Millions of startups come up daily worldwide. While the business owners are generally armed with the best business ideas, only 10-20% of startups make it past their initial year in operation. These discouraging statistics have been primarily attributed to the lack of know-how among small business owners on how to run their companies and penetrate a highly competitive market. One of the fastest growing and highest earning ventures today is the cleaning service for residential and commercial properties.
Your best choice for success in this sector is partnering with a cleaning company franchise. The franchisor will give you important knowledge and techniques on how to run your business and boost your chances of success at market penetration since you will be using an already established brand. They will also offer training on how to handle your sales and the primary revenue metrics you should track to assess the growth of your cleaning company.
The following are the primary revenue metrics you should track:
Cost of Customer Acquisition
You should know how much your company is spending to attract clients on different marketing platforms vis-à-vis the clients and profits your marketing efforts and staff are actualizing. When you divide the numbers, you will get the average amount it costs you to get clients to invest in your company. This metric is called the ‘’CAC’’ or cost of customer acquisition. You should ensure that you will not spend a higher advertising amount compared to what you are getting from clients. Moreover, you can use this number to negotiate a lower price from a marketing agency to realize optimal profits.
Customer Lifetime Value
You should know how much value a client will add to your business in the long term through a metric called the customer lifetime value. This is computed using a predictive analysis or historical data coupled with behavioral indicators collected using customer relationship management software. Clients who sign five-year contracts, for instance, may give you higher profits compared to those who will sign a year’s contract.
Digital Funnel Metrics
Most marketing efforts are now focused on digital platforms. It is crucial to collect metrics at different stages of your sales funnel to know the areas that need revamping to boost your returns. You can, for instance, track the number of web visitors you will get from different social media platforms and how many of these will become paying customers.
This rate evaluates the percentage of clients that will stick with your company. In the cleaning business, keeping your retention rates at the highest level is essential. The calculation formula is quite complicated, but you can subtract the new customers from the total within a specified period. It is vital to know the reason for your clients leaving, if they do, to reduce these numbers.
Starting a cleaning company and making it grow is no easy feat. But with the above metrics and the know-how on their application in your business, this will be easier. This is a feat that can only be achieved with guidance from a seasoned investor, such as one that has grown enough to offer franchising opportunities and training for startups.