Tracking KPIs can foster increased success for spa retailers
When Amanda Annis started working full-time at Ohio Pools & Spas seven years ago, she didn’t have any formal business education or training — and didn’t have the time, money or desire to go back to school. Instead, she took advantage of her local Small Business Development Center. Annis took part in a free three-hour class on how to start, run and grow a business. She says that it was this one-on-one consultation that helped her create a formal business plan and compile projections.
“This experience gave me the guidance, support and education I needed in a very short amount of time, and at no cost to me or the business,” says Annis, who is now the third-generation owner of Ohio Pools & Spas, which has two locations in the state, one in North Canton and another in Mayfield Heights. “This empowered me to know where we were at and set realistic goals for where we wanted to go as a business. KPIs (key performance indicators) are the answer to knowing where you are at, where you want to go and give you the road map for how to get there.”
Annis tracks KPIs regularly through the company’s Evosus (business management and POP software made for the hot tub and pool industries) database, which it uses to run sales reports and manage accounting. Annis uses the Money Tree tool in Evosus that shows comparisons and reports of booked, delivered and invoiced sales by revenue and units.
Every day, she looks at units sold for hot tubs, swim spas and saunas. Weekly she checks overall revenue, sales and year-over-year numbers; biweekly, she examines balance sheets and profit/loss statements. Then she does it all again monthly, quarterly and annually to compare.
She also tracks foot traffic in the showroom, and digital traffic to the website and social media. She isn’t yet examining revenue per square foot — but recognizes she should be.
“Knowing our KPIs is everything,” Annis says. “My dad used to tell me, ‘Gather all your information, and the decision is already made.’ … Once I know all my numbers, it’s easy to make business decisions in alignment with our values, and then we start and keep realizing our goals.”
Mountain Hot Tub in Bozeman, Montana, tracks daily and weekly KPIs for strategic planning, but also for an employee incentive program that has boosted sales, says General Manager Max Blaser.
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“If an employee is not certain how their work can positively affect both their individual earnings and the company as a whole, it’s hard for them to understand how best to direct their effort and energy,” Blaser says. “By making it very clear what indicators reflect great work, we get much better performance from our team. Additionally, having management constantly pulling a wide range of KPIs allows us to quickly identify successes and deficiencies and respond accordingly.”
All KPIs at Mountain Hot Tub monitored for incentive purposes are tracked in a Google Doc. That information is sent to corresponding employees throughout the month as a check-in on their goals and progress. The larger-scale KPIs, like revenue per square foot and year-over-year sales, are monitored and recorded in a ledger that Mountain Hot Tub shares with other similarly sized dealers twice a year, in order to have a reference point for how the company’s numbers compare to the industry at large.
Almost every incentive-generating KPI is tied to some form of revenue, Blaser says. “When people understand how they can positively impact revenue in their role, and they are heavily incentivized to do so, they find a way to do it,” he adds.
When the company began to layout its incentive pay structure, Blaser says it looked scary at first: “We were staring at these massive potential earnings for positions that traditionally had a considerably smaller fixed wage,” he says. “What we realized though was that, if every employee hit their top tiers, the bottom-line growth would more than justify the added costs, so long as we continued to monitor our other costs, margins, etc.”
According to Blaser, introducing the incentive programs resulted in immediate increases across the board for Mountain Hot Tub, and KPIs, he believes, are an integral part of that continued success.
“We were lucky to have an already high-performing team, and when we created incentives around job-specific KPIs, it was like throwing gas on a fire,” Blaser says. “It’s been truly amazing results that have absolutely changed the way we do business.”