Build Your Contracting Business By Tracking These 3 Basic Metrics
As cold as it gets in these parts, January is still one of my favorite months of the year.
It feels like the slate has been wiped clean and we all get a do over. With a fresh start, we can focus on how to better ourselves, and our business, in the coming year.
I’ve recently heard a phrase again that I know to be true, and it is this: What gets measured gets improved. It is no secret that we all need to consistently track what is going on in our business to improve. The problem is, there are so many things we could track that we don’t know where to start and wind up not tracking anything.
The key is to decide what to track and how often to track it and the new year is a great time to get back to the basics.
Three fundamental metrics to track monthly to improve your business in 2016:
- Number of Project Leads
- Project Leads to Sales Meetings
- Sales Meetings to Signed Projects
1. Number of Project Leads:
Tracking your project leads per month is as simple as totaling the amount of times you have the chance to discuss the potential of doing new business. This can come from past clients, someone new that has contacted you with a potential project, a referral that came from your network, or a tip about an upcoming project.
This is where success can simply be a matter of numbers. The more opportunities you have, the higher the chances of your success.
Tracking how many new leads you are earning each month tells you, in no uncertain terms, how healthy your business is going forward. When this number dips, your business dips, or at least is at risk to take a dip in the near future.
2. Project Leads to Sales Meetings
This is the metric that will tell you how effective your business development efforts are at delivering you the right type of clients.
Having a high volume of projects leads is desirable but it really pays off when they are qualified project leads. Qualifying your clients, and not rushing blindly to every opportunity that comes your way, is critical if you value your time. If a high percentage of project leads that you attract are highly qualified, and result in you scheduling a sales meeting, then you are on solid ground because qualified clients have a higher chance of becoming customers.
A high “project lead to sales meeting” ratio lets you know the people you should be working with are finding you.
3. Sales Meetings to Signed Projects
Consider this your conversion metric and it is where the rubber meets the road.
The percentage of sales meetings you can convert into signed project contracts (and granted this may happen over more than one meeting) says a lot about your ability to convey the value you bring to the table. In other words, your ability to demonstrate why an interested party should choose you to deliver their project instead of your competition. It might also reveal your level of performance in sales meetings.
It is necessary to perform well in this metric to stay viable as a business.
Success in all three metrics means a healthy project pipeline.
I could argue that a high percentage in the the third metric is the most important, but the truth is they are all critical and interrelated.
Quite often improvement is as simple as giving our attention to the thing that needs improving.
By committing to track, and improve, these three basic metrics every month, your business is sure to grow towards its potential. And growing your business to its potential is something that has to happen because there are people out there who need your quality services.
You might also be interested in: Three Powerful Actions Contractors Should Take to Put Their New Websites to Work
About the Author: Wayne Lamarre is a construction marketing expert, speaker, and business development consultant, who specializes in helping contractors go from good to great. Contact Wayne to add fuel to your construction business.
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