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Published byBrittany Little Modified over 8 years ago
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Welcome to Financial Series #8 Benchmarking – Your KPI’s
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Your Hosts for Today’s Conference are: Gary Elekes in Nashville, Tennessee Gary Oetker in Plano, Texas
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Conference Objectives: Review the significance of Benchmarks and Key Performance Indicators (KPI’s). Review key KPI’s by market segment Review how to use Benchmarks and KPI’s to help evaluate financial performance.
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Review why and how to use Benchmarks Review residential replacement & service commandments Review residential replacement/service/maintenance and IAQ Direct Cost Models Review other residential replacement/service and maintenance Key Performance Indicators Review other business segment benchmarks and Key Performance Indicators Agenda for Conference
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Definitions Benchmarking: The process of comparing a company’s performance against Industry Standards or Key Performance Indicators (KPI’s). Key Performance Indicators (KPI’s): Critical performance measurements as modeled after successful companies in that particular market segment. Commandments The most important Key Performance Indicators.
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They help you evaluate your company operations They allow you to “ASK” why do we do the way we do and to challenge the existing norms They help quantity and identify what’s happening in operations to focus efforts on the “RIGHT” changes They help a company to get focused on the task at hand, which is to get better in a given area? They help create validity to goals Why Use Benchmarks?
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Compare your company to double-digit model companies (by market segment) Focus priorities on what you want to change Determine what if anything needs to be reviewed Operations may need to be adjusted to attain certain goals Always look at KPI’s in groups. Never get focused too much on one number How do You Use Benchmarks?
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Initial Insights Each market segment has its own set of KPI’s For example: revenue,office support staffing & overhead matrix No two companies are alike; each has its own Business Mix For example: A 30% overhead structure will work for a residential service & replacement, but is too high for Residential New Construction If your company serves multiple market segments, combine KPI’s to evaluate office staffing and overhead
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Residential Commandments
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Res. Replacement Direct Cost Model Note – Also watch gross Margin dollars per crew-day In conjunction with the Gross Margin Percentage
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Other Residential Replacement KPI’s Revenue per Sales Person Minimum $600,000, Target $1 million or more Revenue per installation crew per year (2 man crew) Minimum $500,000, Target $750,000 or more Average sale $3,800 or higher Gross Margin Dollars per crew day (2 man crew) Minimum $1,200 Target $1,500 and greater
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Res. Service Direct Cost Model
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Other Residential Service KPI’s Revenue per service technician Minimum $100,000, Target $125,000 or more Average ticket - $150 or more (total sales divided by total tickets) Gross Margin Dollars per technician per day Minimum $185, Target $300 or more Service Agreement sales – 25% or more of all eligible (less warranty, callbacks and Service Agreement calls Accessory sale or equipment lead – 20% or more of all eligible calls First time solution rate – 85% to 90%
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Res. Maintenance Direct Cost Model Pricing Strategy affects GM% range. Should range from 45% to 60% depending on strategy.
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Other Residential Maintenance KPI’s Revenue per maintenance technician Minimum $65,000 per maintenance technician per year Gross Margin Dollars per technician per day Minimum $150 Service Agreement sales – 63% or more of Precision Tune-Ups Service Agreement renewal rate 90% Accessory sale or equipment lead – 20% or more of all eligible calls
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Residential Overhead KPI’s
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Other Department KPI’s
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Consider Business Mix When Evaluating Overhead KPI’s
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Compare your company to the KPI’s Make assessment Decide on a list of issues that are creating the poor company performance Prioritize this list Consider meeting with key managers and employees before making changes Make the list public and allow for commentary Attain buy-in Make the changes happen Now What?
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Q uestions & A nswers
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