Auto Repair Shop Metrics: 7 KPIs You Must Track

In any line of work, including auto shop management, it pays to keep track of certain statistics tied to your business’s overall performance. Doing this might sound like hard work, but it doesn’t have to be. Plus, the payoff is more than worth the effort — tracking the right metrics will make it much easier for you to make crucial business decisions.

By closely tracking your auto repair shop metrics and comparing them to industry averages, you can better understand what your shop is doing right. More importantly, you can instantly understand what needs improvement. Keep reading for a quick look at the seven KPIs your garage should track.

1. ARO (Average Repair Order)

Few stats are more critical to auto shops than their ARO. This statistic measures the average amount of cash you take in for each order you work on. Needless to say, the higher your ARO, the better your garage is doing financially.

Recent research suggests that, across North America, the “typical” garage’s ARO is $473.36. Whether your ARO is lower than that amount or you want to maximize this statistic, you may want to think about:

• Updating your labor matrix. Even slight adjustments to your labor matrix can enhance profitability and help you get more significant work. Just be sure to make these changes with your ARO in mind.
• Focusing on high-value customers. Of course, there’s no need for your shop to reject customers with “small” auto repair jobs. Still, being more selective about the tasks you prioritize is a fantastic way to supercharge your ARO.
• Revamping your marketing strategy. If you’ve historically neglected your auto shop’s marketing needs, now’s the time to change that. After all, a well-thought-out marketing strategy can be a highly effective way to increase your ARO.

Are you looking for even more insight regarding your repair orders? If that’s the case, you can also track the number of ROs you get and the time spent on each one.

2. Billable Hours

There’s no getting around it: billable hours are one of the most significant metrics out there for auto shops. By carefully measuring your billable hours, you’ll get a better sense of your mechanics’ capability and productivity.

Of course, tracking your techs’ billable hours this closely might sound like a hassle — and back in the day, it was. However, the good news is that things have changed significantly since then. By choosing the right auto shop solution, you can track this just as easily as you would keep an eye on any other statistic!

3. Effective Labor Rate

What is your shop’s posted labor rate? Knowing that can be extremely helpful — but it won’t give you the information you need by itself. What you need to know is your effective labor rate; that is, the actual revenue you bring in hourly.

Finding your effective labor rate is simple — divide your total labor-related revenue by the total number of labor hours your technicians have billed. Having a high effective labor rate indicates that your mechanics are bringing in customers and keeping your shop profitable. On the other hand, a low effective labor rate can suggest that you have some issues to work on. Take time to rethink your business strategy and ensure your offerings are sufficiently diversified.

4. Customer Retention and Acquisition

As an independent auto shop manager, you know exactly how important it is to bring in new customers and to give your existing customers reasons to come back. Fortunately, there’s a way to quantify and measure your performance in both of these areas. All you need to do is track your customer retention and acquisition rates.

These statistics are both relatively straightforward: your retention rate is the rate at which existing customers come back for service, while your acquisition rate is the rate at which your shop brings in new customers.

That said, you’ll need to take measurements for about a year to get usable data for these rates. But after you do so, you’ll get an eagle-eye view of your shop’s efforts to attract and keep clients.

5. Quote Capture Rate

Are you wondering how effective your quoting process has been? Knowing your quote capture rate can help. This statistic measures the percentage of quotes generated by your shop that actually become repair orders. Just try to keep quotes for new and existing customers separate — quotes for customers in the latter category tend to have a much higher success rate.

Along with that, make sure you don’t confuse this statistic with your recommendation capture rate. As its name suggests, this statistic is similar to your quote capture rate in some ways. However, it focuses on customer acceptance of services suggested by mechanics after vehicle inspections. Ideally, your shop should be able to track both its quote and recommendation capture rates.

6. Gross Profit

It goes without saying that your auto shop should carefully track your profit. Still, keeping track of profit can be a bit more involved than you might think — especially since there are multiple types of profit you’ll need to keep an eye on. 

The most basic form of profit is gross profit, which you can find by taking your sales numbers and subtracting the costs associated with parts and labor.

7. Net Profit

While gross profit can certainly be good to know, it isn’t the most accurate reflection of your shop’s bottom line. That would be net profit, which takes the process of calculating gross profit one step further by considering all your garage’s expenses. Net profit may take longer to calculate than gross profit, but this statistic’s importance to shops like yours can’t be overstated.

Track Success With AutoVitals

Let’s not sugarcoat things — if you’re running an independent auto shop, there’s a good chance you already feel overworked. Because of that, keeping track of all the auto repair shop metrics listed above might seem like an impossible task. Thankfully, you don’t have to do it alone — AutoVitals is here to help!

When you choose AutoVitals as your garage’s digital solution, you’ll have the opportunity to benefit from its Digital Shop features. That includes simplified tracking of the auto repair shop metrics you need to know. Along with that, you’ll have access to built-in customer retention management tools. And if that isn’t enough, AutoVitals’ workflow management capabilities can boost your average repair order by 30 percent. Schedule a demo today to get started!