Unlocking Success: 7 Key Cleaning Service KPIs for Growth

Welcome to our latest blog post, where we dive deep into the most important metrics to track when measuring the success of your cleaning service business. As a serial entrepreneur who has launched several successful businesses, I understand the importance of tracking KPIs for growth and profitability. Here, we'll explore the top seven cleaning service KPIs that are essential for driving positive results.

• Customer satisfaction rate: This is one of the most important KPIs to track, as happy customers are likely to become repeat customers and refer others to your business.
• Number of referrals from existing customers: This metric can give insight into how effective your customer service is and how loyal your customer base is.
• Percentage of services completed on schedule: Timeliness is crucial for customer satisfaction, and tracking this KPI can help you identify areas for improvement in your scheduling and operations.

As the cleaning service industry continues to grow, it's essential to stay ahead of the competition and ensure that your business is on the right track for success. By tracking these essential KPIs, you can make data-driven decisions that will guide you to profitability and long-term growth. Scroll down to learn more about each of these critical KPIs and how to track and calculate them in your business.

Customer satisfaction rate

As a cleaning service business owner, it is crucial to keep your customers happy. By tracking your customer satisfaction rate, you can measure how well you are meeting their needs.

Definition

The customer satisfaction rate is a KPI that measures how satisfied your customers are with your cleaning services.

Use Case

You can use customer satisfaction rate to:

• Improve your cleaning services by identifying areas that need improvement
• Determine how loyal your customers are
• Track the effectiveness of customer service initiatives

How To Calculate KPI

The formula for calculating customer satisfaction rate is:

Calculation Example

Let's say you surveyed 100 customers and 80 of them reported being satisfied with your cleaning services. To calculate your customer satisfaction rate, you would use the following formula:

KPI Advantages

• Identifies areas for improvement
• Increases customer loyalty
• Enhances customer retention

KPI Disadvantages

• Dependent on survey accuracy
• Can be affected by outlier responses
• Only reflects customer opinions and not actual service quality

KPI Industry Benchmarks

The industry benchmark for customer satisfaction rate in the cleaning services industry is 80% to 90%.

Number of Repeat Customers

Definition:

Number of repeat customers is a key performance indicator that measures the percentage of customers who use services or products from a cleaning company more than once. In brief, how many regular customers a cleaning company has.

Use Case:

The repeat customer rate reflects customer satisfaction with the cleaning service, overall quality, and trust level of the business. This metric provides cleaning companies with an idea of how successful they are in retaining their existing customers and if they are providing high-quality service that encourages them to come back.

How to Calculate KPI:

To calculate the number of repeat customers, divide the number of customers who have used the cleaning service more than once by the total number of customers and, eventually, multiply the result by 100.

Calculation Example:

Suppose a cleaning company has 200 customers, and 70 of them have used the service more than once. The repeat customer rate for this company is:

KPI Advantages:

• Repeat customer rate provides insights into the quality and reliability of the cleaning company's services over time.
• Repeat customers are an excellent source of revenue and should be encouraged for a business's growth.
• Incentivizing repeat customers helps in creating long-term relationships with clients.

KPI Disadvantages:

• In case a company has low repeat customers, it can mean various things, such as poor quality of service, ineffective marketing outreach, or broken communication cycles.
• KPI doesn't consider the difference between inactive and loyal customers, which would be ideal to monitor service levels accurately.

KPI Industry Benchmarks:

• The average repeat customer rate for cleaning companies worldwide is 35%.
• The top cleaning companies scored between 50-70% in repeat customer rates.

Average revenue per customer

Definition

The Average revenue per customer KPI is used to measure the average amount of revenue generated by each individual customer over a specific period of time. This KPI provides insights into how much revenue is obtained from each customer.

Use Case

This KPI is particularly useful in understanding customer behavior, identifying customer segments with high potential, and finding ways to improve revenue by optimizing pricing and promotional strategies.

How To Calculate KPI

Calculation Example

KPI Advantages

• Helps to identify high-value customers.
• Provides insights into customer preferences and behavior.
• Optimizes pricing strategies for different customer segments.

KPI Disadvantages

• May not provide an accurate view of revenue per customer, as some customers may purchase more frequently or at higher price points.
• Does not take into consideration the cost of acquiring or serving customers.
• May not be applicable for businesses with a high volume of low-cost transactions.

KPI Industry Benchmarks

• The average revenue per customer for the cleaning service industry is $120.
• Top-performing cleaning service companies have an average revenue per customer of $150 or more.

Number of Referrals from Existing Customers

Definition

The number of referrals from existing customers is a KPI that measures the effectiveness of your cleaning service in generating new customers through word-of-mouth marketing. It represents the number of new customers referred to your business by existing customers over a specific period of time.

Use Case

The number of referrals from existing customers is an important KPI that helps you assess the satisfaction level of your customers. Satisfied customers are more likely to recommend your cleaning service to others, resulting in a higher number of referrals and ultimately more business for you. This KPI can also help you identify potential customer segments that generate the most referrals.

How to Calculate KPI

To calculate the number of referrals from existing customers, use the following formula:

Calculation Example

Suppose you have 100 existing customers, and 25 of them referred your cleaning service to their friends or family members. Using the formula, your number of referrals from existing customers KPI would be:

Resulting in a KPI score of 25%.

