7 Ways to Use Big Data in the Roofing Industry

Original article appeared August 2014 on RoofingContractor.com

You may not realize it, but you already have big data on your business. Put it to work for you. 

The biggest buzzword in technology today is “big data.” What does it mean, why is it important and why is everyone talking about it? In this article, we will answer those questions and explore how big data can help you make good roofing decisions. You may not realize it, but you already have big data on your business. Let’s discuss how to put it to work for you.

Big data is nothing more than a collection of records. It can be a collection list, a list of past customers, accounting numbers, timesheets, or any list with similar fields.

The key to big data is how it is used. The reason there is such a buzz about big data is because most people who have access to it are too far removed from business operations to utilize it constructively. Billions are spent every year helping business professionals gain insight into their operations. However, most of that money is wasted because the executives spending it don’t know how to use the results to improve their processes, grow sales, increase customer satisfaction and expand the bottom line. Since you are on the front line, learning insights through validation will provide immediate ideas and help with implementation.

Here are seven examples of areas where you can start using big data immediately:

1. Managing Salespeople:

Your company is doing very well in its marketing and advertising efforts. Entering the busy season, your sales team starts running into issues keeping up with all the leads the company is receiving. Your immediate reaction might be to hire another salesperson, but that’s a $100,000 investment, and you hate the thought of burned leads during the new salesperson’s training period. There has to be another option. Look to big data for help to quantify options. Start by calculating how many leads come from each zip code. Balance out the zip codes so each salesperson has a similar number of leads to run. Use “heat maps” to visually compare the number of leads in each area, and then combine the areas together to create sales territories. By keeping salespeople in relative areas with balanced demand, you will gain efficiency, cut costs, put off hiring another salesperson and keep response times down. Best of all, your existing sales team will enjoy less time staring through their truck’s windshield and the higher win rates.

2. Ad Spending:

Is your advertising money really being used in the best way possible? Are you sure? How do you know? Big data takes the guesswork out of the equation. Start by tracking all leads that come into the company by asking customers how they heard about you. Next, take the breakdown and compare it two ways: (1) cost of advertising by sales volume, and (2) cost of advertising by margin. You may learn that the billboard nets the low-priced shoppers that you rarely win. It’s possible that your best leads are from past customers and referrals, which you don’t advertise for at all and could stand to gain a great deal if you started a program to foster them. Most importantly, you could start saving money immediately by pulling money from programs that only deliver “blue sky,” general brand sentiment, and put it in proven vehicles that deliver real jobs with higher margins.

3. Picking the Best Supplier:

Strong relationships and good pricing are not the only criteria for picking a good supplier. Consider letting big data help. How much is your supplier costing you? It’s an interesting question, for sure. Look to the data and answer these questions: How many times does the supplier fail to deliver on time, leaving your crew stuck on the job without materials to work with? How much have you overpaid because deliveries were short? Is your supplier’s main material price attractive, but accessories their true source of profit? Are you getting the payment term discounts they touted, or is the 2 percent back only on a few items? How many driveways, mailboxes and lampposts have you replaced thanks to your supplier’s delivery trucks? These are all questions big data can answer. My suggestion is to arm yourself with the numbers and facts, then shop the market with the knowledge.

4. Happy Customers:

Are your customers really happy with your service? How do you know? Is your team really delivering a great customer experience, as my friend and speaker at the Best of Success conference, Rod Menzel, always speaks about? Are you sure? My suggestion is to start gathering data so you have the proof to support it. Add points to each answer and use the score to gauge the customer’s true impression of your company. Then compare the data and look for contrasts between salespeople, crews, roof systems and profit. This valuable information will help steer your business in the right direction using facts, not feelings. Since companies are typically divided into two divisions — sales and operations — I suggest asking for customer input at two different times.

First, once the estimate is given, ask how the salesperson performed. Keep the survey simple and easy to complete. Does the customer remember the salesperson’s name? Were they on time? Did they deliver the proposal during the appointment? Did they answer all the customer’s questions? And finally, would the customer like a follow-up visit or any samples?
Second, after the job is completed, ask the customer if the execution matched what the salesperson promised. Did the crew clean up better than before they arrived? Did the supervisor keep the customer informed throughout the entire job process? Would the customer recommend your company to their friends and family? These are all hard-hitting questions, but they are designed to drag out true sentiment.

5. Gamification:

This is the art of assigning points to activities to quantify performance, in essence turning work into a game. Gamification is an up-and-coming concept that is starting to gain real traction because it can really engage workers and bring out their competitive spirit. Here are a few examples:

  • When entering a lead into your CRM system, give points for the number of fields filled in and weigh the more important fields, like the customer’s email address, more heavily to encourage good phone skills.
  • Grant points, based on job size, for completing a project early or coming in under budget. Tie this to a bonus structure to reward the operations team responsible for the project.
  • If you are entering a new market or pushing a new product line, give points to the salespeople who sell in the new arena. Points easily equate to commission, so make a contest out of it. Remember, it’s all about the game.
  • Here’s something we are going to discuss in detail next month: lead scoring based on a potential customer’s online activity.

6. Controlling Costs:

We already discussed ways of analyzing the costs associated with your suppliers, sales leads and advertising. Let’s look at a few more examples.

  • Fuel: Replacing vehicles with a more fuel-efficient model may offset the higher vehicle payment and result in lower maintenance costs.
  • Labor: By analyzing hours worked vs. dollars produced, you can identify and eliminate non-productive employees, unprofitable systems and poorly performing crews.

7. Business Intelligence:

Business intelligence (BI) is the method of turning raw data into actionable strategy. Remember, “You cannot manage what you cannot measure.” There are many software programs that can help automate and chart BI. Or, it could be done by hand, looking through the data manually. We will discuss the software programs available in detailed upcoming articles along with how to use them. For now, these are the two most important parts of BI:

  • Key Performance Indicators (KPI): Basically these are a set of goals that are established and then used to gauge accomplishments.
  • Predictive Analytics: This is the use of past historical performance to plan for the future.

The next wave of big data is “thick data” — applying big data performance in the real world and comparing results quantitatively. Derived from the concept of Genchi Genbutsu, a Japanese term meaning “go see for yourself,” thick data gauges how well the use of big data helped you conquer objectives.

This month’s homework is to pick one of the seven ideas and implement it in your business. To get the most bang for your efforts, look for the low-hanging fruit. If you would like to chat about anything written here or have questions about big data, feel free to contact me and I can help get you pointed in the right direction.