Know Where You Stand
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.
On a final note, you’ll also see in this issue that we’re accepting nominations for our seventh annual FenderBender Awards. The awards recognize the collision repair industry’s finest professionals in five categories: executive, management, shop worker, administrative support and wild card (open to anyone who doesn’t fit in the other categories).
We are looking for the difference makers in your shop. Those talented, inspirational people who make this industry better for everyone involved. You probably work alongside these deserving individuals every day. Share their story with us for a chance to recognize them on a grand stage.
A brief nomination form is available at fenderbenderawards.com. Nominations are due July 1. Winners receive an award and are interviewed by our editorial team for a profile that will appear in the October issue.
Reviewing nominations of the collision repair industry’s most impressive professionals is one of the highlights of my job. I’m looking forward to reading yours.
Jake Weyer, Editor