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Focusing onretention can help you increase client retention and profitability.
If you’ve learnedanything over the course of this blog series from Kwantek and TEAMSoftware, it should be the importance of retention when itcomes to your janitorial or security business’ profitability. When you’re facedwith so many things you can’t control gaining visibility into something you caninfluence, like retention, is a game-changer.
Over the past severalweeks, we’ve covered everything from the basics of determining costper hire and the difference between retentionand turnover, to looking at how you incentivizeyour site managers in relation toretention. In this post, we are taking a deeper look at the retention-relatedmetrics you should use to evaluate your site managers to grow your bottom lineand improve customer satisfaction.
Site ManagersCan Make (or Break) Your Business
Site managers arecritical to the success of any organization in the janitorial and security industries.Therefore, how you determine the effectiveness of those site managers issomething you need to spend some time truly evaluating. But, if your evaluation method is flawed, the resulting data willbe flawed, too.
You can spend yearstrying to build your business around a certain model, but if it’s not one thatachieves a result that can help you scale your business, it’s not valuable. Ask yourself: if you’re evaluating your site managers solely oncontract profitability (site revenue minus payroll costs), is that the bestlong-term strategy?
Increase Your Customer Retention to Increase Profitability
We’re not saying that site-level profitability isn’t important, but you may need to factor in other metrics as well to help you move the needle on the bottom line. If you’re looking to scale your business, you need to look beyond that one measure. We believe it can boil down to one simple question: What’s the most effective way to retain your clients?
Client retention is aboutmaking sure you’re delivering on your customer contracts and keeping yourcustomers (and employees) happy. Happy employees serve your customers better –and they tend to stay longer. So, retaining your workforce allows the sitemanager to place a greater focus on making sure your customers are satisfied becausethey can spend less time on onboarding and training new employees. And, yourbusiness can spend less time and money on hiring.
Two Retention Metrics to Evaluate Your Site Managers
Here are twoeasy-to-determine metrics to guide you along the way in evaluating site-managereffectiveness.
Metric #1: What Percentage of Their Employees Have Been with them 1+ Years?
This is a number youshould know for all your site managers as well as your entire company. Simplyput, this is a measure of the stability of a site manager’s workforce.
Metric #2: Number of Hires Needed Per Active Employee
This metric will showyou where you’re bleeding recruiting, hiring and administrative resources. Look at how many hires managers made in a set time period. Now divide that by their average number of active employees duringthat same period.
While not everymanager is going to be responsible for the same number of employees, thismetric standardizes your evaluation. This metric also shows you which clients couldbe most at risk. If the number is high, there’s a strong likelihood the clientcould be getting frustrated with the constant turnover and/or quality of work.
The Power of Accurate Retention Data
These are two of themost powerful data points you can monitor when it comes to your site managers. They’lltell you which managers should be rewarded, and which should be reviewed. Theycan help determine where your profits are most likely coming from and wherethey’re being sucked away. And, they’ll indicate which clients are likely to behappy versus which clients are likely to be dissatisfied.
If you don’t pay attention tothese retention metrics, it can impact your bottom line, customer satisfactionand site profitability. When you use a holistic software solution withworkforce and operations data in one system, it’s much easier to get to theseand other business metrics and keep an eye on them.
Now that you better understand your retention, it’s time to use it as a key point in your marketing collateral to increase sales and grow your business. In our final blog in the series co-presented by Kwantek and TEAM Software, we’ll talk about how to use retention as a key competitive advantage as you present your services to prospects. If you’re looking for even more insight into how you can use retention metrics to grow your business, check out the recording of our exclusive webinar with subject matter experts from Kwantek and TEAM Software.
Other posts in this series can be found below:
