Monthly Archives

July 2019

10 Important KPIs for Education

By | Education

In education, tutoring and children’s services, you want to have your students to have good habits. But sometimes it is worthwhile to take a look at your own habits. Is your business getting an A+? Also, what habits will predict success? After years of experience and looking at dozens of franchised businesses, we compiled the list of KPIs below.

Sales and Marketing

Cost/Lead

Cost/Lead is an important metric for any small business and is best done both overall, and by marketing method that are popular in education such as Pay Per Click (PPC), Social, Direct Mail, Events etc. Start by tracking it overall, and the buckets can be added on over time. The Home Office should set cost/lead depending on the economics of the business and the franchisees can follow. This is a great way to benefit from the “network effect” in the franchise model. When counting leads, you want to focus on the qualified one, not ones with incomplete information or ones that are vendors trying to sell you something. It should only be people who want to buy your services.

Cost/Lead =(Total Marketing Cost)/(Total Qualified Leads)

Leads

This simple metric reflects the overall health of the business. Year Over Year (YOY) comparisons are useful in education businesses, since they are seasonal depending on the school year and standardized tests.

Trials

Many education businesses focus on trials giving potential customers a “taste” through one free class or a trial. Having a goal for trials for your franchisee is a fantastic way to encourage them to keep momentum within the business. Seasonally, they will wax and wane but there is always opportunity for momentum.

Trial Conversion

Trial conversion measures a few things. It looks at the experience of the trial – did you have the best coach work with that student, and did they get a good outcome? It also measures the sales process after the trial is done. Trial conversion can vary widely depending on the individuals in your organization, so it is definitely worth studying. Some organizations also choose to do deeper qualitative research on former trials.

Trial Conversion = (New Students for Period)/(Trials for the Period) 

Students Created

Having a regular flow of students keeps the environment vibrant and lively. Benchmarking these across franchises can also create a healthy sense of competition.

Operations

Attendance %

While some see low attendance as a good thing – since students are paying but not attending means facilities are not used as much yet the business is still making revenue. But this attitude is outdated. Having students attend regularly means they will come back, instead of losing interest in the program. Also – parents will leave more positive reviews.

Attendance %=(Total Attended)/(total Scheduled)

Churn %

Churn rate, also known as the rate of attrition, is the percentage of users who stop using your services within a given period. In these competitive times where customers have a myriad of options, it is good to watch this number closely.

Churn %=((Students at Beginning)-(Students at End))/(Students at Beginning)

Net Promoter Score (NPS)

NPS is a customer loyalty metric which rates customers as a Promoter, Detractor or Neutral depending on their answer to the following question: “How likely would you be to recommend us to a friend or family member?” on a 10-point scale. Promoters are 9-10, Neutrals are 7-8 and Detractors are 0-6. It can be calculated as follows:

NPS =  (%Promoters)-(%Detractors)

CSAT is also a popular way to measure customer satisfaction

Coaches or Tutors

Hours Taught

Hours taught tracks the operational side of the business, and does not depend on payment plans etc. This is another metric that varies with the seasons and is better to be compared YOY.

NPS/Coach

Tracking NPS/coach helps you determine which coaches are stronger. It then stands to reason that your overall NPS will get higher if you put those popular coaches on more shifts. To calculate, attribute the NPS to each individual coach. You may need to extend the period if there are a lower number of survey responses.



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15 Important Restaurant KPIs

By | Franchisee Scorecard, Restaurants
Restaurant KPIs

The majority of restaurants are franchised. The 2012 US Economic Census numbers say: “the estimated 122,042 limited-service franchise restaurants (NAICS 722513) make up approximately 54 percent of all fast-food restaurants in the United States, nearly 70 percent of the sales of fast-food restaurants ($185.4 billion), and about 73 percent of the employment of fast-food restaurants (3.6 million).”

So – how do you effectively manage a restaurant in terms of Key Performance Indicators (KPIs) in the franchising environment. See our list of 15 helpful KPIs below.

Sales and Marketing

Average Online Rating

With 91% of 18-34 year olds trusting online reviews as much as a personal recommendation, and consumers willing to pay 31% more on a business with positive reviews, there is a great reason why this should top the list for restaurant KPIs. The average star rating, along with the number of ratings within the last month or quarter is the right place to start.

