Using Key Performance Indicators in Automotive Repair

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There are numerous key performance indicators that can be used to measure the performance of an automotive repair shop. Taking the measurements is the first step. In order for the measurements to be effective they must be compared to one or more benchmarks. A widely used technique in utilizing performance indicators is to compare them to industry averages. If a key performance indicator is below the industry average the shop is weak in that area. A measurement above the average indicates an area of strength. Another widely used benchmark is to compare the measurement to an earlier reading of the same performance area to see if performance is trending in the right direction. Following are areas in which key performance indicators can be applied:

  1. Customer Retention and Acquisition – Customer retention and acquisition can be the most impactful measurements in an automotive repair shop. The customer retention rate is that rate at which customers return. In other words it’s the percentage of existing customers that return for service within a given time period. The customer acquisition rate is the rate at which new customers are added or the percentage of customers within a given time period that are new. Usually these measurements are taken over a one year period. The significance of these measurements is that they indicate how well the shop is doing at keeping existing customers and how well it’s doing at gaining new customers.
  2. Quote Capture Rate – The quote capture rate is a measurement of the percentage of quotes that become repair orders. It’s important when taking this measurement to separate new business quotes from quotes for existing customers. Quotes provided for existing customers will generally have a much higher capture rate than those for prospective new customers. In either case the capture rate will indicate the effectiveness of the quoting process.
  3. Recommendation Capture Rate – In the course of the automotive repair cycle recommended services will be identified as the result of inspections and diagnoses. The rate at which these services are accepted by the customer is the recommendation capture rate. This measurement will indicate the effectiveness of the upsell process at the shop.
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