7 Key Property Preservation KPIs for Business Success

Are you looking for a way to maximize the success of your property preservation business? Look no further than tracking your Key Performance Indicators (KPIs). These metrics provide essential insight into the health of your business and help you make data-driven decisions. In this article, we'll explore the top seven property preservation KPIs and show you how to track and calculate them to achieve optimal results.

• Customer Satisfaction: One of the most crucial KPIs for any business is customer satisfaction. With a satisfied customer base, you'll be more likely to see repeat business and referrals.
• Repeat Clients: Keeping existing clients coming back is much more cost-effective than always chasing new ones. This KPI helps you evaluate the loyalty of your customer base.
• Referral Rate: Word of mouth is a powerful marketing tool. By tracking your referral rate, you can measure the success of your customer service efforts and identify areas for improvement.

These are just a few of the KPIs that will be covered in detail in this article. By following our step-by-step guide, you'll be able to calculate and monitor all seven metrics to ensure your property preservation business is running at peak efficiency. Let's dive in!

Customer Satisfaction

As a property preservation company, maintaining customer satisfaction is key to your success. Customer satisfaction measures how happy customers are with the services provided by the company. It is a crucial KPI that helps in retaining existing customers and attracting new ones.

Definition

Customer satisfaction is the measure of how well a company's products or services meet or exceed customer expectations. It is an indication of how happy customers are with the services provided by a company.

Use Case

Customer satisfaction is an essential KPI in the property preservation industry. This metric helps businesses to measure the satisfaction levels of their customers. It enables them to understand which areas require improvement, which services are performing well, and how to retain existing customers.

How To Calculate KPI

Calculation Example

KPI Advantages

• Helps in retaining existing customers
• Assists in attracting new customers through word-of-mouth recommendations
• Enhances the company's reputation
• Provides valuable insights into which services are performing well and which require improvement

KPI Disadvantages

• Can be influenced by external factors such as the economic climate
• The method of calculation can be subjective
• Customers may not always provide honest feedback

KPI Industry Benchmarks for the KPI: 'Customer Satisfaction '

The average industry benchmark for customer satisfaction in the property preservation industry is around 80%. However, this may vary depending on the size of the company, the quality of services provided, and the customer's expectations. Companies should strive to exceed the industry benchmark by continuously improving their services and listening to their customers' feedback.

Repeat Clients

In any business, customer retention is critical, and tracking how many repeat clients you have is a key performance indicator (KPI) that can provide insight into your company's overall customer satisfaction and loyalty. Here's what you need to know:

Definition

Repeat Clients is a KPI that measures the percentage of customers who have made a return purchase. This metric helps evaluate the effectiveness of your customer retention strategies.

Use Case

Repeat clients are a vital component of any business, as they contribute significantly to revenue and are less expensive to retain than to acquire new customers. Keeping track of how many repeat clients you have helps you identify how well you are faring at keeping your customers happy and loyal. This insight can be used to improve your products, services, and marketing strategies.

How To Calculate KPI

To calculate the Repeat Clients KPI, take the number of customers who have made a repurchase and divide it by the total number of customers in a given period, typically a year. Multiply the resulting number by 100 to get the percentage.

Calculation Example

If you have 1,000 customers and 200 of them make a new purchase during the year, you can calculate your Repeat Clients KPI as follows:

KPI Advantages

• Repeat clients are an excellent source of revenue, as they cost less to retain than to acquire.
• This KPI provides insight into your company's overall customer satisfaction and loyalty.
• By tracking repeat clients, you can evaluate the effectiveness of your customer retention strategies and improve your products, services, and marketing initiatives.

KPI Disadvantages

• A high Repeat Clients KPI can indicate that your company isn't attracting new customers, which could be detrimental in the long run.
• You may need to get a large sample size before you can effectively evaluate your Repeat Clients KPI.
• Some businesses may not be able to calculate this KPI effectively, such as those that offer one-time services such as car repairs or dental procedures.

KPI Industry Benchmarks

Industry benchmarks for the Repeat Clients KPI vary depending on the sector and the business model. For example, an e-commerce business might have a Repeat Clients KPI of 25%, while a consulting company may have a KPI of 70%. It's important to compare your Repeat Clients KPI against your industry's benchmarks to identify areas for improvement.

