"You can't manage what you can't measure." How many times have you heard this?
We all know that being busy is not the same as being successful. And the sad truth is, you can book a lot of moves and hustle everyday without actually making a profit.
It can be tough to escape the daily grind and get really dialed into the health of the business. Then once you turn that corner, you realize EVERYTHING can be measured. So, what really matters? What are the most important metrics for a moving business?
Here's a shortlist of seven crucial KPIs (key performance indicators) all moving companies owners need to track if they want to grow.
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Speed to lead
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Lead conversion rate
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Average job size
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Profit margin
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On-time delivery rate
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Customer retention rate
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Claims ratio
Read on to learn how calculate and improve each KPI. Let's go!
1. Speed to lead
Speed to lead, also called response time, is the time it takes to respond to a potential customer who's provided information and expressed interest in your service.
This metric matters because conversion rates are typically higher when leads are contacted immediately.
How to calculate speed to lead
Look at time stamps to compare when leads come in vs. when they are contacted.
Speed to lead = Time a lead was contacted - Time a lead came in
For example, if a lead comes in at 9:00 am and your team contacts them at 9:05 am, your speed to lead is 5 minutes. Take data from a period of time (such as last month, last quarter, or year to date) and calculate your average.
How to improve speed to lead
With speed to lead you want to be as close to 0 as possible—and the clock starts the moment someone requests a quote.
Capturing leads from all sources in one location, like a dashboard, gives your team a big advantage. They can see every new lead come in and work from a single list, so nothing falls through the cracks.
Also, it's good practice to equip your team with email, phone, and SMS scripts so your first communication with customers is locked, loaded, and ready to send at the push of button.
Pro tip: In SmartMoving, leads that are less than 15 minutes old are tagged as "hot leads." This helps your sales team strike while the iron's hot.
2. Lead conversion rate
Lead conversion rate measures the percentage of leads that turn into booked jobs. This is a key metric for moving companies to see if their sales and marketing strategy is working well.
How to calculate lead conversion rate
Divide the number of leads converted into customers by the total number of leads, then multiply by 100.
Lead conversion rate = (Leads converted into customers / Total number of leads) X 100
For example, if you bring in 200 leads, and 50 of those become customers, your lead conversion rate is 25%.
How to improve lead conversion rate
Converting leads into customers depends on many things, including how quickly you respond (see speed to lead above), how often you follow up, and how well you overcome objections.
Here are a few stats to keep in mind:
- 78% of customers purchase from the vendor that responds first, even if they're more expensive
- 7 is the number of times a potential customer needs to see or hear your message before they buy.
The first thing to do is refine your sales process. Document exactly what you want to happen at each stage and strategies you use to move customers from one stage to the next. Building a rock solid sales process—and sticking to it—is the best way to boost your lead conversion rate.
After you do that, use automation to ensure immediate responses and timely follow-ups. Automation also makes it easy reach customers on all fronts—text, email, and phone.
Pro tip: Make it effortless for customers to book with you. Send professional, mobile-friendly estimates directly via text and close the deal with digital signatures.
3. Average job size
Average job size measures the typical revenue generated per moving job. Understanding this metric helps in forecasting revenue, planning resource allocation, and setting pricing strategies.
How to calculate average job size
Divide your total revenue by the number of jobs completed.
Average Job Size = Total Revenue / Number of jobs
For example, if you earn $50,000 from 100 jobs, your average job size is $500.
How to improve average job size
Increasing your average job size can be done in several ways:
- Upsell additional services
- Adjust marketing strategies to attract clients with larger moving needs
- Consider doing long-distance moves
Pro tip: SmartMoving offers tools and integrations to help you manage additional services like storage and maximize upsell opportunities like moving insurance.
4. Profit margin (gross and net)
Profit margins, both gross and net, are indicators of a moving company's financial health. Gross profit margin measures the difference between revenue and the cost of goods sold (COGS), reflecting the efficiency of the business.
Net profit margin, on the other hand, takes into account all expenses and provides a more comprehensive view of a company's profitability.
You're in business to make money, so for gross and profit margins, the higher the better. According to 7 Figure Moving Academy, most moving companies profit about 10%. If you can reach 20%, you've hit the gold standard.
