Why ‘above average’ is ‘market leading’

We all keep count of the leads coming in, but they need to be understood in context, argues managing director of Business Pilot, Elton Boocock.

For the last four years, we have published the Business Pilot Barometer, a monthly summary of the window and door market in the UK, using data gathered from users of the Business Pilot CRM system.

It has been exceptionally popular, with many companies up and down the supply chain using the information to help them make decisions on investment, new markets, and product development.

Like all raw information, the data we capture each month is not very useful on its own. So, the first thing we do is set it against an economic backdrop, and look at what’s happening in the wider marketplace. For example, over the last 18 months we’ve seen the cost-of-living crisis take hold, inflation rise following the doomed mini budget of September 2022, and the ongoing war in Ukraine.

All these things affect the way money is invested in housebuilding and home refurbishment, and we need to track their influence.

Secondly, the way data changes is more valuable than a monthly snapshot. So, if we compare year-on-year trends, we have a better understanding of the way the market is moving than if we look at data in isolation.

And thirdly, we don’t want to overburden ourselves, so we limit the data we use to a handful of key metrics: order values – to see if the size of jobs have changed, or prices kept up with inflation; lead volumes – how ‘in demand’ our offering is; conversion rates – how much people are browsing versus buying; lead times – if we start to see this extend, it could back up a change in conversion rate; and sales volumes – which is the result of lead volumes and conversion rates.

The Business Pilot Barometer usually examines the data we collect first on a rolling three-month basis, and secondly on a yearly comparison. At this year’s FIT Show, I held a seminar where I looked at the data we had gathered over a four-year period, which gave a further fascinating insight into market trends.

Slide 1

Starting with lead volumes, we can see a consistent trend emerge where leads slowly diminish throughout the year. So, the trick is not to look at the leads you are receiving on a month-by-month basis, but as an average over the course of a year. If you set your targets against that expected curve, you can better manage your enquiries and your outputs.

Slide 2

Which brings us on to conversion rates. Many things affect this statistic. On the one hand, you have the speed of conversion, and the quantity, which is what we saw during Covid – over 48% at one point, which is almost one in every two leads converted.

It also proves that your sales technique is working, and you have a desirable product range. But don’t forget, this is the figure from all window companies using Business Pilot. So, if you are converting more than the Barometer average, then you are outperforming the market.

But what this figure also tells us is that buying habits are changing. It suggests that more people are conducting research before approaching two or three companies, rather than simply calling in four or five companies to quote. Understanding this should affect the way you respond to enquiries.

Slide 3

And then we have order values, which can fluctuate wildly. What we can see over a four-year period is that prices grew in a way not seen before in recent times as a result of: high demand due to people spending more time in their homes; low supply created at every stage of the supply chain; and inflation (as a result of the other two and global gas prices).

However, any ‘cooling’ happened in Q4 2022, and we can start to predict the coming months.

Slide 4 and 5

When we look at the changes year on year, it looks alarming – 12% drop then 27%, what next? But if we look at the wider context, we can see that February 2022 was an outlier. A multi-million-pound contract could have skewed the numbers over shorter periods, but if we look over the years, the order value growth is more consistent. And if we adjust the monthly average order value to take out any outlier, we get a more accurate picture – still a drop, but it is more realistic.

Ultimately, the success of your business is not down to the figures, but what you do with them. And once you understand them, you can outperform them, and that’s where Business Pilot comes in.

Business management systems can help you to increase the number of leads from existing customers or from previous enquiries. And better management of your leads will give you a better conversion rate. We’ve seen that people are approaching fewer companies for quotes, so those enquiries that cross your desk are yours to lose.

Find out how we can help automate processes in your business, remove inefficiencies, create visibility across all departments, and ultimately keep your business above average!