“In many dealerships there seems to be a ‘demarcation line’ that runs between variable operations, (new, used, F&I, special finance) and fixed operations, (service, parts and collision center). When you cross that line, the word ‘selling’ takes on a whole new meaning. So let’s talk about the ‘Art of Selling’ and how it should apply to your entire dealership.” — Don Reed, CEO, DealerPRO Training
Measuring Front-End Success …
To begin with, we all expect our salespeople selling new and used vehicles to produce sales and gross profits at the highest possible levels. We measure their performance daily in terms of the number of sales opportunities, demos, write-ups, T. Ex.’s to managers as well as to the finance department.
We then evaluate them based on their performance in relationship to the goals we expect them to achieve. We would normally do the same for our F&I producers. We take it further up the ladder and perform the same evaluation of our sales and F&I managers on a daily basis.
Is The Back-End Any Different?
Now let’s cross over the line to fixed ops and ask ourselves how we are evaluating the sales performance of our technicians, service advisors, service managers, parts counter people, parts managers, body technicians, painters, estimators and collision center managers.
We know that just like the sales departments, we must measure what we are trying to manage. We are trying to manage a department to achieve maximum sales, maximum gross profits with minimum expenses to achieve maximum net profits.
Fixed Ops Metrics
Here is a simple checklist for you to use in evaluating the performance of your fixed ops team in order to maximize your service customer pay parts and labor sales.
- How many phone calls are coming into your service department each day? (These are called “phone ups” in the sales department.)
- How many of those phone calls result in an appointment?
- Do your advisors offer an appointment to 100 percent of the callers?
- How many repair orders do your advisors write per day, including quick lube, warranty and customer pay? (These are called “floor ups” in the sales department.)
- What are your advisors averaging in gross profit per RO? (This is similar to gross PRU in F&I.)
- What percentage of your advisors’ repair orders have an upsell for preventive maintenance? (This equates to the “closing ratio” for your salespeople.)
- Do 100 percent of your warranty, quick lube and customer pay customers participate in a walk-around of their vehicle at the time of write up? (Similar to a feature/benefit presentation on the showroom floor.)
- Do your advisors give each customer a personal active delivery of their vehicle?
- Are 100 percent of your customers offered an appointment for their next scheduled maintenance? (Do you insist on 100-percent turnover by your salespeople to the F&I department?)
- Are your technicians inspecting every vehicle for needed repairs?
- How many billed hours did your technicians produce today? (Similar to number of units sold today.)
- How many hours did your service department have available to sell today?
- What percentage of your customer base is active versus inactive?
- How many “no shows” did you have in service today? (Your sales department would call everyone of them to reschedule.)
- Do I have any recalls sitting in my used car inventory?
How to Build Success …
OK, I’ll stop for now, but I hope this makes sense to you. The meaning of selling is the same in the “backend” (backbone) or your dealership as it is in the “frontend,” yet many of you are perfectly willing to tolerate underachievers in fixed ops whereas, in variable operations the underachievers are either trained on how to better perform or they are replaced quickly.
Most dealers have good people in fixed ops, they just don’t give them the necessary tools that they need to become top performers. Tools such as computers, point of sale merchandising, advertising budgets, shop equipment and, of course, sales training.
If you are willing to commit to training your entire fixed operations team how to effectively communicate with every customer on every phone call and at every visit you are well on your way toward creating a culture of salesmanship within your entire organization, including fixed operations.
The benefits include increased CSI, improved owner loyalty, a positive ESI (which undoubtedly leads to 100 percent service absorption and record net profits.
It’s time to start your checklist. You can’t manage what you don’t measure!
