Is Your HVAC Business Using the Right KPIs?

Rhys Pattimore
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Note: this article has been updated to bring you the latest and greatest advice!

Identifying the right key performance indicators (KPIs) will be unique for every business. It’s a challenge that will require attention to detail so you can make impactful adjustments and effectively track growth.

When setting out to create KPIs for your HVAC business, it’s necessary to consider how you might stack-up against the competition and how the right KPIs will help you get ahead. 

However, it can be a slippery slope if you focus too much on what they’re doing. Instead, your main focus when it comes to identifying the right KPIs is to ensure they’re correct for your business, and yours alone.pillar pages icon - target_missed-01

Successful businesses will have KPIs in place as a way to ensure that everyone working within the company is on the same page and working toward a common goal

With that said: do you know what your goals are?

Before we dive in to help, let's look at a few essential points to consider. At the end, we’ll also consider how wellness plays a role in establishing KPIs, too.

Navigate our article by using the contents list, below:

When you’re done, be sure to download our KPI Calculator tool, to explore even more!

Why do KPIs matter?

Whether you’re a smaller residential business, or working up to deal with larger commercial jobs, with the right KPIs you’ll be able to establish and measure how well your business is performing.

With them, you can focus on goal-driven behaviours amongst your teams.

Whether it’s setting KPIs for individuals, an entire team, or specific departments, getting these points in place will make it easier to see how your business is faring. From there, you’ll be in a better place to assess areas to improve, or even celebrate big wins, all of which can be used to motivate staff and drive your business forward.

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For HVAC companies who want to improve (or any other field service industry, really), identifying the right KPIs is necessary if you want to improve efficiency, productivity, and drive success. These are arguably the most important reasons for why businesses set key performance indicators.

After all, it’s one thing to say “let’s go have a great day!” but if you have a specific goal, it adds a deeper level of motivation to the workforce.

As a rough example, let’s say you have a KPI for an individual engineer to monitor their first-time fix rate; with that in mind, an engineer may be more motivated to think if they’re in the best position and properly prepared to meet that goal i.e.

  • Have they planned their routes?
  • Do they have all the tools they need?
  • Do they have all the details they need about a job?
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These are all easier to track with proficient software tools as well and combined with clear KPIs, field teams can start to think how they can affect the goals, and for operations managers, they can think how best to equip their team in order to impact those targets, too.

If everyone is asking “what can I do to move us closer toward making an impact?” then you’ve succeeded in stimulating creativity and education in the workplace. This way, your people are always striving to develop their skills and achieve business goals; this information can also be used for customers, or to investors as a demonstration of why they should work with you, too!


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Why choosing the right KPIs for your HVAC business is important

While it can sound like identifying the right KPIs could add pressure on your team (particularly if they’re already dealing with emergency jobs or difficult customers, which can be its own challenge entirely), it’s important to think about KPIs as a guiding tool.

If someone does not meet their KPI, it’s not a point to punish, but an opportunity to identify areas for improvement. With the data in place, you can measure and whether training might be needed, or even if you’d set your heights too high (or even too low)!

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Either way, with the right KPIs for a HVAC business in place, you can identify these points and react as needed.

Having KPIs in place motivates staff towards a common goal, but the emphasis is upon identifying the right ones. If they’re unattainable, you may find that staff quickly become disinterested, disillusioned, or even frustrated with the impossible demands.

When there’s a balance, though, the KPIs you have will help staff to be accountable and encourage you to set goals, all of which will improve productivity and efficiency.

In this way, KPIs can provide an important and immediate snapshot into how your company is performing overall. It’s crucial to have this information, especially in a competitive field like HVAC, where you need to constantly work to stay ahead.

Now, let’s take a look at what some of five of those goals could be and ways to impact them. 

Five important KPIs to track for HVAC businesses:

While you’ll no doubt have an idea of the targets you want to hit yourself, we've listed give main points to keep in mind, but don’t forget: you can download the tool we’ve created, available at the end of this post, to help you take things even further, too!

KPI #1: Customer Retention

Making customer retention a KPI and discussing how every single person in your company can impact it will help employees understand how essential they are to the overall success of the business. After all, without customers, you won't have a functioning, profitable business so every individual matters.

The Future of Commerce reports that “According to Aberdeen Research, companies that have a high level of customer satisfaction also have an 89% customer retention level.”

Customers will want to work with businesses that are friendly, polite, efficient, and timely. If your staff wear their uniform with pride and are articulate about the services that you offer, this will all help to retain customers.graphic_magnet_pillarpage-01

However, it comes from the management down. As mentioned, when staff feel that their work is appreciated and they’re treated with respect, that can help instil a sense of satisfaction and pride in their work than can filter down to impact your customers.

If engineers are equipped with the tools that help them interact more effectively with customers, then this goes on to impact the customer journeys they’re being taken on, as well as their overall experience and satisfaction.

