My Service Department Profits Are Down This Month Because Business Is Slow!

Sound Familiar?

How many times have you heard or said this?

As a fixed operations trainer and consultant for over 22 years, I have heard it many times as well; so many times, I am compelled to respond to this common response.

A dealership fixed operations is a complex business. It is practically impossible to have every operating system and employee performing at optimum efficiency all the time. Keeping employees on track, trained and motivated is a perpetual process.  Besides repair order count being lower than usual in a month, there can be many reasons why fixed operations are not performing to industry standard levels of benchmark performance.

Let’s Take a Look at Typical Reasons

Do you have an ongoing sales training program for service advisors besides factory training? 

Do you know your service advisor sales closing ratio?

Do your service advisors utilize effective sales closing techniques? Word tracks?

Is there an interactive reception (walk around) process in place?

Is the service advisor interacting with the customer during the walk around?

Is there an effective Point of Sale in place at the front end of the selling process?

Do you have a management designed back end selling process?

Are your customers satisfied with your Diagnostic Estimating Procedure?

Do you have a factory compliant service menu in place with dealer recommendations that is separate from the main content?

Do you track and/or compensate service advisors on menu sales penetration?

Does your service advisor pay plan motivate selling performance?

Do service advisors have a pre-planned sales approach or customized recommendations prior to customers arriving on appointments?

Is your Customer Satisfaction above group average?

Is your customer pay labor gross profit retention at least 75%?

Does service management track unapplied labor time/dollars?

Is your customer pay effective labor rate within 90%- 95% of your door labor rate?

Is your customer pay parts gross profit retention at least 40%?

Does management track labor inventory and technician efficiency daily?

Does service management know what customer pay benchmark sales performance should be and what tech efficiency percentage is required to produce the additional labor hours?

Can the additional labor hours be produced with the current staffing level of techs?

What technician efficiency should the shop be producing at?

Are you scheduling customers out in excess of three days or more?

Do you have an effective Active Delivery Process in place?

So…What Did You Discover?

If you answered “NO” for two or more of these questions, you should probably worry less about traffic and more about training, systems and processes. While I am not suggesting that increasing traffic is not important, the lowest hanging fruit to potentially increasing tens of thousands in additional profits per month may be right in front of you. Effective operating systems and processes will help traffic in the longer term in addition to marketing and follow up systems.

Sheriff 5-Star Fixed Operations Consulting has proven for over 22 years that while you may be spending thousands per month advertising and discounting to attract customers, the operating systems within the department may not be conducive to acceptable levels of selling performance and gross profit retention.

Retail atomobile dealers deserve a realistic return on their investment.  No More, No Less! Many dealerships have significant financial opportunities just by attaining a realistic industry benchmark level of sales and gross profit retention performance. Sheriff 5-Star clients experience additional fixed operations profits of tens of thousands of dollars per month following the implementation of operating systems and training. The assessment and training required is specific to the every dealership client.

Contact us for a free assessment on how much money you may be leaving on the table every month by not attaining industry standard levels of performance.

Visit us on the web for more details and Typical Dealer Results at Fixedoperationsconsulting.com

John Sheriff is owner and founder of Sheriff 5-Star Fixed Operations and Consulting. He has consisitently generated proven results by increasing fixed operations profits and customer satisfaction for all domestic and most import retail automotive dealerships for over 22 years.  John has presented as keynote speaker for Ford Motor Company fixed operation seminars, Dealer 20 groups and automobile accountancy firms.