes it easy. With an average CRM, it is often cumbersome to get the metrics you need. When you can’t easily access your numbers, you don’t know them. And when you don’t know them, you get stuck working in your business, instead of working on your business (learn more about that here). This is why taking the time to test out different contractor CRMs is so important.
See What It Feels Like To Sit In The Driver’s Seat
You have to start somewhere. Why not with a test drive of the Builder Prime CRM, and with no strings attached? Then you can decide if it makes sense for your business to move to a free trial. The right contractor CRM is the first step in the journey toward becoming a dominant player in your market, so why not see what the driver’s seat feels like?