During a winter event, a typical approach is “all hands on deck.” In the midst of all this activity, little if any effort is put toward data collection.
It’s clearly a secondary priority (after taking care of the customer). Still, snow professionals with reliable information at their disposal are better equipped to assess the profitability of their operations. They’re also able to plan during the off-season and make better decisions.
Let’s look at three broad areas of data you may collect: marketing, operations and finance.
Marketing
Now that the selling season for snow and ice contracts is over, it’s a good time to compile these results. Metrics include:
-Booked sales—total amount of contracts in terms of dollars (average winter) and total number of contracts.
-Average sale—total dollars divided by number of contracts.
-Proposals—total amount of proposals in terms of dollars (average winter) and total number of proposals.
-Average proposal—total dollars divided by number of contracts.
-Closing rate—booked sales volume divided by proposal values and the number booked sales divided by the number of proposals.
-Marketing expense—total cost of marketing for snow and ice, including sales efforts.
-Marketing efficiency—total booked sales divided by total marketing expense (could also be calculated for each specific initiative).
The benefits of collecting marketing data are many. One is to improve planning for next season’s sales and marketing goals and initiatives. Another is for accountability if these metrics are individualized. Another is to reward high levels of performance and to celebrate achievements.
Operations
Now that the season is here, it’s important to collect these data so they may be evaluated, whether evaluation occurs in real time or at a later date. The opportunity to collect operations data only exists during the season—right now. Don’t miss this chance. Metrics include:
-Productivity—total crew hours spent on a job site working divided by total crew hours paid.
-Efficiency—budgeted crew hours divided by the actual crew hours spent on a job site working.
-Dollars per hour—revenue for a route divided by total crew hours, including drive time.
-Incidents—number of accidents, injuries, thefts, etc.
-Attendance—number of employees reporting for work divided by number scheduled.
-Turnover—total number of terminated employees divided by total number of employees.
Every operational process has some amount of inefficiency or waste. When the lights are turned on, the waste becomes exposed and the bottom line improves.
Finance
For a snow and ice business, there are many financial data points that may be valuable. Here are a few:
-Gross profit by event; by service (plowing, sidewalk clearing, deicing, etc.); by customer (all properties of the same customer combined); by property; and by crew, area or manager.
-A/R as a percentage of sales.
-Labor costs as a percentage of sales.
-Material costs as a percentage of sales.
Financial data may be compared to last year, industry benchmarks, budgets or goals to assess performance. Having gross profit information available for an event, shortly after that event is valuable, as it allows managers to understand the overall financial results of the event. A low-profit event requires more detailed analysis compared to a high-profit event. When do you learn how profitable a certain event is, if ever? Most contractors never have this information. It’s nice to have after the season ends, but you can’t make adjustments at that point.
Balanced scorecard
A best practice is to develop a scorecard to report metrics most relevant to you. A balanced scorecard includes marketing, operational and financial metrics.
Scorecards are powerful tools because numbers don’t lie, as they say. Just because everyone feels good about your last snow event doesn’t mean it met your profit goals. Collecting and reporting information during the winter season will promote profitability, accountability and professionalism. Winter is here. Now go forth.
Free sample
For an Excel template of a balanced scorecard, email growth@mypmcteam.com
