Like many others, our company, ImproveIt Home Remodeling, saw a decline as the economy fell into a recession. Unlike many others, our revenue reversal has not been huge and we've actually been able to realize an increase in bottom line profitability.

The reason: We manage our business through detailed reports using ImproveIt! 360 management software, which we developed more than a decade ago. This system gives us the information we need to actively manage the critical business process before we waste or lose money. And we're not timid when it comes to acting on that information.

Ahead of the Game

Here are three ways that having our business's real-time critical information proved essential as the economic downturn unfolded:

1) We were able to see trends before we read about them. Three years ago we noticed an uptick in credit turndowns for large-ticket jobs. Then we noticed closing rates for big-ticket jobs were declining, along with their profitability. We saw home values drop, discretionary income fall, and an overall credit-quality decrease.

When we broke our sales out by product type and job we found that smaller-ticket jobs still returned excellent margins and had strong conversion ratios. So we refocused on new opportunities, and on products that have a strong need factor and that customers can pay for by check or credit card. In 2006, for instance, we did no bath work. In 2009 we did 420 tub liner jobs for $3.5 million. In 2008 we installed more jobs than in any other year of our 20-year history, and in 2009 we exceeded that.

2) We are able to get full value from our leads. Who can afford to throw away a $200 or $300 lead? So we use our system to maximize the value of those leads in two ways. First, once a lead is captured in our system it is never thrown away, so that it continues to add value year after year as we re-contact those customers with promotions and offers. Right now database and previous customer leads generate more than 40% of our jobs each year. Secondly, because these database and previous customer leads are generated at a 6% marketing cost ? compared to industry averages of 10% to 20% ? these jobs add margin that goes directly to the bottom line.

3) We set tough but achievable goals and create incentives at the individual and team levels. And we don't just benchmark employees, we give them live metrics on performance. Nine monitors in our building display real-time dashboards updating relevant daily data ? leads confirmed, appointments run, sales closed, and revenue installed ? so we're not spending money or time compiling reports. This has resulted in greater accountability and alignment with the company's strategic goals on a daily, weekly, and monthly basis.

Moving Forward

These examples represent just a fraction of the power our data management processes give us. Once credit eases, we believe we'll be back to the volume level we were at before the recession began and soon exceed it. This is because our system allows us to know who each customer is that we couldn't finance over the last two years and immediately re-market to them.

Because of our business management software, we will have a plan based on data and analysis that will allow us to complete more jobs at a higher profit than before because at the end of each day, we know that hope is not a strategy.

?Seth Cammeyer and Brian Leader are co-owners of ImproveIt Home Remodeling and ImproveIt! 360, home improvement-focused companies in Columbus, Ohio, with more than 20 years of experience and success.