Referral Rate

As a property preservation business owner, you know that maintaining a steady flow of new clients is essential to your success. Referral rate, or the percentage of new clients that come from referrals, is a key performance indicator (KPI) that can help you track the effectiveness of your referral program. Here's everything you need to know about referral rate as a property preservation KPI.

Definition

Referral rate measures the portion of new clients that come from referrals from existing customers. Referrals can come from a variety of sources, including past clients, business partners, or other contacts in your network.

Use Case

Referral rate can help you determine the effectiveness of your referral program. By tracking this KPI, you can identify which referral sources are most valuable and which channels are most effective for converting referrals into new clients. This can guide your marketing strategy and help you prioritize your outreach efforts.

How To Calculate KPI

Calculation Example

Let's say your property preservation business acquired 10 new clients last month, and 3 of those new clients came from referrals. Your referral rate for that period would be:

KPI Advantages

• Referral rate is a straightforward and easy-to-understand KPI that can be tracked over time to identify trends and changes in the effectiveness of your referral program.
• Referrals can be a low-cost and effective way to acquire new clients, making this KPI particularly valuable for property preservation businesses that operate on tight budgets.

KPI Disadvantages

• Referral rate only tells part of the story. It does not take into account the quality of the referrals or whether the new clients acquired through referrals are a good fit for your business.
• Referral rate can be influenced by factors outside of your control, such as changes in your industry or the economy, reducing the KPI's usefulness as a measure of your referral program's effectiveness.

KPI Industry Benchmarks

Industry benchmarks for referral rate can vary widely depending on your specific location, target audience, and referral program. However, a referral rate of 20-30% is generally considered to be a sign of a successful referral program.

Referral rate is just one of several important KPIs that property preservation businesses should track to ensure their continued growth and success. By monitoring this metric closely and following best practices for referral programs, you can establish a reliable, cost-effective source of new clients that will help your business thrive.

Average Job Completion Time

As a property preservation business owner, you know that finishing every job in a timely manner is crucial. Keeping track of your average job completion time is an important KPI metric to consider. Here's what you need to know:

Definition

The Average Job Completion Time is the amount of time it takes for your team to complete a work order from start to finish and deliver it to the client.

Use Case

By monitoring the average job completion time, you can quickly identify any inefficiencies within your team's workflow. It can help you identify if there are any major obstacles in the process and if training or additional support is required.

How To Calculate KPI

Here's how to calculate the Average Job Completion Time:

Calculation Example

Let's say your team completed six work orders last week, and it took 3, 4, 5, 4, 6 and 3 hours to complete each order, respectively:

So your team's average job completion time last week was 4.17 hours.

KPI Advantages

• Highlights areas of workflow inefficiencies
• Helps prioritize areas in need of improvement
• Increases overall client satisfaction

KPI Disadvantages

• Can negatively impact team morale if the metric is used to punish employees
• Not suitable for comparing different types of work orders
• May not provide an accurate representation of work quality

KPI Industry Benchmarks

According to industry benchmarks, a typical acceptable range for average job completion time is between 4 and 6 hours per job. However, this range can vary depending on the type of work order or field services business.

Cost of Goods Sold

Cost of Goods Sold (COGS) is a financial KPI that is used to measure the direct costs incurred in producing goods or services that are sold to customers. It is an essential metric as it helps businesses determine their profitability, pricing strategies, and inventory management.

Definition

COGS is the direct cost of producing goods or services, including the cost of raw materials, labor, and overhead expenses. It excludes indirect costs like marketing and advertising, rent, and utilities.

Use Case

COGS is used to understand the actual cost of producing goods or services and how it affects a business's profitability. By tracking COGS, a business can optimize its operations to reduce costs and increase profits. It also helps in setting pricing strategies by determining the minimum price a product should be sold for, which covers its production cost and leaves a healthy margin for profit.

How To Calculate KPI

Calculation Example

Assume that ABC Limited sells only one product: Widgets. At the beginning of the year, it had 1,000 Widgets in the inventory worth $10,000. During the year, it purchased Widgets worth $50,000, and at the end of the year, it had 500 Widgets in the inventory worth $5,000.

