More Numbers Do Not Always Lead to Better Decisions - DataTurk.ai - Done-For-You Business Analysis for Home Service Business Owners

This is Part 4 of a six-part series on using AI to make better business decisions. We’ve already covered two problems: your numbers need clear definitions, and a correct answer can still come from the wrong question. Now we need to decide which answers are worth acting on.

Home service companies can measure almost everything today.

You can track calls, leads, booking rates, cancellations, close rates, average tickets, memberships, revenue by technician, marketing costs, unsold estimates and dozens of other numbers. Connect AI to all that data, and you can start finding patterns you never had time to look for before.

That sounds like a good thing, and it can be. But finding more things to measure doesn’t automatically help you decide what to do.

Interesting Can Become a Distraction

Suppose AI tells you that your close rate is 2% lower on Tuesdays.

Interesting.

It also discovers that customers from one marketing source have an average ticket $73 higher than those from another source.

Also interesting.

Then it finds that one technician sells fewer memberships than everyone else.

Now you have three more things to think about, but you still don’t know what you should work on Monday morning.

That’s the difference between information and a decision.

A number deserves your attention because changing it can produce a meaningful result, not simply because AI found something unusual.

Follow the Money Through the Business

Revenue in a home service company doesn’t come from one number. A series of things has to happen.

Marketing creates opportunities. Your CSRs turn some of those opportunities into booked calls. Your company runs those calls. Technicians create estimates. Customers approve some of those estimates. Your team completes the work and collects the money.

A weakness anywhere along that path can reduce revenue.

Suppose your close rate is 92%. Could you make it 94%? Probably.

But what if your booking rate is only 57%?

You could spend weeks trying to squeeze another couple of points out of an already strong close rate while a much larger number of customers disappear before they ever meet a technician.

The 92% close rate is something you can improve. The 57% booking rate may be something you should improve first.

Those aren’t the same thing.

Ask What the Improvement Is Worth

This is where AI can become much more useful than another dashboard.

Instead of asking only, “Which numbers are below our goals?” ask AI to help you estimate what happens if each number improves.

What would a five-point increase in booking rate produce?

What would one additional completed call per technician per week produce?

How much additional revenue might come from following up on unsold estimates?

How much would you save by reducing cancellations?

Now you can compare opportunities instead of staring at a collection of red, yellow and green boxes.

You should also ask what each improvement will require. A problem worth $200,000 that costs $20,000 to fix may deserve more attention than a problem worth $250,000 that requires three new employees and $300,000 in spending.

The biggest problem on a report isn’t always your biggest opportunity.

Decide What Comes First

A business owner will always have more things to improve than time to improve them. AI doesn’t change that.

AI can help you narrow the field.

Show me what changed. Show me what each change is costing us. Show me what could happen if we improve it. Show me what the improvement may require.

Now you have something you can use to make a decision.

So far, though, every article in this series has dealt mostly with things that already happened. Business owners don’t only want to understand last month. They want to know what happens next month, next quarter and next year.

That’s the subject of Part 5, “AI Can Guess the Future. It Cannot Know the Future.” We’ll look at what an AI forecast can tell you, what it can’t tell you, and the questions you should ask before betting money on its prediction.