KPIs & Benchmarking

How do you improve your company’s performance against an industry benchmark? The recipe is simple: 

  • Determine the Rating Factors that are used to establish the Benchmark 
  • Assess your company’s ability to compete on each Rating Factor 
  • Write High Leverage Policies and Procedures that maintain and improve your competitive Rating Factor performance 
  • Define the KPIs that will be used to manage the performance of the High Leverage Policies 

Focusing on the KPIs will drive the Rating Factors that drive the Benchmarking Performance. Here is an everyday example of how this works: 

JD Power benchmarks Customer Service for Vehicle Owners. Their surveys cover dealerships, aftermarket service chains, and independent garage and repair shops. 

Customer Service is rated based on the following factors: 

  • Overall Satisfaction 
  • Service Installation 
  • Service Advisor 
  • Vehicle Pickup
  • Service Facility 
  • Service Quality 

Analyzing Performance

It is no surprise that luxury vehicle brand dealerships are consistently at the top of the Customer Service rankings. At the same time, independent garage and repair shops also perform well. 

Independent garage and repair shops scored 5 out of 5 in the Vehicle Pick Up Rating Factor. Their lowest Rating Factor is Service Facility, where they score 2 out of 5. They score 4 out of 5 on the remaining Rating Factors. 

An independent garage and repair shop has policies and procedures for Service Initiation, Service Advisor, Service Facility, Vehicle Pickup and Service Quality. The question is which of these policy groups creates the most leverage and contributes most to maintaining and improving customer satisfaction? 

JD Power bases the Service Facility Rating Factor on ease of driving in and out of the service facility, facility cleanliness, comfort of waiting area and amenities offered. Independent garage and repair shops would have to invest a lot to improve their 2 out of 5 Rating Factor in this category. Making such an investment would be a low leverage policy. 

How to stay competitive

On the other hand, independent garages and repair shops can compete all day long on the Vehicle Pickup Rating Factor. To stay competitive, their Policies and KPIs should mirror the JD Power basis for this factor. The time it takes to process a pickup, keeping charges fair, and staff helpfulness. They need policies for the other Rating Factors, but the primary focus needs to be on the Vehicle Pickup Policies and KPIs.  

Contact us at Rise Advisors for advice on your company’s benchmark performance improvement programs. At Rise Advisors, we serve owner-managed companies and draw on our 40 years of experience to help you write the High Leverage Policies and KPIs that will improve your Benchmarking Performance. 

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Next in the Rise Advisors Master Series on KPIs: KPIs, Financial Ratios & Financial Statements 

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Rise CPA provides professional accounting, tax and business advice to help you make the right decisions at the right time. Since 1979, we’ve been helping clients create businesses and lifestyles they envision by delivering expert insights and financial guidance. At Rise, we excel at advising business owners and their families in a caring and personal way. Our services cover a wide range of Tax Planning, Auditing, Accounting, Estate Planning, and Business Advisory. Please call (604) 936-4377 or use the online contact form to book an appointment with one of our accounting professionals.