In the last article of this two-part series, we looked at setting SMART goals and identifying critical success factors (CSFs) for your commercial cleaning business. In this article, we will look at how key performance indicators (KPIs) and other metrics can help track overall team performance.
Using metrics effectively can increase your business awareness, unlock employee potential, and help your janitorial business work and run smarter. However, it is hard to reap the full benefits of metrics without understanding where they come from.
Today, we continue our blog series about how metrics can help increase your customer retention. After setting your company’s SMART goals and identifying your critical success factors, the next step is to establish your company’s key performance indicators, which determine how you will collect and record accurate data as well as how you will later evaluate your goals.
Establish Key Performance Indicators (KPIs)
KPIs are designed to show the overall health of a business at a single glance. Although KPI numbers can stand on their own, they also show the overall success of the business’ combined critical success factors. KPIs can be calculated as either a culmination of the CSFs or as separate metrics.
Examples of KPIs thus include the CSFs associated with customer retention that we listed in the previous article:
- Work order response time
- Inspection scores
- Amount of planned maintenance work vs. unplanned work orders
- Customer survey results
- Customer outreach
Although there may be a strong correlation between the CSFs listed above and customer retention, the CSFs do not show how long a customer has stayed with your company. In this case, we would calculate that KPI metric separately.
To determine the length of a customer’s lifetime, subtract the earliest contract date from today’s date. Next, average all of your customers’ lifetimes together. Then, find out how your average customer lifetime compares with the jan/san industry’s 4 year average.
Collect and Record Accurate Data
After you determine what KPIs to track, you need to figure out how and where to track the data.
As we’ve written before, a comprehensive commercial cleaning software solution can make this a lot easier. But when considering a software solution, make sure the data entry is naturally incorporated into your real-time workflow.
For example, if you promise your customers a specific work order turnaround time, immediate data entry by your employees is imperative. An excessive lag between completing the work and closing the ticket can corrupt your data.
On the surface, a lag may not sound like much of a problem. However, it can create profound ripple effect in areas such as the following:
- Employee Allocation: If you have eight employees taking an extra hour to update their work, that could signal to management that you need an additional person to handle the workload.
- Writing new Customer Contracts: With corrupted data, it would be hard to set competitive work order response times. If you adjust your data on a gut feeling, you could find it difficult to meet that standard. If you promise work order response times that are too slow, the potential customer could choose to go with someone else.
- Customer Promises: If you promise a fast work order response time, an extra hour in your data could make it harder to prove that your company is meeting the conditions of your contract.
The good news is that once a problem is noticed, it can be resolved with training. As you train your employees, explain how their performance affects the company and their potential for bonuses. As your team adjusts, so will your data. After all, data-driven decisions are only as good as the data itself.
Adjust as Necessary
Obviously staring at the numbers all day will not make them change. The key to KPI management is setting your goals and then dividing them into manageable targets by quarter, month and sometimes by week. If your team can’t move the needle on a regular basis, it will be tough to reach your end-of-year goals.
If weekly results turn into a trend, talk to your team about why. Identify what is working and what is not so your team can make improvements. If there are factors outside of your teams’ control, like economic conditions, it is important to discuss these as well. Manage this discussion carefully; it is an exploratory conversation, not a time for excuses.
Based on this conversation, you may need to adjust your goals. SMART goals are designed to stretch, not break, you and your team. After adjusting or resetting your goals, write an action plan to help keep you on track.
Implementing KPIs and other metrics may feel like a big task, especially if they have not been part of your commercial cleaning business before. Remember the old saying, “If you can measure it, you can improve it.” Although this process may not be instantaneous, it may have a great impact on your productivity and client retention, and thus the future of your commercial cleaning business.
If you would like to learn more about this topic, please watch our webinar, “Winning in the Fourth Quarter.” Caden Hutchens, Executive Vice President of CleanTelligent Software, talks about how to make a realistic Q4 action plan based on your actual progress, even if you are running behind in your projections.