KPI #2: Revenue from Service

Every job has a price. It's the bottom line of your business and what pays the salary of each employee. Trying to get the most revenue from your service will help to boost profits. For instance, if your admin team's KPI is to send a certain number of error-free invoices, then it can help to invest in an automatic invoicing tool to help them.

As ProV points out, “It can greatly affect your bottom-line because it allows you to recognize and evaluate what percentage of jobs have been completed, but not yet invoiced, or vice-versa.”

So, with the right software, you can track jobs and see if they’ve been paid, or what’s outstanding; these factors will demonstrate not just overall profit for your company, but profit per job and highlight where productivity could be improved.

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As for motivating staff, when it’s feasible to do so, introducing a reward system like a bonus structure tied to KPIs, or another type incentive can also impact results

After all, it offers a clear and identifiable target for staff to reach with the potential “carrot” at the end being a tantalizing prospect to keep them going, too.

That said, financial incentives aren’t the only thing you can offer. Think outside the box. You might come up with ideas, like a day for team activities if everyone hits their goals, or offer employees an opportunity to learn something new, either from an experienced member of staff, or via a training course.

KPI #3: Job Locations

Increasing how many jobs you are able to take on in a smaller area (or growing beyond to tackle new locations) is a big way to boost productivity.

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Equally, ensuring your staff are using their time more wisely and making the most out of intelligent software to improve routes and strategies, means you can put an emphasis on efficiency.

It might turn out that, thanks to a combo of good planning and great software, your staff are driving fewer miles to reach their jobs and doing more work (we’ve seen people who’ve made use of suggested appointments to do an extra job per day, per engineer) as a result.

This is something you could think about tracking in more detail, especially if you’re committed to contracts with SLAs (service level agreements) that require your teams to arrive within specific timeframes (explore more on how Commusoft can help with SLAs).

Not only does this sort of tracking help to save time when engineers aren’t working on paid jobs, but it also means you can increase how much is said about your business through word of mouth (digital or otherwise).

If you’re hitting targets, getting the job done, and being as efficient as possible, word will spread!



KPI #4: Response Time and First-Time Fix Rate

Speaking of SLAs, how quickly your staff respond to jobs not only influences how customers perceive the work being done, but also how many tasks they can complete within one day. It's part of how you take customers on world-class journeys!

red 3-01Increasing your response time is critical to your company and an essential KPI to track.
 
If you can make it a target for your staff (e.g. Admin staff must respond to a query within 10 minutes, or engineers have to make sure they don’t exceed their service windows, etc.) it can lead to a great boost in profitability.

Not only that, but alongside response time, if you're monitoring first-time fix rates you’re not just seeing how quickly you’re getting to jobs, but how efficiently you’re completing them too!

This is a great way to see how you’re directly impacting your customer’s peace of mind.

After all, even with the nicest engineers, no one wants contractors to constantly come to their home or place of work, especially if it’s because of you that work is being done inefficiently. In a lot of cases you’ll be losing more money than the job’s worth and earn yourself a poorer reputation.

KPI #5: Targeting Revenue Growth

For senior management, one of the most important KPIs that can be set will be based on the business’ revenue and its growth. This is what drives a business forward, and it’s important to ensure it stays constant.

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This KPI for management will relate to many smaller KPIs set to those working below them as they will all feed into improving the amount of revenue gained.

Diversifying the type of customers you take on can be a great way to rejuvenate your revenue growth if you feel like you’ve been stagnating. Domestic customers are nice to have but commercial jobs are where the money's at. Sending job proposals should be part of your revenue-specific KPIs, as well as researching for new potential leads.

The template experts at Venngage even have an easy guide, complete with job proposal templates, that you can use to get started.

What to take away when identifying the right KPIs for your HVAC business

Now that you’re familiar with some of the most important KPIs and even some strategies to plan around them, we’d encourage you to take a look at the video below, with Cristina, to explain a little more about your next steps…

However, it's not all about productivity....

Balancing Wellness with KPIs

It’s worth pointing out that as important as they are, KPIs aren’t the be-all and end-all of stepping things up in your business. It’s good to recognise that there are many factors that influence an individual’s performance: whether personal or professional.

So, if a team member isn’t meeting their KPIs, it can help to take a softer approach and see if anything is bothering them, or if they need assistance in some way.

Wellness in the workplace is something to keep in mind when it comes to monitoring performance. After all, a healthy, happy team is frequently more productive, too!


📽️  Click to learn more about Wellness in the Workplace for Field Services


If employee well-being is a concern and you’re not focusing on KPIs, introducing them could help to boost morale and improve job satisfaction as they give teams something to focus on. However, you also want to be careful to not add more to their plate and forcing KPIs could lead to even greater dysfunction...it's ultimately about balance and you'll find that easier to achieve when you collaborate with staff, so don't ignore them!

We hope you've found the information above helpful and to take things a little further, we've put together a resource that may help you find the right KPIs that work for your business. Altogether, you can take more responsibility to make sure they align with the work that you do and the results you want to see!

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If you want to learn more about Commusoft's field service software, please see our product blog.