Managing auto repair shop performance can provide insight into areas of strength and opportunities for improvement. A combination of performance indicators and goals will establish measurements of the effectiveness of efforts in different areas. To assess performance – measurements should be compared to one or more benchmarks. Examples of benchmarks are averages of similar shops, same month previous year and established targets. If a performance indicator is above the benchmark this indicates an area of strength. If below the benchmark an opportunity for improvement is signified. Following are performance indicators that can be used to identify repair shop strengths and weaknesses:
- Quote Capture Rating – The percentage of quotes that turn into actual orders is an important performance measurement. Measuring quote capture ratings for new business versus existing customers separately will provide a more accurate picture of performance. New business quote capture rates are generally a lot lower than those for existing customers.
- Customer Acquisition Rate – The rate at which new customers are added is an important measure of business growth. Effective marketing and sales will result in positive acquisition rates. This measure is generally evaluated in relation to the customer retention rate (below) for the same period.
- Car Count – This measurement is a quick, simple way to gauge whether or not sales goals are being achieved. This measurement is not only effective at measuring past performance. It can also be used real time to project results and make adjustments where necessary.
- Sales Target – Goals for total sales dollars can be used in conjunction with car count goals to measure results in achieving planned sales objectives. Similar to car count this measurement can be used to measure past performance as well as in real time.
- Recommendation Capture Rating – Measuring the percentage of recommendations that turn into sold services is an important evaluation of sales success. The sale of recommended services that are generated as a result of inspections or diagnoses can be a significant portion of overall revenue generation.
- Profitability – Profit margins on labor, parts, tires and total RO are important measures of success. These measurements can be evaluated against target goals to ensure that income levels are achieved.
- Proficiency Rating – An important measure of shop management effectiveness is the percentage of available labor hours that are utilized repairing vehicles. An increase in shop proficiency equates to an increase in sales.
- On Time Vehicle Deliveries – The percentage of vehicles that are delivered to the customer when promised can have a significant impact on customer retention. In the customers mind this can be very important as time is so valuable these days.
- Customer Retention – The percentage of existing customers that purchased services during a period is the measurement of retained customers. This performance indicator is a measurement of how well the shop is doing at keeping customers.