“He might say, ‘Don’t worry. I have two jobs that are 90 percent of the way, and I’m just waiting for a molding on a third one,’” John said. “So he knows the shop isn’t really behind. But that builds accountability based on data.”
Use KPIs to manage insurer relationships. John told me he recalls a time a certain large insurer came to him with “their numbers” and concerns about “performance.” John said he brought his dashboard of live KPIs up on the computer screen and told them, “Let’s compare numbers because I know mine are right.”
“From that point on, most insurance companies would ask us, ‘What are your numbers telling you,’” John said. “Because they knew we had them daily. Back then, they had to wait until the end of the month for some of their reports.”
Whenever the company was going to enter into a new relationship with an insurer, John said, he would ask what key measurements the insurer planned to use to gauge performance.
“We would build a model for that insurer’s claims based on their KPIs,” John said. “When they came in for a review, we would show them our numbers. If we were struggling in an area, we could say up front that we knew it, and point to all the things we were doing to try to change it. We would have the data, so it allowed us to get ahead of them.”
Use KPIs to help you finance your growth. “The biggest value I had with my KPIs was when I sat down with my bank,” John said. “Whenever I wanted to expand or buy additional locations or equipment, I could show them exactly what we track during the course of each day. Usually they would be blown away.”
When a lender is impressed with your KPIs, John said, you’re likely to find that a potential buyer is as well.
“If it works with your bank, you could probably make an appointment with the consolidators,” he said, laughing.
I’ll share a few more of John’s insights into effective use of KPIs in my next column.