In this episode of Leap to Scale, Justin Davis and Greg Ross-Munro break down how service businesses should think about measurement without falling into “death by KPI.” Greg and Justin explain what KPIs are, why technology platforms unlock better visibility than spreadsheets alone, and how the most useful metrics often show up when you track performance over time. They explore practical KPI examples like proposal time-to-close and engagement signals, then zoom out into how KPIs lead to better questions, reveal constraints in your business system, and ultimately surface new growth opportunities. The episode closes with a simple starting point: track one thing consistently, and always build user analytics into any system you create from day one.
Episode notes
- What are KPIs? (and how to avoid “death by measurement”)
- Why technology platforms give service businesses access to new, more actionable metrics
- Sales and proposal KPIs that matter: time-to-close, engagement signals, and follow-up automation
- Why tracking KPIs over time is where insights start to appear
- How KPI tracking evolves into data analytics that can reveal new markets and operational savings
- A field-service example: geofencing, route efficiency, proof of work, and turning “violations” into billable evidence
- A practical framework: the 5 subsystems to measure (acquisition, qualification, quoting/booking/closing, delivery, retention)
- Theory of Constraints: improve the slowest step first, then move to the next bottleneck
- Greg’s “pick one you love and one you hate” KPI rule to balance personality and blind spots
- Non-negotiable: add user analytics to your software from day one
Episode Transcript
KPIs That Actually Matter (and the Ones to Ignore)
Justin Davis:
Hey there, this is the Leap to Scale podcast, the podcast that helps service companies create breakout growth using technology. My name is Justin Davis. And Greg, it looks like you are in a little bit of a different place than we normally do this podcast from, or you normally do this podcast from. Where are you? What are you doing?
Greg Ross-Munro:
I’m Greg Ross-Munro. I’m in a nice little hotel in Basel, Switzerland. And it is nice and cool outside, crisp, and very pretty.
Justin Davis:
What are you doing in Basel?
Greg Ross-Munro:
We have a lot of clients in Basel, and in Europe in general. So just did a couple of days in Hamburg and Basel for a couple of days here. Then Geneva, just doing the annual European grand tour, enjoying the food, the wine, the wonderful people. And then flying home back to you, buddy, on Friday to sunny Tampa, Florida to enjoy drinking beer and talking about AI with you on the weekends as well as our day jobs.
Justin Davis:
I love it. Best drink that you’ve had?
Greg Ross-Munro:
I know this is going to surprise you, but not a lot of drinking. Spending time with, they’re buying the wine. So I’m drinking a lot of delicious white wines.
But today I think we’re talking about the most exciting thing in the world, which is KPIs. And I think it’s very appropriate that I’m in Switzerland because this is the home of measurement, man. This is the home of great watchmaking. You know, I’m a watch nerd. And I unfortunately brought a Japanese watch with me to Switzerland. So yeah, I don’t know if I’m going to get into trouble for that, but that’s okay.
Justin Davis:
Is this a faux pas?
Greg Ross-Munro:
As are very Swiss. That’s right. Yes.
Justin Davis:
Very exacting measuring what you’re doing. And so we’re going to dive into that today. Talk a little bit about what the KPIs are that, if you’re a service company and you’re trying to scale and you’re looking to use technology to do that, there are certain things that you measure and certain things that you should look at, almost like looking at the speedometer of your car, the dials and the gauges there to know if the business is healthy.
You probably already do this. You probably look at your annual reports. You look at your revenue. You look at your expense. You look at your EBITDA.
But there are also other metrics that you can be looking at to start to look at your business through kind of a different lens. So, you know, Greg, I guess what we should start off with is, you know one thing that we don’t want to do is we don’t want to have death by KPI, death by measurement.
Greg Ross-Munro:
What is a KPI? First of all, for those who do not know, because now you’re already in industry talk.
Justin Davis:
KPI stands for Key Performance Indicator. It sounds exciting. All it is, all a Key Performance Indicator is, is just a number that tells you something interesting about your business. It’s just something you measure. It’s like your weight that you measure when you get on the scale.
So that’s the idea. It’s a number that you measure to know if something is going well and it ends up becoming a target that you work on improving. And there are lots of things you can measure. Measuring revenue is a KPI of a sort.
