Essential KPIs for Construction Sales & Estimating Dashboards
Benefits of a KPI (Key Performance Indicator) Dashboard
Project dashboards make project management and estimating easier and more efficient by showing continuous performance data at a glance.
When employees and managers have access to their project’s data displayed in a visual element, they gain:
Greater insights into their projects
Increased efficiency and productivity
Improved estimating accuracy
Better communication among team members
Continuous feedback on their performance
Real-time information for better decision-making
A dashboard is beneficial for everyone on the team. It keeps team members engaged, managers informed, and C-suites aware of what types of business decisions to expect.
With the right dashboard, everyone is on the same page and understands what needs to be done across the team to ensure project success.
How to choose your KPI’s
To build a useful sales and estimating dashboard that your team will use, you need to focus on your audience and think about the KPI’s that are relevant to them.
Ask yourself the following questions before you start building the dashboard:
Who is your audience?
Who will be consuming this dashboard?
Is this dashboard for a salesperson, a manager, or an estimator?
What actions do I want the dashboard to encourage?
Knowing exactly who is your target audience allows you to focus on the KPI’s that are most important to them.
Design your dashboard with a specific purpose in mind. If you try to cram as much data in the dashboard as possible, it will end up crowded and convoluted, which leads to confusion and miscommunication. If you have more visuals of valuable data that you would like to display, consider creating a second dashboard that allows you to deep-dive into the data.
Having a comprehensive data platform like Salesforce, HubSpot, or Tableau allows you to create dashboards that serve all of your departments in a scalable way. Anyone in your organization can subscribe to a Salesforce, HubSpot, or Tableau dashboard as well as create recurring alerts based on conditions they set.
Project dashboards should be able to report on estimating and sales KPI’s such as Earned Labour Hours, Qualified Bids, Win Rate by Project Type, and many other useful metrics.
Some KPI categories that you can include on your dashboard include:
Project Activities e.g.:
Number and Value of Bids In Pipeline
Bids Currently Processing
Time Spent & Durations e.g.:
Average Time To Bid Submission From Lead Acquisition
Average Time Per Bid Submission
Average Time From Bid Submission To Award
Milestones & Targets e.g.:
Win Rate, by number of deals and value.
Bid Value Submitted
Bid Value Won / Lost
Resource Allocation e.g.:
Bids In Review
Bids In Queue
Choosing the right visuals for your KPI’s
Strong visuals are hard to ignore. The key to a great dashboard is knowing which visuals to highlight, how to display them, and how to allow the user to move seamlessly through the dashboard. Data that can be hard to grasp when presented in a table format can be easily interpreted by adding the right graphs and charts. Trends and movements can be highlighted by using colours and icons such as arrows.
It’s not enough to have the right visuals though. The elements of the dashboard need to be arranged in the right order so the question prompted by the first element is answered by the second element, and so forth down the chain of questions.
A dashboard that tracks data that no one is interested in, or that doesn’t provide a useful recommended action, is a dashboard that people won’t use.
A useful dashboard can be described as: Displaying the right metrics, for the right person, at the right time.
What’s the difference between a KPI report and a KPI dashboard?
The old method of using reports has several drawbacks. It requires labour to produce, it only provides a snapshot in time, which means the information is outdated by the time the receiver interprets the information, and it keeps information hidden from the producers of that information. It is telling you how your team WAS performing, not how they ARE performing.
In large companies, reports can be behind by several weeks, depending on how many manual data inputs are required to assemble the report. This can lead to inaccurate, delayed, and inadequate decisions being made.
Meanwhile, project dashboards provide a real-time source of information displayed in a digestible way. This leads to less time wasted producing reports, faster decision-making, and more time dedicated to winning projects.
4 things to consider when you are choosing your Dashboard KPI’s
The Dashboard’s Purpose
The dashboard planning process is crucial to creating a useful tool for your team. This is where you need to think about its functionality, intended objectives, and hazards. (Yes, there are hazards associated with dashboards and encouraging the wrong behaviour.)
