Five numbers run every service business, whether the owner tracks them or not: what a customer is worth over the years they stay, what it costs to put one booked job on the calendar, how fast a new lead gets a response, how many quotes turn into yeses, and how full the schedule is. You don't need software for any of them. A pen, last month's records, and twenty minutes gets you all five, and each one makes a specific decision for you that guessing can't. I've sat with owners doing strong six figures who could quote their truck payment to the dollar and couldn't put a number on any of these within a country mile. That gap is where the money leaks. Below is each one in plain English, the napkin version of the math, and what to do differently once you know it.
What Is Customer Lifetime Value for a Service Business?
Customer lifetime value is the total revenue one customer hands you across every job, tune-up, and referral for as long as they keep calling you. For most service businesses it runs somewhere between 3 and 10 times the first invoice, because the first job is rarely the last one.
The napkin math: pick your ten oldest customers, add up everything they've ever paid you, and divide by ten. It won't be precise. It doesn't need to be. The decision this number makes for you is how much you can afford to spend to win a customer. An owner who believes a furnace customer is worth one $400 repair will choke at paying $150 for a lead. An owner who knows that same customer is worth $8,000-15,000 over a decade of repairs, maintenance, and an eventual replacement will pay the $150 all day and wonder why the phone doesn't ring more. The lead and its cost are the same for both owners, and the only difference is the number in their head.
How Do You Work Out Your Cost Per Booked Job?
To work out your cost per booked job, take everything you spent on marketing last month, ads plus whatever you pay anyone to run them, and divide it by the number of jobs that made it onto the calendar because of that spend. If you spent $1,500 and booked six jobs, your cost per booked job is $250.
Count booked jobs only. A lead that never books is a cost with no revenue attached, and averaging it in is deliberate, because the number should bake your dead leads into the price of the live ones. Once you have it, hold it against what a job is worth to you in gross profit. That comparison makes the decision for you. When a booked job costs you $250 and puts $1,000-2,000 of margin on the table, the answer is spend more, carefully, and give any change about 90 days to prove itself before you judge it. When the booked job costs more than it earns, volume won't save you, and the problem sits upstream in the ads or the page they land on. I walk through the full math in what a booked job costs you.
How Fast Do You Actually Respond to a New Lead?
You find out how fast you respond by measuring the gap between the moment a lead comes in and the moment they get a real response from your business, off the record and never from memory. The napkin version: pull your last ten leads, write down when each one arrived and when you got back to them, and average it.
Nearly every owner I've asked guesses under an hour. The record usually says three or four, with a couple that sat overnight, because the guess is about intent and the record is about what happened while you were on a roof. Leads go cold within minutes of coming in. The buyer who filled out your form called two competitors in the same sitting, and the first real answer usually takes the job. The decision this number makes for you is a blunt one: if your average sits over an hour, more discipline won't close the gap, because you can't answer a phone from a ladder. You need a follow-up system that answers the second a lead comes in, whether you're free or not. I made the full case in speed to lead.
How Do You Measure Close Rate and Show Rate?
Close rate is how many of your quotes turn into booked work. Show rate is how many booked appointments happen, on both sides: you showing up and them being home. Measure both from a month or two of history. Count the quotes you gave, count the yeses, and divide, then count the appointments that got set against the ones that took place.
Owners rarely write either number down. In-home services tend to close somewhere between 3 and 5 out of 10 quotes when the leads are decent, and knowing your own rate, and whether it moves, tells you more than any exact benchmark. The decision these two make for you is where the leak is. Owners with a slow month almost always reach for more leads, and half the time the leads were fine. If twenty quotes went out and three came back, buying more leads pours water into the same cracked bucket. Chase the fifteen quotes still sitting in silence first, because a quote nobody follows up on usually becomes a job for whoever did.
What Is Capacity Utilization for a Service Business?
Capacity utilization is how full your schedule really is: billable hours worked divided by the hours you had available to sell. The napkin version: take the last two full weeks, count the hours you or your crew spent on paying work, and divide by the hours you could have worked. It times every other decision on this list.
Above roughly 85-90 percent you're full, and you should raise prices or hire before you buy another lead, because marketing a business with no room to take the work just manufactures angry callers. In the middle band, around 60-75 percent, you have room, and marketing spend has somewhere useful to go. Well under that, the empty schedule is the emergency, and this is the number that tells you to move now instead of waiting for word of mouth to fill it. Capacity decides what the other four numbers are for: it tells you whether this quarter's goal is more demand or better prices, and whether the next hire happens now or later.
Summary
One napkin holds all five: what a customer is worth, what a booked job costs, how fast leads hear back, how many quotes close, and how full the trucks are. Twenty minutes a month keeps them current, and after a quarter of watching them move you'll make spending and hiring calls with a steadiness gut feel never gives you.
If you can pull three of the five tonight, you're ahead of most of your competition. And if the marketing-side numbers are the fuzzy ones, that's the part I build for a living. Book a call and we'll put real numbers where the guesses are.
