It’s become an accepted truism among economists and high-end business consultants: what you measure is what you get (see HBR Column: You are what you measure). It may sound complicated, but it’s not; the core concept is that your employees will do more of whatever you measure in terms of performance (especially if there are $-related consequences!), and less of whatever you don’t. So – what are you measuring in your business? And are you sure you’re measuring the right thing?
Since this is an article about growing your business, let’s focus on sales. In the construction industry, there are two major things you’d probably like to get out of your salesmen/estimators: (1) high job volume; (2) high job profitability.
We see a lot of firms that pay salesmen/estimators based on dollar value of jobs sold. That’s OK as far as it goes – it’s certainly nice to get more work. But is it profitable work? Some of our customers get around this question by having the boss approve every estimate that goes out the door. Again, that’s fine, except that you’re going to have a hard time growing if you have the sort of bottleneck in place (unless you’re only bidding $1,000,000+ jobs – in which case, you may want to switch to a different blog post!). If you have good people and good systems in place to measure their performance, you’ll find that you’ll get more out of them AND set yourself up for more rapid growth if you empower them.
We would strongly recommend incentivizing your salesmen and estimators based on profitable work brought to the company. If profit isn’t part of the equation, you’re leaving out a critical part! “But hey – my salesman can’t control how the guys in the field do. That’s not fair to them!” This sounds reasonable, but it’s wrong. A great salesman or estimator knows the Company’s crews – and takes the full picture into consideration when he estimates.
So, have we convinced you yet? Wondering where to start? Try the Knowify sales report. With this report, you can very easily determine who your top performing sales people are. Given the natural fluctuations in things, you can also use the report to see overall bidding volume (including unsuccessful bids), which GCs are notorious time-wasters, and more. All-in-all, the Knowify Sales Report is a great tool you can use to incentivize your sales team and start growing your business the right way.
Lastly, let’s look at this quickly from the salesman’s perspective. Why is Knowify a great system for him? Easy – we make it really easy for him to go back and check old jobs and past bids to see which ones were successful and which ones weren’t, and among the successful bids which ones ultimately proved highly profitable and which ones didn’t. So Knowify not only makes them more efficient, it also helps them get better over time. And once you start measuring (and paying!) them to deliver more profitable work, Knowify will prove to be an invaluable asset to them as they push to deliver on those metrics.