Harnessing Business Metrics for Better Decisions
We had the pleasure of hosting Kevin LeSage and Jon Torrey from SearchLight, a revenue analytics platform for the home services industry, where Kevin is the CEO, and Jon is the director of marketing & strategic partnerships. We delved deep into the pivotal role of business metrics and how leveraging this information can vastly improve business decisions in the HVAC industry.
Understanding Business Performance
Understanding business performance is more than just looking at revenue numbers or assessing quarterly growth. It delves into the intricacies of what makes a business flourish or flounder. When Kevin mentions, “We want to understand what works, what doesn’t work and then invest in that success,” he is pinpointing the necessity of diving deep into the roots of business performance.
This involves evaluating the strategies that have yielded positive results and identifying the ones that have fallen short. It’s an iterative process of experimentation, reflection, and action. By doing so, a business can harness what’s truly beneficial and mitigate or eliminate strategies or practices that hinder growth.
Furthermore, it’s essential to remember that businesses don’t operate in a vacuum. External influences can heavily sway the fate of a company, sometimes more than internal decisions and strategies. This is where Kevin’s insight, “Consider the seasonality, technology changes and macroeconomics of your business while analyzing market performance,” becomes pivotal.
A business can cultivate a more holistic and proactive approach by evaluating internal operations and these external factors. As Kevin suggests, delving into these facets provides a clearer lens through which one can analyze market performance, thereby paving the way for informed decisions and strategic investments.
KPIs: Overlooked yet Crucial
Businesses track many metrics in the home service sector, ranging from installation success rates to customer satisfaction scores. However, as Jon Torrey highlighted, advertising and its effectiveness often go unnoticed: “Return on ads potential is one of the most overlooked KPIs in this space.”
Return on ad potential is a crucial metric that evaluates the efficiency and success of advertising campaigns. It’s not just about the mere amount of exposure or clicks an advertisement gains; it’s about understanding the tangible and intangible values derived from that advertising spend.
Jon’s subsequent probing questions, “What is the demand in my market? Are the economics good for what I’m spending?” beckon businesses to be deeply introspective and to assess their advertising strategies critically. These queries suggest that businesses shouldn’t just run ads haphazardly but should deeply understand their target market, its demand curve, and the returns they expect from their ad spend.
We urge businesses to trace back and see how many people viewed or clicked on an ad and how many genuine opportunities—sales, leads, or other valuable actions—originated from that investment. This perspective changes the ad spending game from a mere numbers play to a strategic financial decision.
Jon Torrey’s insights serve as a clarion call for home service businesses, and arguably any other sector, to be more judicious and analytical about their advertising spend. It’s a reminder that every dollar spent should be seen as a cost and an investment with a measurable and desirable return.
Don’t Leave Dollars In The Unsold Bin
In the ever-churning world of business, the allure of new leads often takes center stage. New leads symbolize potential, growth, and the promise of expanding horizons. However, Jon brings an insightful perspective to the table with his observation: “There’s always a new lead to chase, but that unsold estimate revenue continues to grow and grow.”
This statement unravels an essential facet of business that many tend to neglect: the value of revisiting unsold estimates. These are not merely missed opportunities but represent dormant potential that could be actualized with the right approach and follow-up.
When a company provides an estimate that isn’t immediately acted upon, it doesn’t necessarily mean the door has been permanently closed. There could be many reasons the deal wasn’t sealed initially, ranging from timing, financial considerations, or even external market conditions. Instead of viewing these unsold estimates as losses, businesses could see them as a backlog of potential sales waiting for a nudge or a revisited pitch.
Jon’s sentiment is a powerful reminder of the importance of nurturing all avenues of revenue, not just the shiny new ones that come knocking. It prompts businesses to revisit past engagements and consider strategies to revive interest. This could involve better communication, offering seasonal discounts, or simply touching base to understand prospective client reservations.
Learn More With Kevin and Jon
Our recent podcast episode with Kevin LeSage and Jon Torrey was a treasure trove of insights for HVAC businesses. Companies can ensure their longevity, profitability, and continued success in an ever-evolving industry by understanding, tracking, and acting on these crucial metrics and KPIs. You can visit our YouTube channel or your favorite podcast station to listen to the full episode.
Until Next Time,
Evan and Thaddeus