Essential KPIs for do-it-yourself businesses

Introduction

As a DIY business owner, staying on top of the right benchmarks is key to ensuring your business succeeds. Key Performance Indicators (KPIs) act as a gauge of success and allow you to track and calculate areas for improvement. Knowing what to measure and how to track it is key to making improvements and being successful. The top seven do-it-yourself KPI Metrics are customer satisfaction rate, net profit margin, repeat customer rate, number of referrals, average time per service, average amount charged per job, and customer turnover rate. employees. This blog post will explain what these metrics are and how to track and calculate them.

Customer satisfaction rate

Definition

Customer Satisfaction Score (CSR) is a KPI metric that measures the level of customer satisfaction with the services provided by a DIY company. It is calculated by taking the number of satisfied customers and dividing it by the total number of customers served.

Benefits of Tracking

• It helps to identify areas that require improvement in the services provided.
• It provides an objective measure of customer satisfaction.
• It allows you to measure customer loyalty.
• It can be used to compare performance at different brilliant companies.

Industry Benchmarks

The average customer satisfaction rate for a handyman business is around 80%. A customer satisfaction rate of 90% or higher is considered excellent.

How to calculate

The formula to calculate the customer satisfaction rate is:

Calculation example

For example, if a handyman business served 10 customers in the last month and 8 of them were satisfied with the services provided, the customer satisfaction rating would be:

Tips and tricks

• Survey customers to obtain feedback on their experience with the services.
• Track customer satisfaction rate over time to monitor performance.
• Provide incentives to customers who are satisfied with the services.
• Encourage customers to provide honest feedback about their experience.

The net profit margin

Definition

Net Profit Margin (NPM) is a KPI gauge that measures a company’s financial performance by calculating the ratio of net profit to total revenue. This metric helps business owners and investors gauge a company’s efficiency in generating profits by comparing total income with total expenses.

Benefits of Tracking

Tracking the NPM metric helps business owners and investors measure their organization’s financial performance over time and identify areas where improvements can be made. It also provides an indication of the overall financial health of the business. By tracking this metric, business owners and investors can make better decisions to increase profits and maximize performance.

Industry Benchmarks

The average net profit margin for a handyman business is around 5%. However, this figure can vary depending on the size and scope of the company, as well as the industry in which it operates.

How to calculate

The NPM formula is:

Calculation example

For example, if a handyman business has net income of ,000 and total revenue of 0,000, its MNP would be:

Tips and tricks

• Track NPM over time to identify areas that are generating more/less profit.
• Compare NPM to industry benchmarks to gauge your company’s financial health.
• Use NPM to identify ways to reduce costs and increase profits.

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Repeat Customer Rate

Definition

Repeat customer rate is a key performance indicator (KPI) that measures the number of customers who return to a business to make repeat purchases. This metric helps companies identify their most loyal customers and measure their customer retention rate.

Benefits of Tracking

Tracking repeat customer rate is important for a DIY business because it helps business owners better understand their customer base, as well as identify any areas for improvement in customer service. By tracking this KPI, business owners can find out which customers are returning to their business and why. This information can then be used to improve customer service, build customer loyalty and increase customer retention.

Industry Benchmarks

The average repeat customer rate for a handyman business is usually around 20-25%. This rate can vary by industry, but it’s important for business owners to aim for a higher rate than the industry average in order to stay competitive.

How to calculate

To calculate the repeat customer rate, you need to divide the number of repeat customers by the total number of customers. The formula is:

Calculation example

For example, if you have 200 total customers and 50 of those customers have made repeat purchases, your repeat customer rate would be 25%.

Tips and Tricks for KPIs

• Encourage customers to sign up for a loyalty program to entice them to make repeat purchases.
• Send surveys to customers to identify areas for improvement.
• Offer special discounts or promotions to customers who make repeat purchases.
• Use customer data to identify customer trends and preferences.

Number of references

Definition

Referral count is a KPI (key performance indicator) that measures the number of times a client or customer has referred a DIY business to a third party. This KPI helps gauge the effectiveness of the company’s marketing efforts, as well as the level of satisfaction of their customers.

Benefits of Tracking

• Helps measure customer satisfaction.
• Provides insight into the effectiveness of marketing campaigns.
• Provides valuable data for decision making.

