Key Performance Indicators

Key Performance Indicators- Suffocating or Enabling Repairers?

Most collision repairers track Key Performance Indicators dictated by insurers, without having any to gage the health of their own business


If you were to ask many collision repairers what Key Performance Indicators or KPI's they track, the likely responses are either:

  1. Severity, cycle time, and CSI, or
  2. We don't have to track KPI's; our insurance partners give them to us.

When I hear these responses, I have two comments. First, KPI's supplied by insurers provide insight into how well you're doing for them, while your own business could be going into a death spiral without your knowledge. There may be some similarity and overlap but an "insurer specific" KPI is not your KPI, it's theirs! Second, it's your business; you need to take the time to ensure that you're getting a reasonable return on your investment!

OK, I know the above comments are extreme. Most repairers have some business KPI's, but I'm trying to make a point. Repairers, in general, spend far more time measuring insurer related KPI's than they do monitoring the KPI's impacting the overall health of their business. Tracking numerous insurers' KPI's can suffocate your business. I propose that the business KPI's should get at least the same, if not greater, focus and this will therefore simplify your business enormously.

Repairers and insurers do have a common goal ... repair the vehicle as quickly and efficiently as possible; any gains in business performance should therefore positively impact insurance partners. We've seen, within our client base, that a daily focus on improving repair business KPI's can substantially influence performance against longer term insurer KPI benchmarks.  

The business KPI's you should measure vary by shop. The top two or three opportunities for improvement could be on the production floor, in administrative processes, or financial management. Some thoughts to consider when defining your internal business KPI's are:

  • "K" means Key - a few key indicators. If you have more than 5, it's just a list.
  • Attainable - they must be attainable and track progress against a target daily.
  • Leading - use leading indicators so you can affect change proactively.
  • Change - KPI's will evolve and change over time as you meet your targets.

I fully realize the importance of ensuring your insurance partners' needs are met. I'm not suggesting that they should be ignored; actually, it's quite the opposite. I believe you serve your insurance partners better by focusing on several key areas that improve your overall business performance. As they say during the safety briefing before take-off on an airplane, "please put on your own mask first, before assisting others". 

I will discuss the KPI topic in more detail in future articles. We'll also share some specific areas where we've seen collision repairers make substantial progress. Please let us know if there are any areas you would like us to review, thanks.

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