When you go fishing, you have to measure the fish you catch. When you frame a house, you don’t cut the studs before marking the length. When you’re at the racetrack, you don’t run the quarter mile without watching the clock.

There are benchmarks in everything you do, and you’re made all too aware of the standards of your position. As a service manager or fixed operations director, your role is to monitor, correct, and mentor the staff under you to perform according to the standards you set out for them to do. In the same way, your general manager or dealer principal set your benchmarks, don’t they?

While you can be measured against virtually any criteria, a few stand out as critical. They ensure your success as a manager and are indicators of a healthy department. And yes, they are KPIs – key performance indicators.

What are common KPIs that are tracked?

Gross Profit – this is a big one. Most managers are paid on GP at some level, so it’s no wonder it’s high on the priorities. You know what this is. Income before expenses.

Hours per RO – most commonly used to track your service advisors’ performance, hours per RO is simply that – the average number of hours you sell per work order that comes through your door. It could be over all warranty, internal, and CP, though usually just the customer pay for advisor tracking.

Effective Labor Rate – if you’re trying to find out if your boat has holes in the hull, watch your ELR. Here is where you’ll discover unauthorized discounting and services that are siphoning away your profits.

Net Profit – at the higher level, you might be paid on net profit. More likely, your net is what the people above you are watching because that’s how they’re paid. Said and done, it’s the dollars coming through your door after expenses.

Car count – how many customers are coming in your door? You can have high average hours per RO but if the customers aren’t coming in, how do you turn a profit?

Hours produced – is your shop working at capacity? You’ll be able to tell from the total number of hours produced by your technicians.

CSI – it’s what your customers are saying about you to the manufacturer. It might be flawed and it may be weighted wrong, but you’ve got to abide by CSI.

If you’re an experienced manager, you already know this. If you’re new to the game or are aspiring to get into service management, this may be news. It’s a steep learning curve and there will be numbers thrown at you and reports you need to fill out, and you’ll quickly discover where to find these numbers.

What’s more important is what you do with them.

KPIs aren’t just for measuring. They’re used for making decisions and corrections. If you measure a fish and it’s not a “keeper” size, you toss it back. You don’t measure a two-by-four and mark it, then cut it too short. You use your measurements to adjust your actions, making your department as productive as possible with what you have.

Which KPIs are most important?

Most people would say gross profit is number one, but consider this: Gross Profit is the result you see once other factors are already included. Wouldn’t it make more sense to track the KPIs that are on the ground level?

If your shop is producing good profit but you suspect you’re capable of more, you should keep a close eye on your ELR and your hours produced. This is how you find out if your shop needs more volume or if your giving away the work that you’re doing. If your hours produced doesn’t add up to at least eight hours of work per technician per day, you’re going to need to get more customers in your door. If your ELR is below 70% of your door rate, create a report to flag every instance it occurs. You may have a rogue advisor discounting things or you might have to revisit your pricing on certain services.

If your hours produced low but your advisors are running off their feet, it’s probably time to start coaching them to increase their hours per RO. It could be you need to incentivize them to pull up their bootstraps, or you may help correct their actions. Your advisors can be more effective by producing more hours per customer than by trying to serve more customers at a lower hours per.

CSI and car count are two factors to consider for customer satisfaction and retention. If you’re numbers are good for the customers you have coming in the door, you just need to focus on getting them to come back. Reinforce the importance of the manufacturer’s Customer Satisfaction Index survey to your service staff. When they know what the manufacturer wants to see on the survey, they can help focus their attention on those criteria. If the car count is slipping and your CSI has slumped, you might have a weak spot in your department where customers are being turned off. Seek out a common denominator so you can fix the problem before it worsens.

Not every dealership is measured by the same stick. Domestic manufacturers usually look in a little different direction than the import stores. Premium brands often emphasize different points than the mass-market brands.

What’s important no matter which brand or dealer group you work for is that your department is profitable and your customers keep coming back. Striving for better and making improvements is a daily task – your job is never complete. There is no magic number where those above you will say to just maintain. Monthly, weekly, even daily, watch your KPIs for trends and anomalies, adjusting what you can to make your department run smoothly and successfully.