4 Key Performance Indicators to Measure at Your Service Business

In my January-February Snow Business column  I shared four Key Performance Indicators that snow and ice management companies should review to gauge how the season went. I thought I would bring them up again not only for our snow and ice management readers, but also for landscapers, pavement maintenance contractors, and our readers from other industries that these KPI’s are applicable for.

Spring services are definitely upon us, so the sooner you start thinking about these KPI’s the easier they’ll be to implement, measure and review when the season is over.

KPI One: Job Costs

Measure job costs, customer satisfaction and employee satisfaction to help you plan for the upcoming season.

How is your current book of business performing? The snow removal season is finally over (except in Colorado I suppose!) so you should know by now how your job costs totaled up, but for landscape, pavement maintenance and other service providers, be sure you’re keeping a close eye on your them as the season progresses- and adjust accordingly if needed:

• Take a look at your direct costs, which have to do with the work you and your staff accomplish. How much gross margin do you see? Are you happy with the results?
• If applicable, look at your subcontractor costs. As a percentage of your revenue, what are your subcontractor costs? Is this what you budgeted? Is it higher or lower than past years? Is the number of subs you’re using larger, smaller or about the same as previous years? Are you using the number of subs you wanted to and planned for?

Answering these questions will help you understand where you are now, and help you make informed decisions when you set out to win new work and renew existing work.

Once you’ve analyzed these two large areas, you should have a good overall idea about how the business is performing financially. Whether you’re happy with the results or disappointed, you need to know why. Your indirect and direct costs make up your cost structure, so if you’re not pleased, drill down further until you discover where the trouble lies.

KPI Two: Customer Satisfaction

What kind of feedback are your customers giving you? What’s going on with the clients you’ve serviced so far? Check in with your managers and your customers. Are your clients happy, mad or quiet? How long did it take for them to receive invoices for services? Did they contest any charges?

Something that worked well for my company was to include a recap of the weather events and how we managed them with their snow and ice invoices. It helped our customers interpret the charges and reduced a lot of calls. Plus, it educated the property managers we worked with and helped us work with them to determine the right amount of service, especially as budgets got tight toward season’s end.

You can also provide before and after pictures for pavement maintenance projects, or landscape installation projects to reinforce the work you’ve done. After all, the person signing your check may never step foot on the property to see the results.

KPI Three: Employee Satisfaction

How are your employees doing with the demanding season? Never overlook the disruptive nature that a long snow season has on your team- or a busy spring season mowing lawns or sealcoating parking lots. It’s not an 8-5 task to deliver timely service, and your staff makes the difference during these hectic events and throughout the long season.

I always tried to show my appreciation to my staff during the snow season (and beyond), and a large part of that involved listening to their experiences and opinions about how operations were running. Find out what the toughest part of delivering the services is for them. Listen carefully, and then try to give them the tools they need to make delivering services easier and less burdensome for them. I discovered over the years that making things easier for our staff was generally pretty simple and worth the expense if added labor or equipment was desired.

Your staff is the link to your company’s performance, and it’s important to make sure they’re happy. Share the wealth when the business is doing well. Make sure everyone is fairly compensated for their time and contribution to the delivery of services. It doesn’t take much to be fair and show your appreciation for their efforts and the long hours they’ve put in to help the company accomplish the job.

KPI Four: Planning For Your Future

Chris, Mike and Alle at SIMA 2013

Are you attending the SIMA Symposium in June? With a better winter than we’ve seen in some years, you have a great reason and no excuse not to attend the SIMA Symposium in Columbus, OH, June 18-21. Take your key managers and look for the edge to grow and improve your business for the 2014-2015 season.

The Green Industry Expo & GIC conference October 22-24 is another event you shouldn’t miss. We’ll be exhibiting at both shows and hope to see you there.

Industry conferences provide the best return on your time. It’s all there: networking, education, manufacturers and suppliers all in one spot for three or four days of value. I’ve attended these conferences my entire career and always walk away with tremendous value.

This article includes excerpts from my January-February Snow Business column.