The Importance of Non-Financial KPIs
In the world of window and door installation, the well-known adage “If you can’t measure it, you can’t manage it” holds more truth than ever. While financial figures are critical, they don’t tell the whole story.
It’s easy to fall into the trap of focusing solely on financial numbers. However, financials are only the end result of many other factors at play in your business. Non-financial KPIs, particularly in sales and marketing, give you real-time insights into the health of your customer pipeline and the effectiveness of your business development strategies.
This article explores key sales and marketing KPIs that every installation business should monitor. It is by no means a complete list, but an essential starting point.
Key Sales & Marketing KPIs You Should Track
1. Marketing Cost of Sale Percentage
One of the most important KPIs to track is the percentage of your marketing spend relative to the sales it generates. Many business owners obsess over how much they spend on marketing, but the real question should be: How much revenue are you generating from that spend?
This KPI is calculated as:
Marketing Spend ÷ Sales Generated
For a healthy window and door installation business, marketing costs should typically account for 5-10% of total turnover. Less than 5% may indicate under-investment in lead generation, while more than 10% could signal inefficiencies. It’s also essential to track this by individual marketing channel (e.g., Google Ads, social media, local press) to see which platforms are most cost-effective.
2. Lead-to-Appointment Conversion Rate
Generating leads is only half the battle. Once leads are in the pipeline, how efficiently are you converting them into sales appointments? This metric measures the robustness of your appointment-setting process.
It is calculated as:
Number of Appointments ÷ Number of Leads
An industry benchmark would be converting at least 50% of leads into appointments. If you’re falling short, it may be time to review your lead-handling processes or adjust your approach to customer engagement.
3. Appointment-to-Sale Conversion Rate
This KPI measures your sales team’s ability to close deals after meeting potential customers. Tracking the conversion rate from appointment to sale gives you a clear indication of your sales effectiveness.
Orders ÷ Sales Appointments
Again, 50% conversion would be a reasonable benchmark/target.
By measuring the performance of individual salespeople, you can identify top performers and spot areas for improvement within your team. This metric also helps you understand how well your sales pitch and follow-up processes are working.
4. Average Order Value (AOV)
Another key metric is your Average Order Value (AOV) or Average Selling Price (ASP). This helps you understand the average revenue generated per sale and provides insights into upselling success or product mix trends.
Total Revenue ÷ Number of Orders
Tracking AOV by salesperson and product type can highlight areas where additional training or strategy adjustments are needed to maximise sales value.
Example Performance Report
To bring this all together, here’s an example of a monthly performance report using the KPIs discussed:
In this example, a total marketing spend of £8.7k generated 145 leads, 63 appointments, and 29 orders, resulting in £128k in sales – a marketing cost of sale of about 7%. A very acceptable result. But the reportalso immediately highlights differences in performance by channel – a logical conclusion for this company would be to invest more in SEO at 3% cost of sale and less in affiliate leads at 12% cost of sale.
Conclusion
Tracking sales and marketing KPIs is essential for the success of any installation business. By monitoring these key metrics, you can optimise your sales and marketing efforts, ensuring you’re not only generating leads but also converting them into profitable sales. In a competitive market, these KPIs provide the insights needed to drive growth and profitability, allowing you to stay ahead of the curve.
Do you actually know your cost of sale (by channel) right now?
Most installation businesses don’t. If you’re spending on SEO, PPC, and leads without knowing which is profitable, a free 20-minute call can change that.