At FenderBender, we write so often about key performance indicators (KPIs) and the shops that track them that we tend to view them as commonplace. Sometimes, we need a reminder that not all shops monitor cycle time, touch time, average repair order, profit margins and the like.
In our second annual KPI survey we found that 68 percent of surveyed shops reported routinely tracking KPIs. They reported doing so for a variety of reasons, namely to gauge the success of their shops.
“KPIs are the only way to truly know and understand your business and know where to make changes to increase the bottom line,” one survey participant said.
Then there are the 32 percent of shops that don’t monitor performance. Some of their reasoning included staffing issues or an emphasis on quality over speed. Others tied KPIs to insurer mandates and refused to track them on those grounds. And some respondents flat-out didn’t know what KPIs were, or how to track them.
Regardless of where your shop falls in terms of performance evaluation, the correlations between tracking KPIs and both revenue and profits cannot be ignored. The higher the revenue, the more likely a shop is to track, and 84 percent of respondents that track reported net profit margins of 6 percent or higher, with roughly half at 11 percent or more.
If you don’t track, you can blame insurance companies, the size of your shop, your location or whatever other factors you want ad nauseam, but just as shops that track KPIs will tell you, the numbers don’t lie. Your chances of being successful in this industry, especially if you’re an independent shop that wants to compete with the growing MSOs out there (96 percent of which reported tracking KPIs) are much greater if you know where you stand.
