7 Essential Painting Contractor KPIs for Business Growth

Welcome to our latest blog post on the top seven painting contractor KPI metrics that you need to track and calculate. As a serial entrepreneur who has started and run numerous successful businesses, I understand the importance of monitoring key performance indicators to ensure growth and success in any industry.

The painting contractor industry is no exception. With an expected growth rate of 2.9% from 2020 to 2027, it's more important than ever to track these KPIs to stay ahead of the competition. Here are just a few of the KPIs that you should be monitoring:

• Customer satisfaction level: Measuring the satisfaction of your customers is crucial to ensure repeat business and growth.
• Number of repeat business/customers: The more repeat business you have, the more successful your business is likely to be.
• Revenue growth rate: Tracking your revenue growth rate can help you identify areas of opportunity and stay on top of your finances.

Interested in learning about the remaining KPIs? Scroll down to read more about how tracking and calculating these metrics can help your painting contracting business thrive.

Customer satisfaction level

Customer satisfaction level is a vital Key Performance Indicator (KPI) for painting contractors. It measures how satisfied customers are with the services provided by the contractor. Here's what you need to know:

Definition

Customer satisfaction level measures the degree of satisfaction of customers with a painting contractor's work or services.

Use Case

Painting contractors can use customer satisfaction level to analyze how happy their clients are with their services. It's an important KPI to track since customer satisfaction directly impacts the contractor's reputation in the industry, client retention, and referral rates.

How To Calculate KPI

To calculate customer satisfaction level, take the number of satisfied customers and divide by the total number of clients. Multiply the result by 100 to convert the answer into a percentage.

Calculation Example

For instance, if a painting contractor has completed services for 100 clients and 85 of them are satisfied, the customer satisfaction level would be:

KPI Advantages

• Helps painting contractors gauge how happy their clients are with their services
• Provides insights into areas where contractors can improve their services
• Can help increase customer retention, leads, and referral rates

KPI Disadvantages

• Measuring customer satisfaction level typically involves conducting surveys, meaning it can be time-consuming and expensive
• Responses may not always be accurate or representative of the contractor's client base

KPI Industry Benchmarks

The average customer satisfaction level varies by industry, but according to a study conducted by the American Customer Satisfaction Index, the average score for construction contractors (which includes painting contractors) is a score of 65 out of 100.

Number of repeat business/customers

As a painting contractor, it's crucial to keep track of the number of repeat business/customers. This is one of the key performance indicators (KPI) that can help you determine the loyalty of your clients and how well you're meeting their needs.

Definition

This KPI measures the percentage of customers who have used your services more than once within a specific time frame, usually a year. It's an important metric for driving business growth, as repeat customers are more likely to purchase more services from you and recommend you to their friends and family.

Use Case

If you want to grow your business and increase profits, it's essential to retain existing clients. The number of repeat business/customers KPI can give you insights into how well you're doing this. It can also help you identify which clients need extra attention to keep them coming back.

How To Calculate KPI

Calculation Example

Let's say you had 100 customers in the past year, and 20 of them returned to use your services again:

This means that your repeat business/customers KPI is 20%.

KPI Advantages

• Helps you identify loyal customers and reward them for their loyalty.
• Can help you create targeted marketing campaigns for repeat customers.
• Gives you insights into your customer satisfaction levels and how well you're meeting their needs.

KPI Disadvantages

• Doesn't take into account the frequency of repeat business.
• Not all customers may have the need for repeat services, such as if they move to a new location.

KPI Industry Benchmarks

According to industry research, the average number of repeat customers for painting contractors is between 20% - 30%. This number may vary based on factors such as location, services offered, and customer demographics.

Revenue growth rate

As a painting contractor, it's important to track revenue growth rate to ensure that your business is on the right track. This KPI metric measures the percentage increase in revenue over a specific period, such as a month, quarter, or year.

Definition

Revenue growth rate is the metric that shows the percentage increase in revenue during a specific period.

Use Case

Tracking revenue growth rate is essential for painting contractors looking to grow their business. By measuring this KPI over time, you can identify whether your business is growing or not and make decisions accordingly.

How To Calculate KPI

To calculate the revenue growth rate, you'll need the revenue figures from the current period and the previous period. Then, use the following formula:

Calculation Example

Let's say that your painting business generated $100,000 in revenue in Q1 of this year and $80,000 in Q1 of last year. To calculate the revenue growth rate, plug the numbers into the formula above:

KPI Advantages

• Helps measure company growth
• Provides insight into revenue improvement opportunities
• Encourages goal setting

KPI Disadvantages

• Can be impacted by seasonal trends
• Does not account for variations in expenses
• Does not account for changes in pricing

KPI Industry Benchmarks

The revenue growth rate for painting contractors can vary depending on factors such as size, location, and competition. However, the industry benchmark is around 10-15% per year.

Average project completion time

As a painting contractor, one of the crucial key performance indicators (KPIs) to track and measure for your business success is the average project completion time. In this chapter, we will explain the definition, use case, how to calculate, calculation example, advantages, disadvantages, and industry benchmarks for this KPI.

Definition

Average project completion time KPI measures the average time taken to complete a painting project, from the start date to the end date. It is calculated by dividing the total time taken to complete all painting projects with the total number of projects completed.

Use case

This KPI helps painting contractors analyze their operating efficiency and productivity. It helps them to evaluate their team's performance and allocate resources accordingly. A shorter project completion time indicates higher efficiency, productivity and customer satisfaction, while longer project completion time indicates the opposite.