Greg Ross-Munro:
Yeah. I mean, for your CFO, or if your CEO cares about it, hopefully everybody cares about it.
But I think the thing we want to focus on today is like, there are metrics that you have different access to measure once you move to a technology platform, as opposed to just the standard business metrics you look at on your balance sheet and income statement.
If not, get yourself a fractional CFO. Great decision and well worth it.
But there are certain things that you start to see when you step back from your business and look outside the day to day. Other than just purely financial metrics, like how long does it take to collect? Time for collections, how long is something in AR.
If you start building your business on a technology platform, or building software around what you do to aid service delivery, you have way more access to different ways of thinking about metrics. You can collect more data. You can start with a hypothesis about what’s going to drive your revenue numbers.
Can you think of an example that a service company would want to track if they’ve moved from a traditional service model?
Justin Davis:
I’ll give you a great example for anybody that does proposals.
One is the time to close from when a proposal is sent. There’s a certain amount of days that elapse between when you send a prospect a proposal and when they sign it and send it back and the deal is closed.
If you’re able to shorten that window, it means you can get more work into the machine faster and increase overall throughput.
Let’s say it takes you on average 30 days to go from proposal out to proposal signed. If you can get that from 30 days to 12 days, that’s a really big deal.
It’s not terribly hard to track manually, but you’re probably not tracking when every email is sent out and when the actual close date is and looking at it over time.
If you use proposal writing software, it will calculate that automatically and also show things like how many times the prospect looked at the proposal. Are they looking at it often or not?
When you’re in a service business, you have to spread your attention and put as much attention as you can on the highest value prospects and not waste time on the lowest value prospects. If you don’t have visibility into how many times someone has looked at a proposal, it’s harder to know how to spread your attention.
Greg Ross-Munro:
Yeah, okay. I’m with you.
You said that’s pretty easy to track with a spreadsheet. Other than the open rates, which is tricky. You could theoretically send out an email, go into a spreadsheet, type in the time you sent it, then later type in the date it closed, and be super diligent about that.
Why would I, how much better can using software be than that? Are there other numbers that surface that can be tracked differently?
Justin Davis:
Yeah, I think so. There are lots of different numbers. That’s one example.
You do get some intangibles like who is looking at the proposal. That’s something you cannot do without a piece of technology in the mix.
And then you can do automations, like if they’ve looked at the proposal three times and you haven’t heard anything back within 24 hours, it would be nice to send an automated message that says, “Hey, got any questions about the contract? We’d love to answer any questions.”
That kind of follow up is known to boost conversion, but it’s hard to remember consistently. You can get it on rails and free up mental capacity for your team.
Greg Ross-Munro:
I agree 100%. That’s why you’ve seen an explosion in CRM and workflow automation platforms.
The really interesting stuff that starts to happen is KPIs as the first step toward data analytics.
Let’s say you’re a sheet metal welding company. You can grow the workforce, but for every person you add, you probably have to add back office headcount too. You can’t just scale the workforce side. You have to scale management and operations.
As your business grows, the metrics that drive future growth become less clear. But if you start picking at numbers you have a hypothesis about, you can uncover new business opportunities and new directions.
In one example, they noticed certain types of metal jobs were being requested in different regions. That allowed them to change raw material purchasing and build different distribution centers, reducing costs.
They also noticed a small set of customers repeatedly requesting the same type of job. Data showed they were building new types of machinery that were becoming popular in a growing market. They changed their marketing direction because they saw those numbers moving.
Tracking KPIs comparatively over time is what bubbles up those questions. “We did half a ton a year and a half ago, now we did a ton. What happened?”
Justin Davis:
Yeah, I think what you’re getting at is that these numbers help you ask better questions.
Looking at KPIs over time is particularly interesting. When you see change over time, you can ask, “Why is that changing?” That question can reveal competitive edge, new markets, and how you should drive the business.
Greg Ross-Munro:
Another example is employee metrics for a field service business.
As they grew, they kept operations basically the same size but increased the number of workers. They became more profitable because they served more communities.
They bought off-the-shelf time tracking software. Work crews logged time because it was billable and needed an audit trail. But humans aren’t infallible. Some people messed with time entries.