So ABC Limited's COGS for Widgets is $55,000 for that year.

KPI Advantages

• Helps in determining the actual cost of producing goods or services.
• Helps in setting pricing strategies by identifying the minimum selling price.
• Provides valuable insights to optimize business operations and increase profits.

KPI Disadvantages

• It does not consider indirect costs, which are also important for calculating overall profitability.
• It assumes that all inventory is sold and does not take into account inventory spoilage or wastage.
• It does not consider the varying levels of scalability of different business models.

KPI Industry Benchmarks for the KPI: 'Cost of Goods Sold'

Industry benchmarks for COGS vary widely depending on the sector and the type of product or service. For example, a software company's COGS would be significantly lower than a manufacturing company. It is essential to compare COGS with industry benchmarks to identify areas where costs can be cut to increase profitability.

Gross Profit Margin

As a property preservation entrepreneur, it is essential to understand the importance of Gross Profit Margin as a KPI metric for your business. In the property preservation industry, Gross Profit Margin plays a fundamental role in determining the performance and profitability of your business.

Definition

Gross profit margin refers to the percentage of sales revenue that remains after subtracting the direct cost of goods sold. It represents the amount of money you make before accounting for indirect expenses such as overhead and administrative expenses.

Use Case

Gross profit margin is a crucial KPI as it shows the degree of profitability and efficiency of your business operations. By tracking and measuring gross profit margin, you can determine if your property preservation business is generating sufficient revenue to cover all associated costs and earn a profit.

How To Calculate KPI

To calculate gross profit margin, you need to subtract the cost of goods sold from the total revenue and divide the result by the total revenue. The formula for Gross Profit Margin is:

Calculation Example

For instance, if your property preservation business generates $100,000 in revenue, and your cost of goods sold for the same period is $40,000, your gross profit margin would be:

KPI Advantages

• Easy to calculate and understand
• Helps in evaluating the efficiency of your business operations

KPI Disadvantages

• Does not consider indirect expenses and variations in pricing between products
• May lead to incorrect conclusions if used in isolation without considering other financial metrics

KPI Industry Benchmarks

Real estate industry benchmarks suggest that a gross profit margin of 25% or higher is considered good, with many successful businesses averaging around 50% or higher.

Accounts Receivable Turnover

Accounts Receivable Turnover (ART) is a KPI metric for businesses to track how efficiently they collect payments from their clients. Its calculation includes dividing the total net credit sales by the average accounts receivable for a specific period.

Definition

Accounts Receivable Turnover calculates the number of times a business can collect its average accounts receivable in a year.

Use Case

ART metric is important for organizations to determine their clients' creditworthiness and to measure the effectiveness of their credit and collection policies. This KPI impacts cash flow and working capital, making it crucial for businesses to track and control.

How To Calculate KPI

To calculate Accounts Receivable Turnover, use the following formula:

Calculation Example

Suppose a company's net credit sales for the year were $100,000, and the average accounts receivable was $10,000. Then the ART KPI would be calculated as:

The ART is 10, indicating that the company can turn over its accounts receivable ten times per year.

KPI Advantages

• Efficiency: ART is a clear indication of the efficiency of a company's credit and collection policies.
• Cash Flow: Tracking ART can help the company understand and improve its cash flow by collecting outstanding dues on time.
• Credit Policy: ART can help businesses revise and establish more effective credit policies and improve their client selection process by avoiding risky clients.

KPI Disadvantages

• No Consideration of Time Value Of Money: ART does not consider the time value of money, even though it measures the number of collections per year. In simple words, money collected earlier is more valuable than money collected later.
• Industry-Specific: ART may differ across industries, and the benchmark of one industry may not suit the other, making it difficult for companies to set any meaningful targets.
• Complexity: ART may not be an independent or standalone KPI and must be used in conjunction with other KPIs to get a comprehensive idea of the organization's credit cycle.

KPI Industry Benchmarks

The ART KPI industry benchmarks may vary depending on the organization's size and industry-specific practices. As a rule of thumb, an ART greater than one is considered good, with high ART indicating that the company can collect its receivables faster.