Services Business KPIs: Measure What Matters Most

Metrics, how we love them and hate them. They’re necessary to track the performance and health of your business, yet they can become tedious and overwhelming. Everyone says not to track metrics you don’t need, but how are you supposed to know the most important ones for your business?

To cover the most critical parts of running our services company, we’ve narrowed it down to three main areas of concern that are most important to focus on: clients, people, and company. Then, we decide on a few critical metrics within those areas to track.

When it comes to KPIs, less is more, so you can focus on effectively tracking them over time and use them as a positive tool to run your business.

Clients: Did We Deliver What We Promised?

With clients, the most apparent metrics are finishing the project on time and within budget. Things might come up during the project that can affect both, but delivery and budget are generally good indicators of how well you supported your client.

Along the way, you need to provide a good customer experience. Clients want people who are easy to reach, provide updates on progress or setbacks, and offer consistent support during the process. It’s as much about keeping our promises as delighting the customers with a positive experience.

Now, you can outright ask your customers if they are delighted with you, but it could be uncomfortable. In that case, there are objective ways to know if a client is pleased with your performance:

1. Are they asking you to solve new problems?

2. Are they telling their friends about you?

3. Are they referenceable?

Clients are first in the metrics to track because every other aspect of your business depends on providing the best experience possible to continue building your client base and growing your company. A happy client will tell others and continue coming back with new problems for you to solve.

People: Are We Hiring and Retaining Skilled Employees?

Supporting clients is the core of a services business, but you can’t do it without the right people. The goal is to hire and retain people who are passionate about what they do and provide an excellent customer experience.

Key people metrics include:

1. Retention & Turnover

2. Employee Value & Performance

3. Training & Development

While these are solid indicators of the health of the work environment and your people, we think there’s another layer to the equation. People come to work to solve problems, learn, and teach. They need an environment where they can have various experiences, which keeps the job from feeling monotonous.

Lastly, checking in with your employees regularly is essential to see how they are doing. Is there something else they need from you? Do they want to try something new? Are they doing what they do best? Would they refer others to work there?

Building a relationship with your employees influences overall company health. You create a positive workplace when you build trust, show support, and create opportunities for their career. And when employees are happy, they give that same positive experience to your clients.

Company: Are We Meeting Organizational Goals?

Across the organization, traditional KPIs will always be extremely important to track. These are:

1. Revenue

2. Expenses

3. Margins/ Profit

4. Variance

5. Predictability

6. Accounts Payable

Now, these are usually used as lagging indicators. We look at the financials from last month and can’t change them after the fact.

However, if you have the right tools and systems in place that allow you to look into the future, these can become leading indicators. As they do, you can change them before they happen.

With the ability to look at the company KPIs in the future, you can better gauge the company's health and be prepared for anything.

How Clients, People, and Company Come Together

These three categories are best to focus your KPIs on because they are central to a services business. They also directly influence each other. The company's health depends on the health of the people and clients. The experience delivered to clients depends on the right employees. And we all know people perform better and are happier working in a positive environment.

Another factor is regularly looking at past, present, and future KPIs. You can’t look at these KPIs once a year and expect to influence them. Regularly tracking and working to support metrics is key to making them work. If you set up systems to check them daily or at least weekly, you’ll always be ahead of them.

Once you’re focused on only tracking the most critical KPIs, it will fuel your growth strategy now and in the future.