So they built their own mobile app. They still used the same off-the-shelf time tracking software. The app talked to it through the API.
They added geofencing so crews could only log time when on the property, and they were automatically logged out when they left. It reduced stress for workers.
They also tracked routes and found some crews were taking inefficient routes. It turned out they hadn’t trained them on Google Maps, so they built routing into the app.
They tracked “violations,” too. Crews had to deal with issues in communities before doing their main work. Now they could take a photo, label the violation, and have evidence. They could show customers and justify changing pricing, including charging per violation.
They had no way of tracking that in the field before implementing the technology.
Justin Davis:
Right. And they knew their customers’ KPIs and knew how to own their KPIs to make a business case to customers.
Greg Ross-Munro:
If you have a successful or growing service business and you want to scale, what should you track? What numbers matter?
Justin Davis:
Here’s the way I would approach it.
Break the business down into constituent parts. There’s a book called The Phoenix Project that I recommend even if you’re not in technology services.
Most service businesses have to get attention (marketing), then sales (calls or forms), then closing (proposal/contract), then service delivery, then support.
So you can track KPIs for each:
- Attention: website visits
- Conversion: how many people click “get a quote”
- Closing: proposals won versus written (win rate)
- Delivery: metrics unique to your service
- Support/retention: lifetime value beyond the single engagement
Then quarter to quarter, you can work on improving one subsystem. You also look for your biggest constraint. You can only go as fast as the slowest part of the system.
Greg Ross-Munro:
You’ve talked about constraints and the theory of constraints. Can you explain a bit more?
Justin Davis:
Goldratt’s Theory of Constraints is the idea that a system is only as fast as its slowest step.
Imagine a factory converting trees into paper. If trees pile up because cutting can’t keep up, then cutting is the constraint. You optimize that step. Then the next step becomes the constraint.
You go down the system and optimize piece by piece. You’re never really done. KPIs help you know when you’re hitting thresholds and where you need to change things.
Your job as the entrepreneur is to ask: where is the next constraint I need to solve to push the work through the machine faster?
Greg Ross-Munro:
That helps. This stuff can feel overwhelming. But I think your point is: do the next best thing, track it, have one or two theories ahead, then optimize one at a time until you hit the next constraint.
Justin Davis:
Yep.
I think there are five subsystems to start with:
- Acquisition
- Qualification
- Quoting, booking, and closing
- Service delivery
- Support, retention, and expansion
Write them on a whiteboard. Brainstorm which one is hardest to move the needle on. Start tracking it and chip away.
If you check out the website for the podcast, we have a cheat sheet with a grid of those five areas, common KPIs to track, and approaches to track them.
Greg Ross-Munro:
I have another piece of advice about choosing which one to measure.
A management professor told me: pick the KPI that is most important to you personally, because your business has personality baked into it. If customer joy is what drives you, measure the moments of joy you’re creating.
Then pick the one you like the least. The KPI you avoid is probably your biggest weakness or blind spot. If you balance one you love and one that’s your vegetables, it can help you make that first decision.
I love that advice.
Justin Davis:
I love that. That’s a great behavioral aspect.
Greg Ross-Munro:
So: track KPIs with technology, track them comparatively over time, they lead to data insights, and use constraints and those five categories to decide what to work on, plus pick one you love and one you hate.
Did I sum that up?
Justin Davis:
Yeah. And the last thing I’ll add is, you can start simple. If it’s overwhelming, track one thing. Track how many sales you get every day. Track how many phone calls you make. Once you get in the habit, it gets addictive.
Greg Ross-Munro:
One more thing. Track usage of the system. If you’re building a system and you do not build in user analytics from day one, shame on you and shame on whoever built it. I’ve made that mistake too. I’m off my high horse.
Justin Davis:
Yes. Day one.
Greg, thanks for joining us from Basel.
Greg Ross-Munro:
My pleasure. Good to see you. I’ve missed you. It’s been a long week.
Justin Davis:
It’s crazy that we could just do this across the world like this. It’s very bizarre.
Greg Ross-Munro:
Yeah, I brought this heavy microphone with me. Hope it sounds good.
All right, my friend. Thank you very much. Good to see you. Bye everybody. Ciao.
Justin Davis:
Alright, see you guys!