Using the Scorecard in Zee Coaching Leading Indicators vs Lagging Indicators
Often, the conversations that FBC’s have with franchisees are mostly reactive based on reviewing historical data on the P&L that shows what did not happen in the previous accounting period. I refer to these numbers on the P&L as “lagging indicators”. These conversations are difficult and often strain the relationship between the FBC and franchisee, especially if the franchisee is struggling.
“If I wait to see it on the P&L, it is too late” – Reactive
I focus on using the Scorecard when coaching Zee’s. – Proactive
The scorecard focuses on the “leading indicators”. Leading indicators are based on measuring what I must do on a daily or weekly basis to have great numbers on my P&L. I should never be surprised to see what my P&L KPI results are. This is particularly important during the initial launch phase with the Zee’s. For example, if I need to produce a revenue number of $30,000 in a month, I can break that down as follows:Scorecard Categories
- Average Ticket
- Closing Ratio
- Appointments
- Leads
Example:
| Desired Revenue | $30,000 |
| Average Ticket | $1,900 |
| Number of Sales Needed | $30,000/1900 = 15.8 |
| Closing Ratio From Appt at 40% | |
| Number of Appt’s Needed | 15.8/.40 = 39.5 |
| Lead Conversion Ratio to Appt 20% | |
| Number of Leads Needed | 26.33/.20 = 197.5 |
We can then focus on the numbers above per day or week. You can then work with the Zee as needed to improve these numbers before the revenue number hits the P&L. It works great when we have the Zee understand the effect of these numbers and they consistently work on the right things to grow their business.
The Scorecard becomes a powerful tool for the FBC to maintain the Proactive conversations that the Zee will come to enjoy and look forward to. The FBC becomes the encourager and coach that they should be, not the sheriff that is just telling the zee what did not happen.
You break down the Cost of Goods and Expenses the same way. If you are interested in learning more about using the Scorecard and the other tools of FOS – Franchise Operating System, let me know.
Here to help!.
