CDK's purchase of Auto/Mate may create a major disruption in the dealer management system (DMS) industry. Here is our take. DOWNLOAD
It’s the goal of every business to make money - and how can we do that? By increasing gross sales. And how do we do that?“
There is more than one way to skin a cat, as they say in Georgia,” says W. Scott Wheeler, founder and president of Automotive Consultants Group, Inc. Similarly, there are many ways to increase gross sales – increasing car count is one of the most common. That said, in many instances, increasing car count works. But it’s not the only KPI worth focusing on. If you only look at car count, it could cause problems for your shop down the road, whether by overworking technicians or maxing out facility, says Wheeler. He adds that increasing car count is often viewed as a “Band-Aid for all issues” and that it’s important to ensure it’s the best way to increase your gross sales before you implement it."
“Before you go to raise car count, is that the real problem?” Wheeler asks. Again, increasing car count can be effective, but in order for it to happen you have to look at other KPIs and make sure they’re working.
There’s a misconception that increasing car count will automatically increase gross sales, Wheeler says. Some other KPIs you should assess before making the decision to increase car count include: average repair order, gross profit margins, net operating profit, productivity, and efficiency. Track these on a daily basis; it’s important to know how your shop is doing every day, says Wheeler. Wheeler himself gives clients his version of a KPI tracker in Microsoft Excel.
The first step is to identify the right car count benchmark you should be hitting consistently. Ask yourself:
If your current numbers aren’t matching up, it might be time to evaluate what you need to work on before you resort to increasing car count. Every shop has a “sweet spot,” explains Wheeler, but they’re all different, and exact numbers for each will vary.
Wheeler suggests also considering these five factors before increasing car count:
Aside from increasing car count, what are some other ways you have successfully increased gross in fixed ops?