Smart dealers know that the fixed ops department is their best bet for steady, consistent revenue. Yet the majority of service departments are leaving major money on the table. Why is this happening? It’s a perfect storm of a lax inspection process, no accountability and a service-not-sales mentality. In a market where competition is up and ROI is shrinking, you can’t afford to have your service technicians missing opportunities or just picking low-hanging fruit – like brake and power steering flushes – instead of completing a thorough inspection and selling customers on services they actually need. Not only does this approach improve sales, but it also improves customer loyalty and trust. Want to get more revenue out of your lanes? Make sure your service manager can answer these three questions:
1. How many hours and dollars per repair order were recommended last month?
When I ask service managers how much they sold last month, they often give me a gross number. I say, "that’s great, but what did you actually sell?" Most of that just showed up in your driveway and said, "fix me, I’m broken." Most dealerships are not measuring what’s been recommended, what’s been sold and what hasn’t been sold. This is crazy.
Service is a multibillion-dollar industry, but very few service departments are tracking sales. If we look at the sales side of the business, we know exactly what every salesperson has done. How many pitches thrown, how many closes, how many lot-ups, etc. But on the service side, we’ve got nothing. To change that, you have to start looking at service as a sales business. You’re there to sell labor and parts. To grow sales, you have to measure and track what your team is doing.
Let’s say the average car coming in has 80,000 miles, but through measuring you discover your technicians are consistently trying to sell over-recommended services like tire alignments or air filter replacements. This tells me they’re not doing good inspections, they’re missing out on business and they’re irritating the customers. When you measure what’s been recommended, you can start making better decisions and holding your technicians more accountable.
2/ What was your No. 1 recommended service?
This is a wake-up question because the vast majority of service managers have no idea if their technicians are recommending services. If they are, they don’t know what they’re recommending. When we dig into the details and start measuring what’s going on, we usually find the low-hanging fruit again. Technicians are recommending nonessential services the customer doesn’t need. This tells the service manager two things: They’re not getting anywhere near as much business as they should, and their technicians are not doing a thorough inspection. With this information, the service manager can enforce an inspection process and hold people accountable to the process. This creates results.
3. What percentage of your customers received a completed multi-point inspection form last month?
If you say "all of them," you’re fooling yourself. Most dealers put a process in place and believe that it is being carried out. The vast majority of the time it’s not. Consider the case of a large dealer group we recently worked with. The fixed ops director thought a review of the repair orders (ROs) would reveal a complete inspection every time. We only had to look at 14 ROs, and we were done. Few of them showed a complete inspection. The lesson is that management can mandate a process, but that doesn’t mean it’s happening. Consequently, this group implemented a forced inspection process that includes professional customer-facing status reports, and sales went up dramatically. And because they were recommending services that truly needed to be done, they increased customer trust and loyalty.
When your service manager takes the unconventional strategy of scrutinizing the right numbers and puts processes in place to turn your service business into a sales business, revenue will soar. It’s that simple.
Dealertrack can help dealerships get the most out of every customer visit to your service department with our powerful web-based multi-point inspection tool and shop optimization software – ASR Pro - that seamlessly integrates with Dealertrack DMS 2.0.