How to calculate KPI

To calculate the average project completion time KPI:

• Identify the total number of painting projects completed within a specific period (usually monthly or quarterly).
• Sum up the total time taken to complete all painting projects in that period.
• Divide the total time by the total number of projects completed to get the average project completion time.

To illustrate the formula:

For instance, if you completed 10 painting projects in a month, with a total project duration of 100 days, the average project completion time would be 10 days.

Calculation example

Assuming your painting company completed 30 projects in three months. The details of each project are below:

Using the formula above, we can calculate the average project completion time over three months:

The average project completion time for this painting contractor over the last three months is 27 days.

KPI Advantages

• The KPI helps painting contractors identify areas for process improvement, increasing efficiency, and productivity.
• The KPI provides insights into team performance, such as whether they need a training program to improve their skills.
• The KPI assessment may help to plan for future projects realistically, including evaluating the necessary resources, managing project timelines, and setting customer expectations.
• The KPI can help improve the painting contractor's reputation since customers prefer contractors who complete projects within a reasonable duration.

KPI Disadvantages

• The KPI does not consider the quality of work, which might be sacrificed for speed to meet the deadline.
• The KPI may not consider complex projects that may take a longer duration to complete than simple projects.
• The KPI may not reflect external factors that affect the length of time taken to complete a project, such as weather changes.

Industry Benchmarks

Industry benchmarks provide a basis for companies to compare their performance to other companies in their industry. The average project completion time KPI benchmark for the painting contractor industry is 25-30 days.

Employee satisfaction level

Painting contractors must keep their employees motivated to maintain their productivity levels and quality of work. One way to measure employee motivation and job satisfaction is through the employee satisfaction level KPI.

Definition

The employee satisfaction level KPI measures how satisfied your employees are with their jobs and the work environment.

Use Case

The employee satisfaction level KPI is useful for assessing employee morale and retention rates. A high satisfaction rate indicates that employees are likely to stay on, maintain their productivity levels, and deliver high-quality work.

How to Calculate KPI

Calculation Example

If your painting contractor business has 50 employees and 40 of them are satisfied with their job, the calculation would be:

KPI Advantages

• The employee satisfaction level KPI helps you identify employee satisfaction levels, which, in turn, guide you in taking measures that improve job satisfaction rates and motivate employees to be more productive.
• When you have high satisfaction levels, you'll have more engaged employees who are less likely to leave or miss work.

KPI Disadvantages

• The employee satisfaction level KPI can be subjective as different employees have different beliefs and views.
• If your employees are unhappy, the KPI won't tell you why they are dissatisfied or provide any insights into the root cause of the concern.

KPI Industry Benchmarks

Industry benchmarks are useful in monitoring your performance and determining how you're performing compared to competitors. According to a survey done by Glassdoor, the average employee satisfaction level for the painting and contracting industry is around 76%.

Project Success Rate

As a painting contractor, ensuring project success rate is critical to ensure the business stays profitable. Project success rate is the percentage of projects completed on time and within budget, while meeting the customer's expectations.

Definition

The project success rate is the measure of how well the painting contract completes their projects.

Use Case

Project success rate is essential in the painting contractor business to determine how well the company is doing in terms of completing projects on time and within budget. If a painting contractor has a high project success rate, it shows that they are efficient and effective in their work, which enhances their reputation with customers and partners.

How To Calculate KPI

The formula to calculate project success rate is:

Calculation Example

As an example, suppose a painting contractor company completed 100 projects in a year, out of which 75 were completed on time and within the budget. Then the project success rate for that company would be:

KPI Advantages

• Helps to determine if the business is profitable
• Improves the company's reputation to customers and partners
• Assists in finding areas for improvement in the painting contracting workflow

KPI Disadvantages

• It does not indicate why projects were unsuccessful, only that they were
• There can be variability in how customers define the expectations for project success
• It only takes into account completed projects, disregarding incomplete projects or projects in progress.

KPI Industry Benchmarks

According to the Painting and Decorating Contractors of America (PDCA), the average project success rate for painting contractors is approximately 80%.

Net profit margin percentage

Net Profit Margin Percentage measures the profit a painting contractor makes on each dollar of revenue earned. It is a crucial KPI as it has a direct impact on the contractor’s financial performance.

Definition

The Net Profit Margin Percentage is the ratio of a company’s net profit to its revenue. It indicates how much of every dollar of revenue collected on a project is net income for the contractor.

Use Case

As a painting contractor, it is essential to know the Net Profit Margin Percentage for each project, as it helps in determining the profitability of the project.

How to Calculate KPI

Calculation Example

KPI Advantages

• Net Profit Margin Percentage helps contractors to analyze their pricing strategy and adjust it accordingly to maximize profits.
• It enables contractors to track their business performance over time, as well as ascertain the financial feasibility of future projects.
• It helps contractors to identify areas of their business where they need to improve performance.

KPI Disadvantages

• It can be challenging to calculate the Net Profit Margin Percentage accurately due to the variable costs encountered on painting projects.
• The Net Profit Margin Percentage may differ between large and small projects due to differences in materials, labor costs, and other factors, making comparison difficult.

KPI Industry Benchmarks for the KPI: ' Net profit margin percentage '

Net Profit Margin Percentage benchmarks differ depending on the size and type of painting contractor company. New painting businesses may only realize a few percentage points of profit, while established businesses operating in profitable markets may generate profits in the mid-teens or higher.