There are several key performance indicators that can be used to evaluate the effectiveness of the sales process. As with all indicators they should be compared to effective benchmarks such as industry averages or same month previous year. Customer loss, profit margins, quote capture, recommendation capture and hours per repair order are all areas that can be used to gauge sales performance. Following are sales performance related key performance indicators with possible actions to be taken in the event they’re not positive:
- Customer Attrition Rate – This indicator is a measurement of the percentage of customers that were lost over a given time period. It’s the inverse of the customer retention rate. Various factors can contribute to lost business but for this writing sales influence is the focus. If the customer attrition rate compares unfavorably to benchmarks then sales processes and relationships may need to be looked at. It’s not easy but ascertaining the reason for lost business by asking customers can determine the areas that need to be improved.
- Profit Margins – In automotive repair profit margins can be looked at for labor, parts and tires as they’re all different. If margins aren’t where they should be then sales processes should be looked at and improved.
- Quote Capture Rate – This KPI is a measure of the percentage of quotes that become repair orders. This area should be measured separately for new business quotes and existing customers. If this indicator is below applied benchmarks then sales presentation methods and pricing should be evaluated.
- Recommendation Capture Rate – This indicator is a measurement of the percentage of recommended services that are accepted by the customer. This measure should not include service interval recommendations but should only look at services that are recommended as the result of diagnoses and inspections. If this value is below benchmark levels then changes to presentation methods and possibly pricing should be considered.
- Flag Hours Per RO – This is a measure of the number of labor hours sold per repair order. There are many non-value add activities associated with processing a vehicle through the repair cycle. So the greater the number of labor hours sold per repair order the more profitable the shop will be. If this KPI is below applicable benchmarks then greater emphasis on upselling should be pursued.
Tags: auto repair sales, auto repair shop management, auto shop customer satisfaction, auto shop customer service, auto shop customers, customer satisfaction, customer service, Repair Sales, Tire Sales, tire shop customer satisfaction