How to Identify Underperforming Locations Using Marketing and Revenue Data

TL;DR

• A location’s underperformance is not based on a single metric, like a location’s number of leads.
• Identifying an underperforming location or portfolio requires a multi-location performance analysis that looks at market opportunity, marketing efficiency, lead quality, sales conversion, customer value, and operational capacity.
• Multi-location companies must review performance quarterly to capture seasonality and outliers.

To identify an underperforming branch, perform multi-location performance analysis, which compares each location’s market opportunity, marketing efficiency, lead quality, sales conversion, customer value, and operational capacity.

This guide walks through that comparison step by step:

• How to identify underperforming business locations
• How to identify underperforming locations after an acquisition
• Why you must review your locations’ performance quarterly
• FAQs about identifying underperforming locations

Meet RevenueCloudFX:

One platform tracking multiple locations and countless metrics, and driving stellar results.

Learn More About Our Proprietary Software

How to identify underperforming business locations

Underperformance is not based on a single metric, like a location’s number of leads. One branch may have low lead volume, but if it has a strong close rate and high customer value, it’s generating revenue efficiently and far from underperforming.

Hence, identifying an underperforming branch requires a multi-location performance analysis, which involves the steps below.

1. Consolidate your marketing data first

Before you can fairly compare your locations, put three things in place: consistent definitions for your key marketing and revenue metrics, connected systems that pull each location’s marketing and CRM data into a single place, and location identifiers.

Once your marketing data is centralized, you can compare locations using normalized outcomes that account for market size, service offerings, and the branch’s length of operation.

2. Check your locations’ market opportunity

Determine whether a location has enough demand so you don’t underestimate or overestimate its numbers.

Evaluate the following:

• Search demand
• Location population or business density
• Competitive intensity of each location’s market

If a location has only a few leads, it doesn’t automatically mean it’s underperforming. It may just have low market demand. Meanwhile, if a location has low lead volume but very high market demand, it indicates a visibility or marketing problem.

3. Diagnose the marketing layer and lead quality

If a market opportunity exists in a location, evaluate whether your branch is capturing enough demand by looking at the following:

• Visibility: Is your website ranking in relevant organic and local searches? What is your search impression share and paid campaigns’ reach?
• Website traffic: Are you getting organic, paid, local, and referral traffic?
• Lead generation efforts: Is your branch getting lead form fills, calls, and conversions from your marketing efforts?

4. Diagnose sales conversion, customer value, and revenue

After looking at a location’s market opportunity and marketing layer, analyze the sales and revenue component.

Two locations can acquire the same number of customers, but perform differently. Compare your locations’:

• Customer acquisition cost
• Average sale
• Recurring revenue
• Customer lifetime value
• Service mix
• Cross-sell and upsell potential

In this step, you’re evaluating whether a location is acquiring and retaining customers efficiently.

For example, two of your locations may have the same customer acquisition cost of $500. However, if Location A has a customer lifetime value of $9,000 and Location B’s is $2,000, Location A may be performing better than Location B.

5. Diagnose operational capacity

Look beyond your location’s marketing and sales capacity. A location’s performance may plateau if its operational capacity gets strained.

Thus, look at your locations’:

• Crew or production capacity
• Appointment availability
• Inventory
• Backlogs
• Service radius
• Route density
• Customer wait times

6. Compare locations fairly before you draw conclusions

Once you have findings from every step above, check them against the right benchmark before you act. A mature flagship location and a branch that opened six months ago start from different places, so directly comparing them can be misleading.

Evaluate each location against its own:

• YoY and quarter-over-quarter trend
• Stated goal
• Market opportunity
• Branches with similar size, service mix, and competition

A common mistake that multi-location companies make is comparing a location’s performance against the company-wide average. Roll performance up for leadership’s view of the full portfolio, but drill down at each location’s numbers when examining whether it’s performing.

7. Map what you found to a clear next step

Once you know which stage is actually holding a location back, whether that’s market opportunity, marketing, lead quality, sales, customer value, or capacity, check that finding against the right benchmark. Then match it to one of seven actions below:

When multiple locations need attention, prioritize by revenue impact. Weigh the business impact and how fixable the problem is before you decide where to spend your time.

Having a centralized view of your marketing data across locations is an advantage. You can consolidate your marketing and sales data with RevenueCloudFX’s Multi-Location Revenue Intelligence feature.

This feature lets private equity companies and multi-location businesses compare performance across locations and brands. It also lets you analyze revenue by service line and marketing channels by location. With all this data, you get insights on how to optimize your marketing budget across locations.

How to identify underperforming locations after an acquisition

Because newly acquired businesses rarely come with clean, standardized data, you must take a few steps before evaluating their performance:

1. Establish its own baseline: Look at its marketing spend, number of leads, customers, revenue, CAC, and channel mix before the acquisition.
2. Consolidate its data with the rest of your locations: Standardize its metric definitions to match your other locations. For example, define what counts as a lead.
3. Evaluate its performance: Look at the location’s market opportunity, marketing, lead quality, sales, revenue, and operational capacity.

Why you must review your locations’ performance quarterly

Location performance changes throughout the year, especially for companies with seasonal demand. Having a quarterly review enables you to catch performance gaps throughout the year.

Here are the benefits of a quarterly review of your locations’ performance:

• Catching outliers at the location level: It lets you spot trends at each location that a company-wide average could have hidden. For example, lead quality seems to be improving company-wide, but a quarterly review can show you which location’s lead quality is deviating from your company-wide trend.
• Aligning with seasonal demand: It lets you review a location’s performance against the season’s market opportunity.
• Re-allocating budget when needed: Quarterly reviews let you shift your budget toward the locations converting best, rather than keeping it in a weak-opportunity location.

FAQs about identifying underperforming locations

Meet WebFX

Book a discovery call with us today to discuss how our multi-location marketing services can drive growth!

Book a meeting 717-219-4742

Need help evaluating your multi-location marketing performance?

Multi-location performance analysis lets you understand the growth hurdles that a location faces. It also helps you identify which of your locations are underperforming.

Evaluating multi-location performance brands requires consolidating your data and standardizing definitions across brands so you’re not under- or overestimating.

If you need help identifying underperforming locations and analyzing performance across locations, consider partnering with WebFX. Our multi-location marketing services can help you turn performance data into insights that identify underperforming locations and spot growth opportunities.

You’ll also get access to RevenueCloudFX’s Multi-Location Revenue Intelligence feature, which can consolidate marketing, sales, and revenue data. As a result, you have a single source of truth that makes it easy to evaluate performance by location, offerings, and channels.

Contact us online or call us at 888-601-5359 to book a discovery call!