The most important step is achieving consensus within the team or department on what the most critical KPI’s are and how they should be tracked.
KPI’s are binary. They are either met, or they are not. Establishing what the criteria are for a completed KPI should be done before going live with the dashboard.
Every KPI encourages a certain type of behaviour. It is generally accepted that valuing the profitability KPI the highest can lead to disastrous behaviour within the organization that damages relationships long-term and may even put you in a problematic legal situation. This is why you need a counter-balance KPI for metrics that may steer team members away from company values. For example, if you have a KPI for profitability, you may want to include a KPI for Customer Satisfaction (e.g. Net Promoter Score) to balance the behaviour produced by the KPI’s.
Essentially, your project dashboard should be relevant to the user, encourage healthy and honest behaviour, and provide continuous feedback on performance.
Your Existing Data
Project dashboards depend on data. Clean, unadulterated data, and lots of it.
Start by cataloging all your data sources.
What data are your teams currently producing?
What data are your current systems (ERP, Estimating software, CRM’s, etc.) currently producing?
What formats are produced when exported?
Can you upload the exported data straight into the dashboard software?
Next, make a list of the KPI’s that are measurable with the data that you are currently producing.
These KPI’s should be agreed upon by the team before launching the dashboard. Consensus and unanimity are essential for getting the team to adopt the dashboard into their daily routine and provide valuable feedback.
Your Future Data
Building a dashboard produces a lot of useful questions.
“What would we find out if we added this metric to the dashboard and crossed it with our labour hours?”
“What would we learn if we compared suppliers across projects to find which trades worked most efficiently with a suppliers products?”
Understanding the backbones of your dashboard will help you build additional data sets in the future. Having your data export setup to produce a common format such as XLSX or CSV allows you more flexibility when merging data sets and looking for new insights.
The Actions The Dashboard Will Produce
Try to predict the actions that your team members will take after viewing the dashboard. Understanding the analytical, emotional, and procedural actions a team member will take allows you to build a dashboard that people love having around, and will provide continuous feedback on how to improve.
Some organizations like to encourage some friendly competition by including a leaderboard and win rates, and then rewarding the winners at monthly/quarterly/annual intervals. This can be great if you have a team of “aggressive” high-performers that already have a strong social bond, but putting this on a dashboard for a team that isn’t as tight-knit or competitive will just breed resentment for management for trying to pit people against each other.
Analytics isn’t all cold logic and calculated reasoning. KPI’s will need to be tailored to the culture of your team.
Now, on to the list of our essential KPI’s!
List of Essential KPI’s
Earned Labour Hours – Bid vs Actual
Earned Labour Hours = Bid Labour Hours – Actual Labour Hours
This is a “quick and dirty” way of seeing how your estimating data actually matches field performance.
Value Added – Bid vs Actual
Value Added = Project Bid Value – Project Actual Cost
A critical overview of project performance. This would be a high-level element that can be interacted with to deep-dive into the actual costs and revenues of a specific project.
Projects bid vs won by Project Type
Categorize projects by type (e.g. Commercial Retail Unit, Tenant Improvements, Warehouses, etc.).
Projects Won By Type = Total Project Type Bids Won / Total Project Type Bids
Understanding which projects your team excels at, in both estimating and field performance, allows you to strategize on which bids to accept, which markets to focus on, and where your estimating data needs to be improved.
Projects bid vs won by Client
Projects Won By Client = Total Client Bids Won / Total Client Bids
It’s important to know how often you’re being price-checked. Smaller teams will know this intuitively, but when submitting bids at a larger scale the intuition can disappear.
Another useful metric is tracking the dollar amount of projects bid/won. This lets you know if you are losing projects in a specific cost range.
Not all declined bids are the same. This can be detailed further by adding reasons for declining. Knowing the value of bids declined due to insufficient resources is important for planning expansion and preparing for growth.
