Booking % = Revenue %

This is an interesting observation.

I've spend the last 12 hours digging through numbers and correlations between 15 different gutter and roofing companies.

What I found, simply put, is this:

For every 1% you increase your booking rate, overall revenue goes up 1%.

And for every 1% you decrease your booking rate, overall revenue goes down 1%.

Let me explain.

Booking rate is simply the percentage of your LEADS that you turn into ESTIMATES.

Estimates / Leads = Booking Rate

It's a useful metric every home service company should be tracking.

But I find most home service business owners don't spend much time obsessing over this metrics.

But it's worth obsessing over.

Let's look at some math.

Let's say you close 50% of the estimates you run.

And last month you had:

100 Leads

70 Estimates

35 Sales

4,000 Average Ticket

That puts you at 140,000 in Revenue.

Getting more leads costs money.

Getting a higher sales % is nice, but that's going to be hard.

But look at booking rate! If we can simply get that number from 70% to 90%:

Now you have 20 more estimates.

10 more sales.

40,000 more dollars.

40,000/140,000 = 28%

So for every 1% booking rate goes up, revenue goes up 1.4%.

10% booking rate increase, 14% revenue increase.

Obviously your average ticket is going to play into this, or lifetime customer value if you are in the repeat customer business.

But either way, the result is the same. Booking rate has a tremendous impact on revenue. More than most business owners realize.

So, it's not a missed call, or a form lead you forgot to call back, it's a $2,000 loss. If you think of it that way, maybe you're not hounding your staff enough!