Data has always been important when it comes to driving business decisions, and the role it plays for modern pest control and field service businesses is more essential than ever. With innovative technology, specialized software and industry-specific mobile apps, PCOs have access to more data than ever before. The question is: which numbers should you be paying the most attention to?
To provide an insider’s perspective, PestPac by WorkWave was fortunate enough to host an expert panel at this year’s User Conference on not only which metrics they consider the most important but why they’re so crucial — as well as how to ensure your numbers are moving in the right direction. With real-world insight from Dave Bradford, CEO of Certus Pest; Mickey Thomas, Senior VP of Customer Care and Inside Sales at Arrow Exterminators; and Nathan Colby, COO of Colonial Lawn & Garden, this is one session that’s worth revisiting.
So, which metrics came in at the top of the list?
Value
Tracking the value of your business above all else can feel self-serving, but the reality is that growing businesses are healthy businesses. Companies prioritizing wealth maximization are able to provide employment and upward mobility in their communities. Additionally, maximizing revenue is essential for showcasing your business’s value and viability if you’re looking to be acquired.
When considering overall value, the panel was united in considering retention — both of employees and customers — key. As Colby notes, field service technicians generally aren’t considered to be true professionals until they’ve completed their first few years in the industry, and the added value of experience simply can’t be faked. Experience yields knowledge and skill, allowing more experienced employees to deliver on service quality and efficiency that can’t be attained nearly as effectively if you’re dealing with a high employee turnover rate. Veteran field employees not only run more independently but also record data better, ensuring continued insight and analysis.
Thomas expands on this, highlighting the importance of employee exit interviews in making adjustments over time. “We want to know ‘Why are they leaving?’ and have those indicators, where we understand, ‘We need to be better at this, because this is where our turnover is.’”
Net Margin
Beyond gross profit, tracking net profit — simply put, profits after costs — gives a true glimpse of overall business strength. This can cast a spotlight on what’s working, what isn’t and where businesses can make shifts to ensure maximum profitability. “We used those measurable items to put indicators around how many administrative staff we need to run [different branch] offices,” Thomas says.
Keeping customers on for as long as possible is key to maximizing net margin, as well. Repeat customers provide more cash flow, particularly over time; a customer that stays for two years before churning, for example, has a significantly lower ROI compared to one that stays for 10. Loyal customers also tend to buy more services in a given period, allowing your business to bring in more revenue while continuing to build a stronger relationship — ultimately improving overall retention rates, an important factor for potential buyers or investors.
Tracking net margin helps businesses remain competitive in an industry where customer retention and service quality play significant roles in long-term success. By analyzing net margin trends, companies can determine whether upselling additional services, implementing subscription-based pricing or focusing on higher-margin offerings will yield better financial results.
EBITDA
Unlike net margin, which accounts for all expenses, EBITDA focuses on core earnings by excluding financial and non-cash expenses. For pest control and other field service businesses, this can provide a way to assess how a company is doing in terms of generating profit from an operational standpoint independent of financing and accounting decisions.
EBITDA allows PCOs and field service owners to hone in on the impact of factors like labor costs, fuel expenses, or inefficiency in scheduling or routing — a crucial component in making data-driven decisions to improve overall profitability. It can also be an opportunity to identify — and reconcile — outstanding customer payments that are disrupting your cash flow. Consider providing customers with ways to store their payment information and update it automatically as a way to minimize delinquent payments, reduce unintentional customer churn and make your cash flow more predictable.
As your business grows, EBITDA only becomes more important — especially if you’re considering selling your business or looking for financial backing in the future. In addition to being a key financial metric for any business thanks to the role it plays in valuation, EBITDA is particularly important in field service where competition is fierce and cash flow can waver significantly with seasonal changes; a strong, and ideally growing, EBITDA shows your business is scalable and resilient.
Cost-per-Lead and Cost-per-Sale
Gauging the ROI of your marketing and customer acquisition efforts boils down to two key metrics: cost-per-lead (CPL) and cost-per-sale (CPS). By tracking CPL and CPS, you get a much more concrete perspective on how effective your marketing and sales efforts are. By A/B testing and tracking your marketing efforts across different areas — as well as efforts across both digital and print marketing — you can find the best place to focus your efforts. The result is not only a stronger CPL and CPS but also improved customer density.
These figures play into everyday business decisions, as well. “That number is important because when people are calling in and you’re giving them a refund or a discount, or maybe you do price increases and you want to roll it back, you want to know what the economic value is relative to finding a new customer,” says Bradford, noting that those figures have helped him determine that it takes a year, on average, to recoup the cost of acquiring a customer. “Every one of those customers that canceled in less than 12 months, I was more profitable if I never even had them as a customer.”
Collecting and analyzing data from across your business is the only way to attain a clear, objective view of how your field service business is performing, not only in the moment but over time and against the industry as a whole. Using PestPac’s valuation reports, PCOs can gain a deeper understanding of how their business stands and use that information to continue moving in the right direction, regardless of whether they have plans to sell.
By quantifying core business goals like value and growth, you can glean deeper insight into your business’s performance and discover exactly what you’re doing best, where you have room to improve, and, most importantly, what decisions you can make to continue driving your business forward. To learn more about how you can effectively track data and convert it into actionable next steps to drive the needle in the right direction, explore PestPac’s pest control reporting features and schedule a demo today!