Net Promoter Score (NPS)

NPS is a customer loyalty metric which rates customers as a Promoter, Detractor or Neutral depending on their answer to the following question: “How likely would you be to recommend us to a friend or family member?” on a 10-point scale. Promoters are 9-10, Neutrals are 7-8 and Detractors are 0-6. It can be calculated as follows:

NPS =  (%Promoters)-(%Detractors)

CSAT is also a popular way to measure customer satisfaction.

Number of Transactions

Number of transactions is a way to assess customer count. This can typically be retrieved from your Point of Sale (POS) system.

Average Check Size

Some restaurants prefer looking at this simple metric over worrying about upsell metrics. Essentially, a strong average check size shows that the location is getting more from each of their customers. It can be calculated as follows:

Average Check Size=(Total Sales)/(Total Transactions)

Number of New Loyalty Program Members or App Downloads

Loyalty programs and apps matter in the restaurant space, since increasing retention by just 5% through customer loyalty programs can boost revenue by 25 to 95%. Measuring this helps keep the franchisee’s eye on the ball when it comes to this vital activity. Another way to look at this is % of transactions using the loyalty app.

Service

Speed of Service

This is a great one for increasingly time-starved customers, and it does not require any new data points. Measure this automatically from time the customer walks in or drives up to your restaurant through the  POS, to the time when the food is delivered to them based on your kitchen display system. Some compare this to NPS as well.

Speed of Service=(Food Order Time)-(Food Delivery Time)

Customer Retention Rate (CRR)

Customer retention rates vary greatly depending on the location and the size of the restaurant. For example, you would expect the CRR at a location at the airport to be low, given the audience in transition. This metric can be measured using the following formula:

CRR=((#of customers at the end of the period)-(# of new customers for that period))/(# of customers at the start of the period)

RevPASH (Revenue per available seat per hour)

If your franchisees have empty seats, their profitability is likely suffering. If you watch this metric hour by hour, you can make adjustments to improve the bottom line.

RevPASH=(Revenue/hour)/((Available Seats)/(hour))

% Online Orders

With Off Premise sales becoming such a major part of franchising, this is a great metric to start with. The only caution is that you don’t want to punish those that are growing their revenue in the traditional business. Online orders also tend to have a bigger check size.

% Online Orders = (Online Order Sales)/(Total Sales)

Expenses

% Labor Costs

You may want to split your hourly staff wages versus your manager wages. Some owners-operator franchisees pay themselves a salary. Others pay themselves a dividend out of the profits for tax purposes. By carving out hourly wages into a separate entry, values become more comparable when benchmarked against the system.

% Hourly Labor Costs = (Hourly Labor Costs)/(Total Revenue)

% Food Costs

You should have the actual cost of the items you sold in that period so that you’re properly evaluating profitability. However, some systems don’t have this data easily on hand and they make an approximation using ‘purchases’ during that period. These two numbers don’t necessarily align, so be careful. Make sure you use consistent information for each unit.

% Food Costs = (Purchases)/(Total Revenue)

% of a Strategic Category

Some franchise systems have a very successful category with great profitability, such as soft drinks. Selling a bigger percentage of soft drinks, or whichever that category is within your system is a great start.

% of a Strategic Category = (Category Sales)/(Total Sales)

Food Cost Variance

A metric a lot of franchisors are talking about today is the actual cost of food compared to the planned cost. Tracking this helps track forecasting and handling fluctuations in certain costs such as beef in the future.

Food Cost Variance = (Actual Food Cost)/(Planned Food Cost)

Employees

Employee Turnover Rate (ETR)

Every industry has to deal with turnover, and it is a good idea to determine what is an “acceptable” number in your system.

ETR= (# of employees who left in that period)/((# of employees at the beginning) + (# of employees at the end))/2

eNPS

Similar to Net Promoter Score for customers, above, the Employee Net Promoter score can help you understand how happy your team is. Though some franchisees are hesitant about measuring employees this way, it can add insight – and happy front-line employees mean happy customers.

Ready to Go Further?

If you are ready to go one step further, check out our eBook: Ultimate Guide to Franchisee Scorecards.



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357 Franchise Field Audit Questions

By | Franchise Audits, Franchise Coaching

Are you looking for inspiration on your field audits? You are not alone. In fact, people have been asking for audit question resources since we started the company 12 years ago.

  • To meet the demand, we created a comprehensive resource, where you will get sample questions from the top franchisors around the world, and much more:
    357 Field Audit Questions including Customer Service, Marketing, Food Safety and Quality, Cleanliness and Management.
  • How to make sure that your questions link back to your processes.
  • How to “audit your audit”, ensuring it is as effective as possible.
  • Where to find your processes – it is easier than you think!