Software
Make Your Numbers Count
By Bob Levins, Angus Performance Advisors
DOES IT FEEL LIKE THE MARGIN FOR ERROR
in your business keeps getting smaller?
If so, you’re not alone.
The world we knew even 10 years ago
is gone. In its place, we wake up every
morning to generally warmer winters and
customers who use less fuel per degree day.
We face greater competition, a shrinking
customer base, rising costs, and fuel price
whiplash.
EVOLVE TO THRIVE
We can complain all we want about
these trends, but it won’t change the fact
that this is our new reality. If we want to
survive in this business, let alone thrive,
we’ve got to figure out how to evolve and
run our businesses better. If there is less
margin for error, we better darn well stay
within the margins. And that’s where your
metrics become so important.
WHAT DO WE MEAN BY METRICS?
When we talk about metrics, we are
referring to the Key Performance Indicators
that help you understand what is really hap-
pening in your business. When the margin
for error is less, you need to get these num-
bers quicker, so you can act faster to correct
problems and preserve your profitability.
In the absence of good numbers,
we are left to manage by feeling, by hunch,
by intuition, by good guess. And that might
have been good enough in the past. But it
won’t cut it now.
PUTTING YOUR NUMBERS TO WORK
A great case in point recently occurred
when a client believed he needed to raise his
service plan price by $50, because he was
losing lots of money in that department.
But he feared an increase of this magnitude
would cause customers to shop around.
So we did some digging into his metrics.
In this case, we focused on his excess call
report, i.e. customers who had gotten more
than five service calls in the past two years,
including tune-ups. This was no easy feat.
Pulling this data from his system, and
then investigating to rule out call backs,
or exclude jobs where a
part had to be ordered, took
much longer than it should
have, but the results were
game changing.
Looking at a sample base
of 50 random customers, he
had a $3,800 loss. But if he
took out just five customers
who were on that excess
call list, his loss turned into
a $2,500 gain. He didn’t
need to raise his price to
an uncomfortable level.
He just needed to get these
customers off of his parts
and labor plan.
As he continued to
analyze his numbers, he
ended up concluding that he should switch
his billing to flat rate, increase his labor
rate, and introduce a new type of service
plan without parts and labor coverage.
He is on track to raise his net on service
by $250,000. But none of it would have
happened had he not started digging into
what his numbers were really telling him.
WHERE DO YOU STAND?
Do you know what your real margin is
on each gallon you sell, so you can adjust
pricing properly, especially as the winter
progresses? Can you tell how much higher
your retention rate is if a customer is on
budget, price programs, service plans or
auto pay? Do you know which advertising
tactics are yielding the best ROI? Are you
able to track your gross profit on service
jobs, to understand why you are making
or losing money? Most important, can you
easily drill down into this so you can draw
accurate conclusions, and take smart steps
to improve things.
That’s what smart companies are doing
these days. Not because they necessarily
want to, but because in today’s world, it’s
what needs to happen.
The good news is that most of this
information is actually logged in your back
office system (ADD, Cargas, Blue Cow,
AWE, Taurus, etc.) The challenge is getting
it out easily and quickly (see the service
plan example above.) These systems were
designed to keep track of transactions,
billing etc. They weren’t designed to turn
your numbers into true business intel-
ligence.
BUILDING A BRITE FUTURE
That’s where programs like BRITE come
in. BRITE takes the information in your
back office system and puts it into visual
dashboards and tables that make it much
easier to manage your business.
It was designed to give fuel dealers
of all sizes the business intelligence they
need to succeed in an increasingly hostile
environment. It makes it easy to see what’s
really happening in service, sales, customer
retention, margin and deliveries. Today. Not
after your month’s end, or after the season.
What used to take days now takes minutes
– without running a single report – because
you can’t afford to wait that long anymore.
Whether you use something like BRITE,
or try to create these reports on your
own, it’s time to unlock the power of your
numbers. If you’d like to run anything by
me, contact me at 877-686-3489, or go to
. Make your numbers
count.
Your dashborad provides metrics at-a-glance.
From the dashboard you’re a mouse click away from the
previously hard to find data that drives your business.
November 2013 • 29
