Ratchet and Wrench released details of the 2017 Shop Performance Survey. There aren’t many reports that focus on the service industry instead of sales, so we pay attention to this one. In the 2017 Survey, there’s a marked decrease in respondents who claim to track KPIs consistently. Just two years ago in the 2015 survey, 82 percent of survey respondents claimed to track KPIs. This year, it’s just 68 percent.

We should all know what KPIs are at this point – Key Performance Indicators – and why they are so important. So then, why is there an alarming trend where KPIs are only watched by two-thirds of managers in the service industry? Is there something they know that we don’t?

Independent Versus Dealership

Personally, the first thing I checked was where the responses were generated from. Of the 200+ shops that completed the survey, 87 percent were independent repair shops, and 68 percent claim to be in the business of General Repair. This alone could be an interesting point to delve deeper into, as the remaining 13 percent are dealerships and franchised.

It would seem that independent repair shops are putting less stock into tracking KPIs, on average, yet they continue to steal away service customers from dealerships at an alarming rate. What are they doing that is more effective than the usual performance factors?

Even dealership service departments don’t track KPIs as reliably. The report shows that dealer-owned service departments dropped from 88 percent to 79 percent in KPI tracking. Even with the higher rate, their efficacy might still be lacking if they don’t fully understand how to implement them in the face of customer service.

Most Tracked KPIs

This provided some very interesting insight, in my opinion. In the summary, Ratchet and Wrench provides this list of KPIs and the percentage of shops that track them:

• Repair Sales Volume: 90%
• Gross Profit Margin on Parts Sales: 90%
• Maintenance Sales Volume: 89%
• Overall Gross Profit Margin: 86%
• Gross Profit Margin on Labor Sales: 83%
• Effective Labor Rate: 78%
• Technician Productivity: 76%
• Technician Efficiency: 75%
• Overall Net Profit Margin: 72%
• CSI: 43%

What seems to be the most important factors among repair shops of all kinds is still Gross Profit and Sales Volume. Only 43 percent of repair shops take CSI scores into consideration, and that could be because many independents have no way to track them at all.

What also stands out to me is Effective Labor Rate, with only 78 percent of shops keeping track of it. It’s a critical component in maintaining a healthy profit margin and helps reduce instances of unauthorized discounting. Why any shop would leave money on the table by NOT tracking ELR is beyond me.

How Do 32 Percent of Repair Shops Track Success?

There are still 32 percent of repair shops that responded who do not track KPIs. Yet, because they are still in business as either an independent, a dealership service department, or a franchised shop, it must be assumed that there’s some level of success.

In many cases, they simply don’t track progress. It’s an extremely loose way to lead, but it must work for at least a few. The major implication is that it’s difficult to move forward and grow when you don’t know where you’ve been or where you want to go.

An Untracked KPI??

Perhaps it has something to do with a factor that isn’t commonly tracked. Independent shops have a reputation for speedy service, and that’s an area dealerships have been sorely lacking. It’s been widely publicized that customers don’t want to spend so much time at the dealership, but little has been done to correct the issue.

Do we need to begin tracking a new KPI called TIS, or ‘Time In Service’? Reducing the minutes or hours a customer spends with their vehicle in the dealership could have the power to improve CSI and increase retention, as well as overall RO counts and repair sales volume.

Think about tracking TIS, the total time from writeup to completion, not just the technician’s efficiency. Reducing the total Time In Service might be a difference-maker for your store.