Industry veteran Mike Rottler shares six key business metrics that help him keep his finger on the pulse of his family's 57-year-old business. They can do the same for you!
As the leader of your organization, you have the responsibility to stay on top of finances, operations, marketing, customer service and everything in between. The performance of each of these areas individually fuels the overall health of your business, so you can’t afford to let any one of them slide.
But just because your business is multifaceted doesn’t mean it has to be complicated. Mike Rottler, president of Rottler Pest & Lawn Solutions in St. Louis, believes that keeping things simple is not only possible but preferable. “We tend to make business more complicated than it needs to be, when what we really need to do is get back to basics, focus on what’s important and not let distractions get in the way. My company has become much more successful since I stopped getting caught up in day-to-day minutiae and instead channel my efforts into monitoring key areas.”
Rottler defines these key areas in this article, sharing insights into how to track their performance and ensure continuous improvement. He credits peers across the industry for contributing to these ideas. “We are fortunate to have so many bright people in our business. Every time I interact with someone, I pick up new ideas,” he says. “I’ve boiled the high points down to a basic set of metrics that I rely on to keep my business strong.”
Before you can wrap your arms around your business performance, you need to know who’s who. Rottler said, “You probably do know it all in your head, but it is truly important to put an organizational chart down on paper — for two reasons: (1) regularly updating and reviewing your org chart helps you keep tabs on how many technicians your managers are supervising, where there might be overlap or where you might need an additional staff member, and (2) sharing the chart with your employees helps them see potential career paths for themselves and lets them know to whom to go with certain questions or issues — otherwise, everyone comes directly to you for everything.”
Rottler defines marketing as “anything that makes the phone ring and gives us an opportunity to sell” — TV and radio spots, social media, truck wrapping, etc. How do you determine where you get the most bang for your marketing buck? Track your leads and calculate the cost per lead.
Say, for example, you run a campaign on TV, radio and social media. When calls come into your office, make sure your representatives ask every caller where he or she learned about your company or the special offer advertised. Record this information and examine the collective results. This data will enable you to determine which vehicles were effective in drawing leads. You can drill down to the ZIP code level in your results to see which communities are most receptive to your marketing as well.
Of course, you can’t judge the effectiveness of marketing on one campaign. Often it’s repetition over time that inspires a prospective customer to pick up the phone. Plotting your results over time can help you see how leads trend through times of heavy advertising versus light or no advertising.
Net Promoter Score Uncovers Trouble Spots
Over the past few years, the Net Promoter Score (NPS) has become a widely used performance measure particularly among Copesan Partners like Rottler Pest & Lawn Solutions. This tool helps PMPs gauge their effectiveness in satisfying customers. This score centers around a pivotal question posed to customers: On a scale of zero to 10, how likely are you to recommend us (or this product/service/brand) to a friend or colleague?
The customer’s answer to this question places him or her into one of three categories: a promoter (9-10 score), who is so satisfied with the company that he or she would recommend it; a passive (7-8 score), who is relatively satisfied but not enthusiastic about the company; or a detractor (0-6 score), who is dissatisfied — possibly dismayed with — the organization. When a detractor emerges, Rottler’s team calls that customer immediately to resolve the issues and restore a positive relationship.
He is confident the NPS keeps his team on target. “Since 2010, we’ve been enlisting a third-party research firm to call and survey our customers each quarter, and we share the results with the technicians so that they know how they’re performing in their territories,” he explains. (In the course of a year, 50 to 60 of each technician’s customers are surveyed.) “They understand that getting rid of pests is just the ante, that the real measure of their performance is how their customers feel about the service they’re delivering. It all goes back to the concept of simple is better: If your customers are happy, then you’re in great shape. If they’re not, then you need to re-examine your customer service and step up your efforts.”
Your call center plays a critical role in new business development and account retention. The most basic rule in the area of customer service is to be appropriately staffed for the volume of calls that come into your office. If a potential customer is put on hold for too long, he or she is likely to hang up and phone your competitor instead. This can become a particularly sticky issue when you enter a period of intensive advertising. If you’re promoting a special offer and your office is flooded with calls, are you equipped to handle all of them?
Tracking dropped calls means installing call-center technology if you don’t have it already, but it’s well worth the investment, says Rottler. “When we first looked at our dropped-call rate, we were extremely disappointed to see 14 percent,” he says. “We did some fast work on our staffing and efficiencies, though, and got this number down to 1½ percent fairly quickly [2 percent or below is Rottler’s goal]. Once we got that rate down, our leads jumped.”
Also vital to your success is ensuring that your customer service representatives understand how to convert a lead to a sale. Copesan University training, one-on-one training with the technical director and field ride-alongs prepare the Rottler CSR team for duty. They know that their performance will be measured in terms of how many calls they answer, how many they drop and how many they convert to sales. Each year they are charged with improving these scores over their past year’s performance.
The sales side of the business can incorporate a variety of players — inspectors, technicians and managers, in addition to CSRs on the phone. The bottom line to measuring your effectiveness in this area is setting aggressive sales goals and diligently tracking your progress toward them.
In Rottler’s world, full-time inspectors carry the lion’s share of the sales load. They work toward monthly sales goals and strive to bring in more recurring revenue than one-time accounts. Recurring revenue, says Rottler, is what has enabled Rottler Pest to grow faster than its competitors. The sales team’s performance is measured in terms of the revenue they generate and how that amount compares to their monthly goal, their closing ratio and the type of sale. Like CSRs, new goals are set based on immediate past performance so that the bar is continually set higher, challenging the team to exceed sales expectations.
Keeping close tabs on the all-important service area ensures that your customers are satisfied with the work your technicians are doing for them. First look at the number of stops each technician is completing. If this number is too low, then revenues are being sacrificed. If it’s too high, then quality is being sacrificed. Watching revenue numbers can be indicative of whether your technicians are achieving the right balance, too, but stops per month is the most accurate guide, advises Rottler.
Skips, cancels and callbacks are important, too. If one of your technicians has an inordinate number of skips, then he or she is not clearly communicating the importance of the service. Cancels are a red flag of dissatisfaction; if this number is higher than your comfort level, try to identify and correct the underlying issues. As for callbacks: If you’re seeing a lot of these, it’s probably time to have your technicians brush up on your company’s treatment protocols with some additional training.
Are your technicians asking for the money? You’ll know they’re not when your receivables become inconsistent. Track them every month as a percentage of revenue, identify the territories that are lagging and have a discussion with those technicians about the importance of completing the service call by collecting. “Sometimes technicians develop bad habits; not asking for the money is one that’s particularly important for you to watch for,” says Rottler.
Rottler also asserts that receivables past 30 days are likely to have service issues attached to them. “Accounts that are 30 or 60 days behind in payment signal something’s wrong,” he says. “Have your accounts receivable representative call these customers and ask, ‘Were you happy with the service?’ If the answer is yes, follow up with, ‘We notice your account is overdue. May we collect payment today?’ If the answer is no, your rep can find out what the issue is and move toward resolving it.”
Other financial measures fall into the area of general accounting. Rottler gauges the financial health of his company by using trailing 12-month snapshots for everything from material and equipment costs to net income, net profit and revenue per full-time equivalent (FTE).
“We share our numbers with our employees so that everyone has a transparent view of how the company is performing,” he says. “They understand that the more efficient we are in containing costs, the more profits we have to spread around. So where you might have gotten pressure from employees saying, ‘Hey, we need another hire to help us out with the workload,’ now you have employees who are willing to work harder so they can keep more of the profits they help us earn.”
The author is a frequent contributor to PCT magazine. She can be reached at firstname.lastname@example.org.