Using Critical Metrics to Maximize Your Business

Training

» What- What are the most important metrics to be watching? And how frequently?

» Why? Running your business blind is a bad idea!» How? Where can this information be obtained?

» We live in an information driven society.» Knowledge Economy- Billion $ Economy» Companies like Google, Intel, & Ericsson value their

data as much as service/product they provide.» AT&T

» Data is Valuable For These Reasons˃ Data Aggregation˃ Risk Management˃ Digital Experience˃ Operational Agility˃ Cross Selling

Christmas Decor’s Key Indicators (Metrics)» Marketing ROI» Retention Rates» Sales Closing Percentage» Average Sale» Gross Profit» Average Daily Production

What

Christmas Decor’s Key Indicators (Metrics)» Marketing ROI

˃ Measures how effective your marketing campaigns are+ Individually+ Collectively

˃ Provides intel for future campaigns+ Content+ Timing+ Targets

» System Avg is $10:$1

What

» Retention Rates˃ Identifies rate of returning business- LIFEBLOOD of Christmas Decor

+ Year Over Year+ Can be measured by count+ Or by dollars

˃ Provides info for budgeting˃ System Average is 73%

What

» Sales Closing Rate˃ Measures how efficient your sales efforts are

+ Are you missing too many opportunities+ Gauge of sales cycle+ Identifies top/low performers+ Allows for adjustments

– Marketing Target– Presentation– Pricing

+ System Average is 52%

What

» Average Sale Amount ˃ Average of all sales to date

+ Useful for budgeting going forward+ Useful in conjunction with sales closing rate

– Hi Closing + Low Avg Sale= Poor Outcomes+ Creates Standards

˃ System Average= $1389

What

» Gross Profit˃ Revenue less materials and labor (our standard definition)

+ Adjust ratio of these 2 components˃ Foundation for profitability˃ 55%

What

» Average Daily Production˃ Revenue installed per day per crew˃ Indicator of productivity˃ Directly correlates to profitability˃ Improves use of limited operation time˃ System Average= $2339 (blended average)

What

» Lessens decision cycle» Increases revenue» Lowers operating costs» The bottom line IS the bottom line- Leads to

profitability

Why

» Marketing ROI˃ As a ratio: Total Revenue/ Total Cost

+ EX: $10,000 Sales/ $1,000 Marketing Cost= 10:1 ratio˃ Must track every campaign/tool and service˃ Track Lead Origination & Record

+ Train Staff to ask+ Use campaign identifiers

How

» Marketing Campaign Report˃ Quantifies campaign results for you˃ Exportable for further analysis˃ Requires front end work, but yields HUGE back end results˃ Must preserve data integrity for quality results

How

» Retention Rates˃ (Current Year Sales/ Previous Year Sales)x100= Retention Rate

+ Customer Count+ Dollars+ Or BOTH

˃ Requires accurate records of years being measured

How

» Retention Rates˃ LightRight’s Customer Retention Report

How

» Sales Closing Rate˃ (Accepted Orders/ Proposed Orders)x 100˃ Requires thorough record of interactions

+ May require office to handle sales call scheduling+ ALL interactions need to be recorded- even the unqualified

How

» Sales Closing Rate˃ Sales Closing Report˃ Tracks sales staff progress˃ Only useable if all interactions are recorded˃ System generates accurately as long as all orders in input

How

» Average Order Amount˃ Total revenue / number of orders˃ Requires meticulous record keeping

How

» Gross Profit˃ Total Revenue – materials-labor= gross profit

+ Overall GP+ By job

˃ Requires detailed record of materials used, including IAC˃ Detailed Record of labor- hours worked & rates paid

How

» Job Costing Report˃ Generates per job gross profit

+ Includes all materials+ Includes all labor, including take down

˃ Investment in tracking crucial info offers significant payoff!

How

» Average Daily Production˃ Likely the most mis-understood metric in our system˃ Total Revenue/ total # of crew days= ADP

+ Total Crew Days= aggregate total of days worked per crew˃ Requires close tracking of crew activity, inside and outside of Christmas

Decor business

How

» Productivity Report˃ Only tracks days crew worked

How

» Use systems designed to track data/yield reporting» Only complete and accurate input will yield

accurate reports» Use data for operational agility and develop deeper

business» Identify indicators that are important to your

business

Best Practices