Projects Lost by Reason
Categorize lost reasons (e.g. Price Too High, Strong Competitor Relationship, Bid Disqualified, etc.)
Understanding why a project is lost is the only redeeming factor in losing a project you wanted to win.
Value of Projects Lost by Reason
Are we losing projects mainly because our pricing is too high, or because or client lost the bid and we didn’t bid to their competitors? Are our bids being disqualified due to errors in our bidding process?
Profit margin by project type
In some cases, the profit margin is improved by stellar field performance, but sometimes it’s because the project was overbid but awarded anyway.
Using this metric along with “Projects Bid vs Won by Project Type” and “Projects Lost by Reason” allows you to understand the full story behind the profit margin. For example:
Your Weighted Win Rate is 25%
On CRU’s it’s only 5%
Your average profit margin is 13%
On the CRU’s you win, your profit margin is 28%
Conclusion: Something in your CRU estimating data is inaccurate
Estimators profitability by project type
Tracking individual estimator profit margin is useful to see which estimators excel at certain projects, and that will let you set up the right mentee-mentor relationships to improve the strength of your estimating team.
Estimators win-rate by project type
Same as above. Some estimators excel at certain projects, and if you’re a manager, that lets you allocate the right people to the right projects.
Bids currently in development
How many bids are currently being worked on will give you an idea of how much capacity your team has to take on additional projects, or if more resources are required.
Number of issues and mistakes found in bid documents upon review
Having a visual of the results of your bid review and QC process allows you to make changes in your estimating process to reduce mistakes and miscalculations.
Sales (and some marketing)
While I don’t recommend putting too much credence to this metric (results > actions taken), the number of sales activities per rep in a set timeframe can give you a signal of their productivity level. Some common metrics include:
Number of calls
Number of emails
Number of Active Leads and Prospects
Maintaining a consistent amount of leads, in both quantity and value, is important for forecasting and maintaining good cash flow.
Current Market Capture
Current Market Capture = Qualified Bids / Accepted Bids
This is a quick way of estimating market share in your category.
Average Project Profit Margin
Average Project Profit Margin = Cost of Goods Sold / Revenues
Overall, how your estimating efforts are translating to field productivity.
Average Cost per Lead
Average Cost per Lead = Marketing Expenses / Qualified Leads
Customer Lifetime Value
Customer Lifetime Value = Average Value of Sale × Number of Transactions × Retention Time Period
This one takes a bit of work. You need to have some data already in place that is not readily available from your ERP or accounting department.
Qualified Lead Conversion Rate
Qualified Lead Conversion Rate = Qualified Leads Converted / Total Qualified Leads
Qualified Leads by Source
Categorize Lead Sources (e.g. Referral, Conferences, Word of Mouth, Directories, etc.)
Revenue by Lead Source
Use this metric to dial in on which marketing channel provides the highest return.
Opportunity-to-Win Ratio (By Number of Bids & Dollar value)
Opportunity-to-Win Ratio = Projects/Dollars Bid / Projects/Dollars Won
Average Deal Size
Average Deal Size = Total Dollar Amount Awarded / Total Projects Awarded
It’s important to know if the projects you are taking on are increasing or decreasing in size, and being able to predict changes in project size throughout the local seasons and economic cycles.
Sales Cycle Length
Some salespeople will have faster sales cycles than others. Analyze which cycles produce the highest number of winning proposals and figure out what they do differently. A faster cycle isn’t necessarily better. A salesperson may close deals faster than anyone else, but their customers may be dissatisfied in the long term due to missing details or pressure tactics. Sometimes a long cycle is a healthy cycle.
There are several ways of measuring your clients’ satisfaction with your services and their perception of your performance. (Net Promoter Score, Customer Effort Score, Customer Service Satisfaction, etc.) Start simple and scale up the survey as needed. Make it easy for your clients to complete.
I hope you find this list of KPIs useful. I am looking forward to hearing your comments and opinions on building your KPI and dashboard process.
Can you find any other interesting metrics that should be considered for measuring estimating and sales performance?