How to calculate gross profit margin
Subtract the COGS from your total revenue, then divide by total revenue.
Gross profit = (Total revenue - COGS) / Total revenue
How to calculate net profit margin
Subtract all expenses from your total revenue, then divide by total revenue.
Net profit margin = (Total revenue - Total expenses) / Total Revenue
How to improve profit margin
Maximizing profit margins involves optimizing operations, controlling costs, and increasing revenue streams.
It's about finding the right balance between providing high-quality service and managing expenses. Do everything you can to reduce waste and run the business efficiently. Then, look for ways to generate new revenue through referral networks like realtors or upsell opportunities like moving insurance.
Pro tip: Make sure you know where you're winning and where you're losing. Run reports on marketing ROI, sales performance, lost leads, job revenue, and additional services sold—to name a few.
5. On-time delivery rate
On-time delivery rate shows how often moves are completed on time. It reflects a moving company's reliability and efficiency.
This metric is important to customer satisfaction. If you get everything right but don’t follow through with timely delivery, it’s still a bad move. When you stick to your schedule and your word, customers are happy and more likely to refer you.
How to calculate on-time delivery rate
Divide the number of moves completed on time by the total number of moves, then multiply by 100.
On-time delivery rate = (Moves completed on time / Total number of moves) X 100
For example, if you complete 100 moves and 95 were completed on time, your on-time delivery rate is 95%.
How to improve on-time delivery rate
To improve on-time delivery rate, you need to ensure timely dispatch and maintain open communication with clients.
Sometimes things just happen. Flat tires, family emergencies, the world is full of unknowns. The key is to control what you can control, such as:
- Regular maintenance of vehicles to avoid breakdowns
- Training staff to handle unexpected challenges and how to communicate with customers about delays
- Giving as much notice as possible to customers who will be affected by any schedule changes
Pro tip: Manage all your resources on one real-time calendar to avoid overbooking and maximize your schedule.
6. Customer retention rate
Customer retention rate measures the percentage of customers who return or continue to use their services. High retention rates are often linked to customer loyalty, satisfaction, and the effectiveness of after-service follow-up.
How to calculate customer retention rate
Divide the number of repeat customers by the total number of customers, then multiply by 100
Customer retention rate = (Number of repeat customers / Total number of customers) X 100
For example, if you have 100 customers and 20 of them are repeat customers, your retention rate is 20%.
How to improve customer retention rate
Improving customer retention involves providing exceptional service, maintaining ongoing communication, and addressing customer feedback effectively.
SOPs (standard operating procedures) are key if you want to consistently deliver a high-quality moving experience. Start by gathering whatever documented processes you have, then use a tool like Trainual to organize SOPs in a centralized system.
Then, make sure you're delivering. Ask for feedback from customers immediately after a move is complete—"How'd we do today?"—and provide a QR code to make it easy. If you don't get feedback right away, follow up the next day and one week later.
Pro tip: When you get positive feedback, invite customers to leave a review on Google, Facebook, or Yelp. When you get negative feedback, respond ASAP to discuss the issue and offer a solution.
7. Claims ratio
Claims ratio is the proportion of moves that result in claims for damage or loss. A lower claims ratio means higher service quality, leading to enhanced customer trust and a positive reputation.
How to calculate claims ratio
Divide the number of claims made by the total number of moves completed, then multiply by 100.
Claims ratio = (Claims made / Total number of moves) X 100
For example, if you complete 100 moves and receive 5 claims, your claims ratio would be 5%. You want this metric to trend down. So, take your current claims ratio and set a goal, such as, reduce by 2% next quarter.
How to improve claims ratio
Improving your claims ratio requires planning, staff training, and quality control.
If you move enough people, some claims are unavoidable. However, implementing (and enforcing) rigorous packing and handling protocols can significantly reduce the risk of damage.
Pro tip: SmartMoving provides real-time reports so you can keep eyes on all aspects of your business, including claims, refunds, crew ratings and more.
Know your numbers
Understanding and optimizing these KPIs will unlock new growth for your moving business. Use the formulas above to keep tabs on your most important metrics. Or if running calculations isn't your thing, SmartMoving does it all for you, so you can fix issues, find opportunities, and focus on running a profitable moving company.
