Husband and wife David and Irum Jones started
together nearly twenty years ago to offer electrical contract work in the Dallas/Fort Worth area.
Since then, they have added heating, cooling, and air purification services and are making over $4 million in annual revenue.
Here are just a few examples of how Irum, who now acts as the company’s Chief Operating Officer, uses KPIs to make data-informed decisions that directly impact her company’s revenue.
Irum Tracks Data over Time that Helps Her Understand External Influences Impacting Her Business
To track her KPIs, Irum compares year-to-date revenue, month-to-date, last month, and numbers from the same time last year because there are so many variables that can impact her financials in any given time period. KPI (Key Performance Indicators) is a measurable metric, such as your net profit margin or your average revenue per customer, to help you understand the performance of your business. By making these comparisons, Irum is able to identify patterns that help her make spending decisions.
Normally, January is filled with residential work. “People are wanting more innovation because they've visited all of their friends during the holidays and they want their homes to look better than the homes they just visited. Those are examples of seasonal trends.”
In this one year, January was anticipated to be slower than in previous years, and Irum knew it was because of the rain. It’s been a wet first quarter with very few dry days. Consumers aren’t going to inquire about home improvements when it’s raining and foggy.
In addition, it was an election year, and Irum has seen the home services industry as a whole slow down when customers are distracted by global, national, and local news. Electrician on Call also felt the crunch. As a result, she has kept their marketing expenses at a minimum. “We didn't rev up our marketing expenses, because regardless of what marketing we do, we know that consumers are not paying attention. That's why it's so important because if you're not paying attention, you would go, ‘Oh my gosh, my business is failing. I think I'm just gonna keep doing what I'm doing. I'm gonna spend all this money on marketing. Your marketing is failing and you’re more out-of-pocket.”
She also knows that
is a traditionally slower time for her business for renovation projects, but thrives on the service repair requests. But that by the end of March, customers tend to bounce back and begin requesting all services to prepare for the summertime.
“That's the magic behind KPIs. When you pay attention to them long enough and you start understanding the data and all of the different influences of why something dropped or increased in numbers, you start to understand and pay attention to things outside of your business.”
She Maintains Systems That Hold The Company Accountable
For instance, Irum tracks the total of all of their monthly invoices divided by the total estimates given for those same jobs. This number fluctuates monthly and gives Irum a sense of whether they have too many promotional specials for the same type of service.
“If you're putting up a Mother's Day Special for repairs and then a Memorial Day Special for the same type of repair, it confuses the customer and now the customer is spending time researching all the coupons that hold the same value instead of calling to book the job. So you don't want to be in a situation where you've got ten coupons floating out there for ten different things, but the value of the savings is the same. You don't want stuff like that happening where someone comes in and they're paying less than 75% because you've wasted so much of their time on the front end and you're actually losing money, because you’ve stretched out the project.”
Irum also maintains processes that track more than just numbers. On a day-to-day basis, Irum asks her dispatchers and technicians to file detailed reports of their days.
For instance, dispatch provides a report of every call, even if they were wrong numbers or price shoppers that were never going to turn into a work order.
“Because that one call took my dispatcher away from something else that they were tasked to do. So we really want to know what's going on on a day-to-day basis. A productivity report tells you who's doing what and how productive they are.”
Technicians write up similar reports. ”When I look at the reports provided by them on a daily basis, I'm able to adjust anything out there in the field that may have interfered with our estimate and scheduled work. My team knows to surfaces it inefficiencies so that we can maximize our day.”
She offered the example of tracking how long it takes a supply house to load up supplies. Where one company took 45 minutes to load up everything, another supplier had a kit prepackaged. “It took us away from an extra call on our schedule by delaying our team by four hours. We need to reevaluate our sources. If the team took two additional hours to get this done because we weren't clear on the request, or ran into a structural issue, then we modify our estimating process so that we can account for the average time we spend on a worksite to do a specific task.”
Based on this kind of detailed tracking, Irum can make quick operational adjustments so that things flow better next time, including the overall customer experience.
She then can compare her weekly and monthly financial (or production) reports with her productivity reports. Understanding what is happening on a day-to-day basis provides a beneficial background to the numbers.
“If you handled all of those roadblocks in the productivity report as they came up, then your production report is a bottom-line number that tells you how you are really doing.”
These are just a few examples of how twenty years of tracking data have been critical to growing their successful business. Irum’s big advice to other business owners is to simply dig into the details of the company.
“A lot of us get into the habit of thinking, ‘I own the business, but I'm too high level to look at the details,’ and you have to get out of that mentality. Even if it's not a comfort zone for you, you’ve got to learn all the different spaces of your business. Otherwise, that's where the hole is going to be that you're not spotlighting.”