Most successful businesses will have KPIs (key performance indicators) in place to focus all those working within are aligned to the same overall strategy.
Before we dive in, let's look at a few essential points first:
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- KPI #1 Customer Retention
- KPI #2 Revenue from Service
- KPI #3 Job Locations
- KPI #4 Response time
- KPI #5 Revenue and revenue growth
- KPI #6 Operational performance
Why do KPIs matter?They will also be able to establish and measure how well each individual is faring. It will also help companies establish what changes need to be made to improve productivity or successes. This is arguably the most important reason for why businesses set key performance indicators.
It's also valuable to have KPIs in place as they help to put the emphasis on learning and goal-driven behaviour. They can help to establish an environment of education in the workplace, where people are constantly developing their skills in order to reach their goals.
If someone does not meet their KPI, it gives you the opportunity to train them on the areas that are proving to be their weaknesses. You can show them how to do things differently in order to perform better.
KPIs also help to provide an important and immediate snapshot into how your company is performing overall. This can be crucial in a competitive field, where you need to constantly stay ahead of others.
With the information gained from KPIs, you can continually make adjustments to your work processes. It shows what standards you're meeting and this information can also be used for customers or investors as a demonstration of why they should work with your company.
It's important to have the right KPIs in place because it motivates staff towards a common goal, but the emphasis is upon 'right'. If the KPI is too unattainable, it is important that the goal posts are moved to a more realistic position - otherwise, staff will quickly become disinterested and frustrated if they feel it's impossible to reach.
When right though, key performance indicators can also help to encourage accountability amongst staff; it gives you quantifiable proof that an employee is or isn't engaged and active in the company.
KPIs can also help to boost employee morale and sense of job satisfaction, which can be crucial in retaining staff. This can also help if you have a bonus structure in place, as it offers a clear and identifiable target for staff to reach in order to gain this.What are the right KPIs for your HVAC business?
It's important to choose the right KPIs for your heating, ventilation and air conditioning business, as they need to align closely with the work that you do and the results that you want to see from your staff.
It isn't just a case of one-size-fits-all. You can also put different KPIs in place across the board, so what works for your engineers may not work for your CEO.
However, the goal is ultimately the same. Results!
KPI #1: Customer retention
This KPI is particularly important as, without customers, you won't have a functioning, profitable business. This can help those working on the front-line understand just how important they are in this process.
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.
However, it comes from the management down, and it is often when staff feel appreciated and are treated well that they will filter this sense of satisfaction down to the customers that they work with. Otherwise, what incentives do they have to not grumble about everything they're doing in front of customers?
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.
Often setting KPIs in place for revenue targets will go hand-in-hand with some kind of bonus or profit share, as it gives staff a real incentive and boost to hit that goal when they're able to share in this success.
It will see employees up-selling while on jobs or spreading the word about your business in their social media, through leaflets and so forth.
KPI #3: Job locations
Increasing how many jobs you are able to take on in a smaller area through extra marketing and efforts helps to increase productivity as your staff are driving fewer miles to reach each job.
This helps to save time not working on paid jobs, and also means you can increase how much is said about your business through word of mouth.
KPI #4: Response time
How quickly your staff respond to jobs can influence how customers perceive their work, but also how many tasks they can complete within one day.
Therefore getting your response time covered is really beneficial to your company and is a key KPI to set. This can often help to boost the profitability of the company, which comes back down to staff trying to meet their targets in order to benefit from this.
KPI #5: Revenue and revenue growth
For senior management, one of the most important KPIs that can be set will be based on the revenue and its growth. This is what drives a business forward, and it is important that this is being achieved consistently.
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.
A great way to improve revenue growth is to diversify the type of customers you take on. 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.
The template experts at Venngage even have an easy guide, complete with job proposal templates, that you can use to get started.
KPI #6: Operational performance
The strategy for operational performance will often feed into a broader corporate strategy. Often these KPIs will be based on objectives of quality, speed, flexibility, costs and dependability. The success of these is typically driven by whether the customer feels their needs have been met.