Residential Metal Roofing Executive Report Marketing, Lead Generation, In-Home Sales, Installation, Referral Maximization

Knowing Your Numbers

Issue #33 | July 29, 2015 | Seth Heckaman

I hope this finds each of you well!

We have been discussing the hallmarks of a successful metal roofing contractor and the importance of systematizing our businesses. In this issue of the Residential Metal Roofing Executive Report, we would like to continue that conversation and discuss how knowing and tracking our numbers can directly determine the success, or failure, of our businesses.

Over our 35 years of partnering with home improvement companies of all sizes and scopes, we have fortunately (and unfortunately) had the opportunity to learn from companies as they experience both spectacular success and spectacular failure. So many factors determine the success or failure of a business – integrity, quality, market conditions, etc. – but we have found one theme to be constant: companies that fail to intimately know the numbers of their business lose their ability to sense conditions requiring adjustments and adaptations and eventually compromise their success.

Few principles are as widely accepted as the axiom, “you can’t manage what you can’t measure,” and we have found it to hold true time and time again. In every area our businesses – marketing, sales, production, accounting, etc. – we require the necessary information to properly manage and ensure the success of our organizations. Without establishing metrics to measure all relevant components, we are flying blind and making decisions from partial information, as opposed to having metrics to understand our profitability, know the demo and close rates of our salespeople, track the conversation rate of our website, and more, so as to make decisions accordingly.

The importance of measuring and tracking our numbers truly does extend to every area of our businesses. We have seen many organizations cease to exist from failure to track their marketing costs. For too many organizations, standard procedure is to spend money until the required leads are generated. Sophisticated and sustainable organizations are diligent to track where each lead originates and the marketing costs associated with that lead, then measuring total marketing costs as a percentage of gross revenue. This prevents them from spending marketing dollars on poor lead generators and also knowing if their marketing costs are eating too great of a percentage of their business.

Measuring website performance is also critical: conversion rate, bounce rate, time on the site, number of pages visited, highest converting web forms, and more. If you are running a Pay-Per-Click or other SEM campaign, constantly tracking your click-through rate, cost per click, and conversation rate will ensure you do not max out your budget without generating a single lead – as we have seen all too often!

This also extends to your call center and appointment setting process. Tracking time on the phone and set rate will allow you to properly evaluate the effectiveness of your script and call center. Tying set rates to the lead source gives you another metric to measure the effectiveness of your marketing efforts. I talked to a new manager of a residential metal roofing company last week who found that the previous manager advertised in print publications that generated raw leads but the leads were set at an extremely low rate and closed at an even lower one. The previous manager did not have the numbers to see he was wasting thousands and thousands of dollars a month!

We are constantly preaching the benefits of a systematized sales process, but, without numbers, we could never measure the effectiveness of our system and salespeople and make changes accordingly. By measuring the demo rate, closing rate, net sales per lead issued, and total number of appointments per salesperson, we will know when and where management is required.

A few months ago, a business owner I respect explained how their organization changed dramatically when they began costing and evaluating every project – every single project. This gives them the opportunity to evaluate their measuring and pricing system, crew’s time and materials efficiency, and the profitability of each of their product offerings. By costing each project, they are able to constantly evaluate and track overall profitability. They have determined the gross profit required to run a sustainable organization and measure each project to that requirement. If a project fell below expected profitability, they then dig as deep as necessary to determine where the project went awry and how to best prevent it from happening again. With this system, pricing is not dictated by the market and profitability is no longer something hoped for, but rather, they understand what their business requires and use the numbers to continuously track their performance.

These are only a few examples of the valuable metrics and numbers we can use to track and manage our businesses. This principle of tracking numbers and utilizing the information, in our experience, separates the good companies from the great ones. If you have additional insight or would like more examples of what we have learned from great companies, please do not hesitate to contact me via email or either of the phone numbers below.

Thank you for being here and participating in this conversation. As always, please do not hesitate to let me know how we could be serving you.

todd Miller

has spent his entire career in the metal building products manufacturing industry. He is president of Isaiah Industries, an organization recognized as one of the world’s leading metal roofing manufacturers. Todd is currently Vice President of the MRA (Metal Roofing Association) and a Past Chair of MCA (Metal Construction Association). Through his website, he strives to raise the bar on standards and practices to provide property owners with the best possible products for successful roofing projects.

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