Industry Benchmarks

The average number of referrals for a handyman business can vary depending on the size and type of business. Generally, companies with larger customer bases tend to have higher referral rates. The average referral rate for do-it-yourself businesses is around 10-15%.

How to calculate

The formula for calculating the number of references is as follows:

Calculation example

For example, if a handyman business has 100 customers and 10 referrals, the number of referrals would be calculated as follows:

Tips and tricks to maximize the KPI

• Encourage customers to refer the business to friends and family.
• Offer referral incentives.
• Provide excellent customer service.
• Regularly ask for customer feedback.

Average time per service

Definition

Average time per service (ATPS) is a metric used to calculate the average time a handyman spends on a single service. This metric is essential for DIY businesses because it allows them to measure the effectiveness of their services, as well as to identify areas for improvement.

Benefits of Tracking

• It helps to measure the effectiveness of services.
• It helps to identify areas for improvement.
• It helps to plan future services.
• It helps to set realistic goals for future services.

Industry Benchmarks

The average time per service varies from industry to industry. Generally speaking, the benchmark for a do-it-yourself business is around 1.5 hours per service. This benchmark can be used as a comparison for business-to-do-it-yourself ATPS.

How to calculate

The formula for ATPS is:

Calculation example

For example, if a handyman company spends a total of 10 hours on all services in a month and completes 10 services in that month, the ATP would have 1 hour.

KPI Tips and Tricks

• Be sure to track time spent on each service separately.
• Identify areas of improvement that cause the ATPS to be higher than the industry benchmark.
• Set realistic goals for future services based on current ATPs.
• Be sure to consider any external factors (eg traffic) that may affect the ATPS.

Average amount billed per job

Definition

The average amount charged per job is a key performance indicator (KPI) for do-it-yourself businesses. It is calculated by dividing the total amount charged for a job by the number of jobs completed. This KPI gives an indication of the average amount the company earns per job.

Benefits of Tracking

Tracking the average amount charged per job provides insight into the overall financial performance of a handyman business. By monitoring this KPI, companies are able to identify areas for potential improvement in order to increase their profitability.

Industry Benchmarks

The average amount charged per job varies by type of job and size of business. However, the average for a handyman business is usually between 0 and 0.

How to calculate

The formula to calculate the average amount charged per job is:

Calculation example

For example, if a handyman business charged ,000 for 10 jobs, the average amount charged per job would be calculated as follows:

Tips and tricks

• It is important to accurately track the total amount billed and the number of jobs completed in order to accurately calculate the average amount billed per job.
• This KPI can be used to compare different types of jobs and identify opportunities for improvement.
• By tracking this KPI over time, companies can identify trends in customer spending and adjust their pricing accordingly.

Employee turnover rate

Definition

Employee turnover rate, also known as staff turnover rate, is a KPI metric used to measure the rate at which employees leave the company. This metric is expressed as the percentage of employees who left the company divided by the total employees employed over a period of time. It is also used to track the number of new hires made versus the number of employees who have left.

Benefits of Tracking

Tracking employee turnover is important for a variety of reasons. First, it gives business owners a clear understanding of how the business is doing in terms of employee retention. Second, it can help identify potential issues with how the business is run or run. Additionally, tracking turnover rate can help inform decisions on recruitment, training, and other HR-related activities.

Industry Benchmarks

The average employee turnover rate varies by industry. Generally, a turnover rate between 10 and 20% is considered average. However, a turnover rate above 20% should be watched closely as it could be an indication of underlying issues in the organization.

How to calculate

The employee turnover rate is calculated using the following formula:

Calculation example

For example, if a company had 10 employees at the start of the period and 5 employees during the period, the employee turnover rate would be calculated as follows:

Tips and tricks

• It’s important to track employee turnover over time so changes can be identified and addressed.
• It is also important to track employee turnover by department or job role to understand the reasons for any changes.
• Try to identify potential causes of high employee turnover and address them as soon as possible.
• Providing better employee benefits and incentives can help reduce employee turnover.

Conclusion

In conclusion, the seven main KPI measures of the KPI activity are the customer satisfaction rate, the net profit margin, the repeat customer rate, the number of referrals, the average time per service, the average amount charged per job and the employee turnover rate. These metrics are essential for monitoring and improving the success of a business and understanding your customer base. By tracking and calculating these metrics, business owners can gain insights that can be used to fine-tune their business and stay successful.