KPI Advantages

• Helps you assess the satisfaction level of your customers
• Identifies potential customer segments that generate the most referrals
• Indicates the effectiveness of word-of-mouth marketing for your cleaning service

KPI Disadvantages

• May not yield an accurate KPI score if customers are not actively referring your service to others
• Does not account for other marketing channels that may be generating new customers for your business

KPI Industry Benchmarks for the KPI: 'Number of referrals from existing customers'

As per our research on the cleaning service industry, the average number of referrals from existing customers is between 15-30%. However, the score may vary depending on the business model, customer segments, and marketing strategies employed by the cleaning service provider.

Percentage of services completed on schedule

Definition

The percentage of services completed on schedule refers to the proportion of cleaning services that are completed within the expected time frame.

Use Case

This KPI is useful for monitoring the efficiency of cleaning services, as well as providing insight into customer satisfaction levels. If the percentage of services completed on schedule is high, it can indicate that the cleaning services are well-organized and that customers are receiving satisfactory services.

How To Calculate KPI

To calculate the percentage of services completed on schedule, divide the number of cleaning services completed on schedule by the total number of cleaning services provided, and multiply the result by 100 to obtain a percentage.

Calculation Example

Let's say that a cleaning company completes 200 services in a given month, and 160 of these services are completed on schedule. The percentage of services completed on schedule would be:

KPI Advantages

• Provides insight into the efficiency of the cleaning services.
• Can indicate high levels of customer satisfaction.
• Helps to identify any potential scheduling issues and improve service delivery.

KPI Disadvantages

• May not account for changes in customer schedules or unforeseen circumstances that can cause delays.
• Some customers may prioritize quality over timeliness.
• The KPI may be affected by external factors, such as traffic or weather.

KPI Industry Benchmarks

According to the Cleaning Industry Management Standard (CIMS), the average percentage of cleaning services completed on schedule for professional cleaning companies is around 85%.

Employee retention rate

Definition

Employee retention rate refers to the percentage of employees who remain with a company over a specified period. It is an essential KPI that measures the level of engagement and job satisfaction employees have with their employer.

Use Case

As a pro-serial entrepreneur, I have founded and run numerous businesses. One of the key lessons I have learnt over the years is that high employee turnover can be a significant cost to a company. The cost can be direct, such as severance packages and recruitment expenses. Also, indirect costs such as lost productivity and disrupted operations can be detrimental. Measuring employee retention rates can help identify problem areas in a company so that corrective action can be taken.

How To Calculate KPI

To calculate the employee retention rate, divide the number of employees who remain with the company by the total number of employees during the specified period. Then multiply the result by 100 to get a percentage. Below is the formula:

Calculation Example

Suppose a company had 100 employees at the beginning of the year and 10 of them left the company. At the end of the year, the company had 90 employees.

To calculate the employee retention rate, we use the formula:

This means that the employee retention rate for the year is 90%.

KPI Advantages

• Measure of Employee Satisfaction: Employee retention rate measures the satisfaction of employees within the organization.
• Money-Saving: High employee retention rates can save a company money in terms of recruitment and training expenses.
• Indicates Company Performance: Retaining employees can be an indication of a company's performance, culture and benefits package.

KPI Disadvantages

• May not be Accurate: The employee retention rate may not be a precise measure of employee satisfaction as employees may remain with a company for various reasons, such as inertia or limited opportunities elsewhere.
• Industry Changes: Industry changes are not factored in when using this metric.
• Job Market: The rate of staff turnover can be subject to fluctuations in a tight job market or localized factors such as the local economy.

KPI Industry Benchmarks

Industry benchmarks for employee retention rate vary greatly across different industries and countries. As an example, a report from LinkedIn indicates that the global average employee retention rate is around 72%.

Cost of goods sold as a percentage of revenue

As a serial entrepreneur, one of the KPI metrics I track regularly for my cleaning services business is the cost of goods sold as a percentage of revenue. This KPI metric is vital because it helps me understand the efficiency of my business operations and the cost-effectiveness of my business model.

Definition

The cost of goods sold (COGS) as a percentage of revenue is a KPI metric that measures the percentage of revenue that is used to cover the costs associated with producing the products or services offered by a business.

Use Case

This KPI metric is useful for measuring the efficiency of your business operations. A high percentage indicates that your business is spending too much money on producing the products or services offered, which can negatively impact profits. A low percentage, on the other hand, indicates that your business is operating efficiently, and there may be opportunities to increase profits by expanding operations.

How To Calculate KPI

To calculate COGS as a percentage of revenue, you need to divide the cost of goods sold by the revenue and multiply by 100. The formula is:

Calculation Example

Suppose your cleaning services company generated $100,000 in revenue, and the cost of goods sold was $50,000. The calculation of COGS as a percentage of revenue would be:

KPI Advantages

• The KPI metric is easy to understand, calculate and track over time.
• It aids in measuring business efficiency and profitability, enabling prompt business decisions.
• It identifies areas of improvement for business processes and operations to optimize profit margins.

KPI Disadvantages

• The use of averages may hide fluctuations in pricing or production costs.
• International variation in accounting principles can affect the KPI's comparability.
• Incremental and sunk costs in the short-run may lead to initiatives and investments that may drive up COGS.

KPI Industry Benchmarks for the KPI: 'Cost of goods sold as a percentage of revenue'

Benchmarks for COGS as a percentage of revenue vary widely based on various factors such as business size and industry. However, the average range is between 50% to 75% for the cleaning services industry.