How Do You Stack Up When Compared to Other Service Businesses Like Yours?

What is a Company Benchmark Report?

A “benchmark,” Kawasaki says, is a business term that means comparing one thing to another, “and that other thing of comparison is usually some standard or excel or goal you're trying to hit or meet.”

Everyday life is filled with benchmarks, she points out. One example might be the average miles per gallon of gasoline certain vehicles use, and the fuel efficiency you seek when purchasing a new one. Or maybe you like to play golf and you set certain par benchmarks to improve your game. At ServiceTitan, the goal is always to help contractors operate their businesses better.

“The Company Benchmark Report does that by taking data, anonymizing it, then aggregating it together to find some hidden jewels and nuggets in directions that we think will help our customers,” Kawasaki says. “Benchmarking is a great way for you to know how well you're doing.”

Anonymization is a data processing technique that removes or modifies personally identifiable information, so the Company Benchmark Report shows how your company compares to others in the same region, in the same trade, and with a similar number of technicians — but without identifying any competitor by name or location.

With over 30 years in the analytics industry, Kawasaki — also known as “Data Deanna” to her work colleagues — easily spots trends and patterns in data. She has talked to contractors who think they’re doing really well, but not so much when compared to their competitors, as well as contractors who think they’re underperforming, but show above average growth when compared to competitors.

“There may be things you think you're doing really well, but you could be doing better,” she says. Or, “You think you're not doing well, but actually when you look at your peer customers, you're actually doing really well. So, keep doing what you're doing and let's figure out how to help you more."

What the Company Benchmark Report Means for Contractors

To offer customers a Company Benchmark Report, ServiceTitan first needed to hire a data science team to categorize the data using machine-learning algorithms that sorted and analyzed the information by trade, by service, install, or maintenance, by residential or commercial, and by region. 

Howard and Hunter helped by reading company invoices and determining whether the service related to HVAC, plumbing, electrical, and more. The team focused on key performance indicators for technicians where “we have relatively strong data with relatively high confidence,” Howard says.

“Now, the data is not perfect yet, but we’re up to 98% accuracy,” Howard explains. “The Benchmark Report kind of tells you where you’re at.”

For lower-performing companies, the Benchmark Report simply provides an opportunity for growth. 

“‘Hey, did I grow as fast as my region? What about my prices? Are they below or higher than average?’ These kinds of things,” Howard says. “The reality is, as a contractor, I want to know if I need a kick in the pants to say, ‘Hey, I should be growing faster. I'm not really putting pedal to the metal.’ I want to know where I'm at.”

The Benchmark Report for Howard’s company, Lee’s Air, for instance, might show a really high average ticket on install services, but a “terrible” average ticket for maintenance services. 

“So, it's not just how the company as a whole is performing. But what pieces of my company should be performing better?” Howard says.

Howard adds that the report for Lee’s Air lists the company as average for 2020 completed revenue compared to similar businesses in the area, but then 2021 completed revenue falls in the bottom 25% — even though Howard notes Lee’s Air increased revenue from $3.43 million to $3.675 million in 2021.

Therein lies the beauty of the Company Benchmark Report, Hunter says. If you grew 7.1% in one year and beat last year’s target goal, you might think you had a killer year. Once you get your Company Benchmark Report and see the industry as a whole grew by 25% on average, then you know you have work to do.

“What it tells me is I'm not keeping up with the pace of what my competitors and everybody's doing,” Hunter explains. “So, I need to really dive in and figure out what's going on and get a plan to make sure I can outpace what others are doing as well. Not just settle for what I think was pretty good at 7.1%.”

On the other hand, a company may see a 28% above average overall growth rate and higher revenue per technician, but only an average growth rate for service. That might mean you just need to look at your business mix.

“We found out that if we did one install, it produced the same gross profit dollars as doing a whole week of service work,” Hunter says. “So when we're thinking about that, I'm like, ‘Oh wow. Would we rather do one install or bust our tail all week doing service for the same gross profit dollars?’ Therefore when the busy season came, I didn't care what it took, we were going to prioritize all the highest-dollar installs and make sure we were getting all those first.” 

Company Benchmark Report Highlights Areas for Improvement

If you find your company ranks in the bottom 25%, dig in to determine your limiting factors: 

• Did you purchase enough trucks? 

• Did you hire enough technicians? 

• Did you adjust pricing as needed throughout the year? 

• Did you spend enough on marketing to attract more jobs? 

• Is it a combination of all of the above? 

Your data compared to others provides some answers.

And to be clear, Kawasaki says the ServiceTitan Company Benchmark Report classifies your company’s size based on your region and the number of technicians you employ, and not on the dollar amount of revenue your company earns in a year.

“For those of you who are used to seeing dollars being the volume, it is not the dollars,” Kawasaki says. “It is the technicians, the type of business, the location that you're in, all these things together that help make what would be a business like yours.”

The Benchmark Report also compares multi-trade companies to others with a similar mix and make-up, Howard says. And if you see something wonky in your Benchmark Report, share your feedback with ServiceTitan to see whether adjustments can be made.

Rather than shirk off the competition by simply thinking “they’re in a different area,” or “our climate is different,” or “we don’t do it this way,” Hunter suggests using your Company Benchmark Report to encourage some healthy competition.

“I would use this report, share it with my team, and get them to see, ‘Oh wow, look, here's where we're at. Here's where the best of the best are. Let's see what we can do to get there.’ And use it as a motivation factor to get your whole team involved in making your company better,” Hunter says.

Howard says the Company Benchmark Report is just “scratching the surface” for what Titan Intelligence can help contractors do.

“In the future, as we go forward, we will be able to start drilling down into more detailed views of this data,” he says. “If we help you grow and you get more profitable, and you can buy more trucks and hire more techs, we grow when you grow. And it's way cheaper that way for us. Way, way, way cheaper. Let's keep iterating on this and making it better.”