Learn The Most Important Key Performance Indicators For Your Pet Waste Removal Business
Meet John, a hard-working guy juggling a 9-5 job and his side hustle—his pooper scooper business. He’s got the passion but lacks the knowledge. And, like 95% of new businesses, he’s on the path to failure. His business isn’t growing, and he’s feeling stuck. Why? He’s missing some essential numbers. Are you like John? Stick around, and I’ll show you the 5 key performance indicators that could turn your pooper scooper business into a thriving full-time gig.
John wants to first learn how much money is left over from sales after covering the cost to provide his poop scooping services. This leftover money is what’s known as the gross margin, which can be calculated using the formula
Gross Margin = (Revenue – Cost of Goods Sold) / Revenue X 100
The Cost of Goods Sold (COGS) refers to all the expenses directly tied to providing his pet waste removal services. This could include the cost of tools like rakes, plastic bags, and gloves, the fuel or transportation costs to get to each location, and any specific cleaning materials or supplies needed to sanitize his equipment. Essentially, it’s the total cost of everything needed to scoop and remove the poop.
In the beginning, John started small, with 25 customers providing $500 in monthly revenue. His only expenses were gas and supplies, costing $80.
This means his Gross Margin was ($500-$80)/$500 = 84%.
As the business grew, complexities arose. On month two, John roped in his son, aiming to double his clientele. With 50 customers, their monthly revenue hit $1000. But costs weren’t just double now. Besides the $80 for gas and supplies for himself, there was another $80 for his son as well as paying him $175 ($7 for each of the 25 customers his son handled) making his total cost $335.
His Gross Margin reduced to (1000−335)/1000×100=66.5%
Things took a trickier turn when John, tied up at his day job, hired his brother. Revenue increased to $1350 with 60 customers. But his brother, not as efficient as his son, could only manage 20 customers, while his son took over 30 customers and left John with 10. He has to pay his son $7 for each customer, so 30 * $7 = $210 as well as $100 in gas and supplies for the extra customers. The cost for his son is $310. He has to pay his brother $7 as well for each customer, so 20 * $7 = $140 as well as $60 in gas and supplies. The cost for his brother is $200. In total, he spent $510.
His Gross Margin dipped further to (1350−510)/1350×100=62.22%
The fluctuating Gross Margin was a clear indicator; while growth was essential, managing costs was equally crucial. John faced the reality that growth meant complexity; more customers led to higher costs, especially employee wages.
Through this realization, John learned that having more employees increased his Cost of Goods Sold, impacting his Gross Margin.
It was no longer just about getting more clients but managing a growing business. Since John’s goal was to grow his business full time, he needed to determine how much he’s spending to gain each new customer.
This is known as the Customer Acquisition Cost (CAC) and it’s the expenses like advertising, marketing, or any special offers used to attract new clients
CAC = How much you spend on marketing / Number of Customers Acquired
John decided to venture into paid advertising. Each month, he allotted $100 for Facebook Ads, $100 for Google Ads, $50 for Instagram, and another $50 for door hangers, business cards, and lawn signs. A total of $300 monthly.
During Month 1, his $300 budget brought in 9 customers, making his CAC $300/9 = $33.33.
Month 2: John kept the same marketing channels, and with 15 new customers, the CAC dropped to $20.
Month 3: His strategy paid off, leading to 25 new customers with a CAC of $12.
Month 4: Despite 17 new customers, the CAC rose to $17.65. He began to notice seasonal trends affecting acquisition costs.
Months 5-6 showed a fluctuating pattern with 11 and 4 new customers. The CACs were $27.27 and $75 respectively.
John learned that merely pumping money into marketing wasn’t the answer. He realized he had to be strategic. He discovered that his customer acquisition cost varied throughout the year. By recognizing this pattern, he could maximize his marketing budget by spending more when acquisition cost was low.
Once he began to track his acquisition cost, his marketing strategy became a compass, guiding John’s decisions and helping him allocate his resources wisely.
One area he allocated his resources to was paying attention to how many customers he’s losing over time. This loss of customers is known as the churn rate, and it measures the percentage of customers that stop using his service during a specific time period.
Formula: Churn Rate = (Number of Customers at Start of Period – Number at End of Period) / Number at Start of Period
As John’s brother and son took over the majority of appointments, the quality of his service dipped and people began to leave.
