In terms of our preconceptions of data, we are aware that a lot of the data that we have at our fingertips is sales oriented. Showing us our profits and losses in a clearer form. However, what we don’t always think about is that there is so much more than sales data! The power of data can actually give us the ability to structure the way we want to run our businesses
Before we begin, we must address the elephant in the room, COVID-19. We are in 2021 and it is evident that COVID-19 is not going away anytime soon. So, how do we proceed and how does data help us with that? We know that driving traffic has decreased so shouldn’t the number of vehicles being repaired decrease as well? The short answer, yes. Although this industry is very fortunate to be considered essential during this pandemic, it has definitely affected the way work is performed and the volume of repair orders being completed.
One thing that Rebecca did have the opportunity to touch on was that fortunate for the usage of data in this sector, it gives the body shops the opportunity to be proactive rather than reactive. Not that anyone could have predicted a global pandemic but those watching their data could tell a lot sooner when they were going to start to run out of work. Therefore, minimizing the overall impact that COVID has had on their business. The proactive approach that many shops have used is trying to bring in more sources of work or restructuring their organization. Whether it be customer pay jobs, fleet work or in some cases, making difficult decisions to let some staff members go.
AutoHouse is fortunate that they have not experienced a huge impact on the way they interact with their customers. Leading them to be able to connect with customers who now have more time to be engaged with their business. AutoHouse has noticed an increase in engagement amongst clients as they have taken the time to get a better understanding of what their data is telling them.
The next question Jarred asked Rebecca’s was: What is on page one of the AutoHouse Handbook? Meaning, if you are not going to do anything else, what is the one thing you should do? Rebecca responded saying that it is not one specific thing because every client’s needs and where they might be starting is different from the next. However, the first thing they do with a shop is an initial assessment of the shop’s data. Historically from that preliminary assessment the number one issue for the shop’s is compliance with the data management system. This issue usually stems from shop’s not using their data management system to their full capability. This is crucial as their data will not reflect what is happening on the floor and the overall value of the data is diminished.
For a shop who wants to start their journey with AutoHouse, what is the most common mistake they see or what does a client need to do to make the most out of the relationship? The answer is that everyone is looking for an easy button or an easy fix but there isn’t one. Truthfully, AutoHouse will give you the tools but the client needs to be ready to put in the work to create results and value. The other mistake is the complete opposite. The client is overly excited about the changes that are going to be made that they bite off more than they can chew. Rebecca’s advice here is to focus on one or two small changes rather than five or ten. Once the client has perfected the first one or two changes and these changes are now rooted in their everyday practice, that is when AutoHouse knows the client is ready to move onto level two of the changes.
What are the key KPIs that AutoHouse focuses on?
The central KPI that seems to be the focus of every aspect in the shop is … touch time! What is touch time? It is the average number of hours produced per day for an RO. So, you take the total number of hours of that RO and divide it by the cycle-time, which is the time between keys-to-keys. For example, if a vehicle goes in on a Monday and out on a Friday with a total of 15 hours, then your touch time is 3 hours per day. Weekends are included in that average as well so it can push the touch time down a little bit. By focusing on touch-time, AutoHouse is able to cover other efficiencies in the shop.
With this in mind, how do you teach those clients who are starting at ground level how to use the data they receive effectively? Rebecca explains how this varies from role-to-role. For example, if they are training a shop owner vs a Customer Service Representative, the training will look different. If training a CSR, they may begin to talk about date compliance, marking their dates, scheduling the vehicles in, scheduling vehicles for delivery, etc. For shop owners, areas of examination will be their average output per day, their optimal WIP level and other similar areas that all contribute to their efficiency and profitability.
Wait. What is WIP? WIP stands for Work in Process and is calculated by everything that is on-site at a given period in time. There are many different thoughts around this however, anything that has arrived and has not been completed, delivered or closed, they consider to be a WIP.
Rebecca explained that there have actually been studies on shops with high touch times versus shops with low touch times. The result of those studies was that shops with higher times also have a higher gross profit. To be subjective, we can’t assume that this is a direct cause but what we do know is that shops that are more efficient can get the vehicles out of the door faster which proves to be more efficient across the board.
“Shops with higher touch times also have a higher gross profit”
Let’s assume that now a shop owner has all of this data information at hand. How would they utilize it to get the most out of their team? The most effective way to use this data is to have everyone engaged with it. With that being said, that doesn’t mean that all data should be pushed down to everyone because that would create an information overload. What it does mean is that every person should have role specific reports. In addition to that, visual display dashboards in the front office or on the shop floor are another useful tool that are used to align the team towards the same common goal. The data findings are intended to change behavior therefore having a visual of the goal right in front of the team is a big motivator. Another way to engage the team with these goals is to create incentives around it. In Rebecca’s career she has seen great success with people who have pushed their whole team to understand their specific tasks and how it relates to the overall goal.
Let us now compare and contrast between two extremes. The first is the business owner who does everything right with data. They have invested in it, gave it to their team, created targets and incentives. Versus those who have not done any of it. From that comparison, what has been the result during the pandemic with these two extremes? Ultimately, no one was prepared or could have predicted the pandemic however, the shops who don’t keep tabs also don’t have predictability. They are not going to see the issues until they are happening or until it is too late.
AFRAID OF NUMBERS?
How do you deal with clients who have a fear of numbers? How do you help them to understand that the data can be more straightforward than that? Rebecca explained that it is very important to assess the client’s degree of comfort level. The main thing to do is never overwhelm them with large amounts of reports at once. Just sending them really specialized data reports is a great first step. After that, they can start the conversation about the smallest change that can be made that would have the greatest impact on the organization. Once this change has been implemented, following up is crucial to distinguish progress. They can determine if the plan is working or not and see if they need to make a new plan from there. Rebecca used a great analogy and compared this process to starting a fitness journey. If you decide that tomorrow you are going to work out for an insane amount of time and eat perfectly after doing nothing before, it is not going to work. If you take one small incremental step overtime towards one goal, then you will find greater results.
Who Should Use Data?
Is there a qualifier question that AutoHouse uses to assess a client and determine if they need your help? The reality is that everyone can use reporting to some degree. Whether you are a shop that has got it all together or one that is struggling. The company would start at a different level with you based on where the shop was at. Admin is the first thing, then looking at WIP, then touch time. There is always room for improvement.
ABOUT AutoHouse Technologies
AutoHouse technologies is the leading provider of business intelligence software in the North American Collision Repair industry. Rebecca’s position in the company is to work with shops to unlock the power of their data. Meaning, going through and analyzing a company’s data to uncover what it is telling them. Through that analysis they come up with areas for improvement that always lead to profitability and efficiency.
In terms of our preconceptions of data, we are aware that a lot of the data that we have at our fingertips is sales oriented. Showing us our profits and losses in a clearer form. However, what we don’t always think about is that there is so much more than sales data! The power of data can actually give us the ability to structure the way we want to run our businesses.