How ‘Sleepy’ Is Your Service Department? - AutoSuccessOnline

How ‘Sleepy’ Is Your Service Department?

After you check out your service department you will find the problem areas that need to be addressed and possibly form an action plan as to how you can make a difference in the upcoming months.

Is your service department operating at its full potential? If the answer is “no” then compare your operation with the performance levels of the most successful dealers in our industry. — Don Reed, CEO, DealerPRO Training

Take This Simple Test
After you check out your service department you will find the problem areas that need to be addressed and possibly form an action plan as to how you can make a difference in the upcoming months.

SUCCESSFUL DEALERS 

  1. Each service advisor writes between 15 and 20 repair orders per day.
  2. Total shop productivity (billed hours to clocked hours) hits 120 percent minimum.
  3. There is one service bay per productive technician.
  4. The labor gross profit margin is 70 percent of sales.
  5. The customer pays parts gross  profit margin is 45 percent of sales.
  6. The gross profit margin on sublet is 20 percent of sales.
  7. The number of technicians per service advisor is between four and five.
  8. There are two technicians for every support person in the service department.
  9. The number of hours sold per repair order Is 2.5.
  10. Policy adjustments don’t exceed 1 percent of total labor sales.
  11. One item repair order doesn’t exceed 5 percent of total repair orders.
  12. Operating profit is at least 20 percent of gross profit.

How Did You Do? 
First question: How many answers did you not know? Second question: How many answers did your managers not know? To formulate an action plan for improvement you must first realize that you “can’t manage what you don’t measure.” All 12 items listed above should be reviewed and evaluated daily. Your numbers listed above are the results of the efforts of your people, so if you focus on “managing the efforts”of your people daily, your results will improve.

Additionally, to maximize your results you must pre-plan the efforts of your people through daily performance goals. These goals must be given to your technicians, service advisors, service manager, shop foreman and parts manager daily and then evaluated at the end of each day, similar to what you may be already doing in your sales department.

Service Advisors Can Make Your Numbers Great
When it comes to selling to our service customer, the service advisor is where it all starts. Now ask yourself this question: “How much sales training have I given my advisors?” The answer I’m sure is “little to none.”

We must understand that a service advisor is a salesperson and not a clerk. As such, they must be professionally trained how to meet and greet the customer, investigate to determine their needs, select a product that satisfies those needs, make a feature/benefit presentation on the product and ask the customer to buy it.

Sound familiar? In addition, you must embrace the philosophy of all the fast food chains in America. “Would you like to super size it for 50 cents?” By this I mean you must simply give every customer who drives in your door the opportunity to say yes to one additional purchase. Is this not what you do in your F&I department?

For every 10 service customers you ask to buy your product, a minimum of two will immediately say OK, another 1.5 will do so on the second try. That sounds like a 35 percent closing ratio, which in turn will give you a 35 percent increase in customer pay parts and labor sales.

Be a Winner! 
This is exactly what all of the quick lube service centers are doing with their $19.95 oil change customer. Research shows that the average quick lube service center has an average sale per repair order of about $86. That equals an average upsell of about $60 per RO. Multiply $60 times the number of customers pay ROS you wrote in your service department last month, then multiply that number times 12 and see how much additional sales you should be getting in the next year.

To put it in another perspective, this is how much you “lost” in sales in the last year by not training your advisors to super size it.

Let’s review our strategy. First, you must “measure what you need to manage.” Second, you must “inspect and evaluate” the efforts of your people daily. Last of all, you must get your service advisors professionally trained on how to “sell in the service lane.” The results will be there for the dealers who are committed to operating their service and parts departments as profit centers.

You May Also Like

Schaeffler Group USA Expands Product Portfolio

Seventy new parts have been added to the INA, LuK and Schaeffler Bearings portfolios in the first quarter of 2024.

Schaeffler Group USA Expands Product Portfolio

Schaeffler Group USA has expanded its parts offerings for vehicles in the United States and Canada, adding over 70 new parts to the INA, LuK and Schaeffler Bearings portfolios in the first quarter of 2024. These additions expand application coverage to an additional 30 million vehicles in operation, the company said.

Protect Your Hands, Save the Planet! 

Magid introduces the flagship product in its sustainable product line – the GP102 General Purpose Work Glove.

Magid flagship product -sustainable product line – the GP102 General Purpose Work Glove.
Topology and Your Scan Tool

Topology, the term used to describe the design, layout and behavior of a serial databus configuration, influences how you access modules with your scan tool.

Topology and Your Scan Tool
The Evolution of Impact Wrench Technology

The hardest-working tool in the automotive industry has seen its share of updates and evolutions.

The Evolution of Impact Wrench Technology
Unlocking Service Drive Revenue: The Critical Role of Technician Inspections

The true potential of service consulting lies in recognizing the nuanced art of quality inspections and leveraging it to drive success for both advisors and technicians.

Unlocking Service Drive Revenue: The Critical Role of Technician Inspections

Other Posts

Addressing the Technician Shortage with Innovative Training Solutions

Drawing on extensive industry experience, the team at DealerPRO Training has developed a program that exposes technicians to future career opportunities in fixed operations as well as executive positions.

DealerPRO training
Dealership GMs Need Fewer Worries; Start Here: Recon and Appraisal Integrity

How do you manage margin compression? With a focus on predictable outcomes.

Dealership GMs Need Fewer Worries; Start Here: Recon and Appraisal Integrity
Enhancing Accessory Offerings and Car Care Products in Service Centers

By expanding product offerings, identifying top-selling items and leveraging private-label products, dealerships can create value for customers, drive revenue growth and strengthen their competitive position in the automotive industry.

Enhancing Accessory Offerings and Car Care Products in Service Centers
Rislone’s DEF Crystal Clean Helps Get Customers Out of Limp Mode

New product removes damaging crystals from SCR systems and clears P20EE codes.

New Rislone DEF Crystal Clean™ Diesel DEF & SCR Emissions System Cleaner scrubs away crystal contaminants from the selective catalytic reduction (SCR) systems of diesel cars, trucks, and SUVs to cost-effectively restore power and performance.