Month 1: Starting with 60 clients, John ended with 55, resulting in a Churn Rate of (60−55)/60×100=8.33%
Month 2: Loss of 5 more clients, Churn Rate increased to (55−50)/55×100=9.09%
Month 3: Another loss of 6 clients, Churn Rate of (50−44)/50×100=12%
John realized his business was like a leaky bucket. He thought about a bucket that’s being filled with water. The water filling the bucket is considered new customers coming in, and the holes where water spills out are not only old clients leaving, but the reasons why they leave.
For John, it was bad quality control and delayed responses to texts and emails since he’s been so busy with work. His brother’s performance, not as stellar as his or his son’s, contributed to these holes. To fix the leak, John understood that he needed to focus on service quality and responsiveness.
By understanding the relationship between Churn Rate, service quality, and customer satisfaction, John could ensure that the bucket stayed full, reflecting a thriving, loyal customer base, while plugging any hole his business might have that will cause more customers to leak out.
After assessing the churn rate, he wanted to see how successful he is at turning potential customers into actual clients. This is measured by the percentage of quotes closed, which looks at how many of the quotes he gave to new customers actually result in a sale.
Formula: % of Quotes Closed = (Number of Quotes Accepted / Total Quotes Sent) x 100
John began tracking how often he was able to get his quotes closed and experimented with his prices to see how his closing % changed.
John, aiming for perfection, initially closed 100% of his quotes.
Month 1: John sent out 9 quotes, all of which turned into new customers.
Month 2: With a 10% price increase, John sent 20 quotes, gaining 15 new customers. Closure rate: 75%.
Month 3: A further 20% price increase led to 35 quotes, 25 new customers. Closure rate: 71.43%.
Months 4-6: Continued price increase to 30%, quotes sent 40, 30, 20; new customers 17, 11, 4; closure rates 42.5%, 36.67%, 20% respectively.
John learned that closing 100% of quotes was not an ideal situation and his prices are too low. Raising his prices allowed him to find a balance where he made more money for the same amount of work, leading to higher profits even if he closed fewer deals.
When I started my poop scooping journey, I didn’t close that many deals. There were countless things I wish I had known sooner. Through platforms like Jobber, I learned the importance of measuring KPIs to better track the health of my business. Not only that, Jobber helped me streamline my operations with features like requiring deposits and generating comprehensive reports. It’s been an invaluable tool for business growth.
As a Jobber Ambassador, I’m hooking you up with a 14 day free trial and an exclusive discount, so if you want to take your business to the next level, click the link to try out Jobber! You’ll also get my Jobber Cheat Sheet For Pooper Scoopers, which has all of my configurations, settings, notification templates, EVERYTHING that I used with Jobber to help you get set up as fast as possible.
Since John already uses Jobber, he’s able to consider a broader perspective using their reporting features: the overall value a customer brings to his business over time.
Known as the Customer Lifetime Value (CLV), this metric considers not just a single transaction but the total revenue a customer can generate throughout their entire relationship with the business.
Formula: CLV = Average Monthly Payment x Number of Months Customer Stays
John initially calculated his CLV as $400, on average his customers pay $100 per month for an average duration of 4 months.
John’s perception of CLV changed when he compared it to looking through a telescope. The telescope allowed him to see far into the future, where small changes in the present had significant impacts on the long-term value of his customers.
With a reduced Churn Rate, customers stayed longer, increasing the CLV to $500 and $600 for 5 and 6 months respectively.
Introducing a premium service priced at $120, the new CLVs became $480, $600, and $720.
By improving his services and reducing the Churn Rate, John could increase the lifetime value of his customers, driving long-term growth.
John’s journey isn’t just a story; it’s a testament to how understanding numbers can shape the course of your business. Dive deep into your KPIs, understand what they’re saying, and use them to drive your business towards success. Remember, every number tells a story.
If you want to dive even deeper with your business, make sure you check out my Pooper Scooper Newsletter The Scoop Report! Every month I share actionable business tips, practical pooper scooper advice, and high-quality insights from across the Pet Waste Removal Industry, directly to your inbox.
And I’ll see you on the next scoop!
And As Always, Acknowledge The Now. Bye!
