Synergies are the key to solid service business
When it comes to generating sales per work orders, just how many bites of the apple do you get? Another question might be: do you really care? Generally, there are three areas of opportunity for producing solid average sales per work order. But for it to work, all the staff have to be singing from the same song sheet if you are going to get consistent results and build customer trust. “We are talking about synergy.”
QUESTIONS AND ANSWERS
A good, well trained customer appointment coordinator should produce an average of at least two lines per repair order, providing they ask the correct questions to the customer.
For example, many customers telephone in just to book for an oil change. Ideally, the coordinator will bring up the computer maintenance screen and ask the question: “How many kilometres are on your vehicle now?” The conversation might then go something like this: “At this mileage we recommend a 50,000 km maintenance service which includes XX and is menu priced at YY!” Well trained professional appointment coordinators often have information in front of them with the features, advantages, and benefits of the recommended services.
Asking the question, “Will you be requiring a ride somewhere, or will you be leaving the vehicle with us?” also makes a lot of sense. We have lost count of how many dealerships tell us they have too many waiting customers, often because they ask the question: “will you be waiting for that?”
Managing by objectives works, so we recommend having goals posted on the wall for how many outgoing calls and how many appointments are made daily.
DOCUMENTATION GOES A LONG WAY
A good service writer / consultant / sales person has a lot of different job functions, but one of them is not pre-judging if the customer will buy additional recommended services, even if the service history shows only oil changes.
Still the number one reason we fail to get the business is because we don’t ask for it, even though the customer is expecting recommendations. Here is an interesting example. We have worked in dealerships where in the last few years they have done a great job in selling tires, but have seen a decline in wheel alignments.
Sometimes, service advisers claim they have recommended an alignment but the customer declined. Our question is did you make a note of that on the work order? If the customer returns in a few months with premature tire wear, there is nothing like documentation that a wheel alignment was recommended. We know that a professional walk and pop sells more work, but the number of dealerships doing a good job appears to be few and far between.
EFFECTIVE SHOP OPS
Ask any technician if they do a good job with both vehicle inspections and estimates and they invariably say yes, but in reality the correct answer often should be no! Unless of course they are calling for brakes and rubber stamping the estimate sheet. Ask your management or the service advisors a question along these lines: “out of the 10 technicians you have in the shop how many consistently do a good job of looking for legitimate additional work?”
The answer we get is around two, which is crazy when you take into account that the closing ratio on recommendations from the technicians is often over 70 per cent. It also appears that the amount of dealerships that measure the incremental business from the lubrication rack is close to zero, even though oil changes are still driving the business.
YOU HAVE TO SEE IT TO MANAGE IT
We have nothing against fancy and expensive computer systems that can produce endless reports, or out-of-house customer retention companies. But there is nothing like doing a visual review of work orders to see for yourself how the service department is performing and how much money you might be leaving on the table.
WORK ORDER REVIEW
Look at a sample of 200 repair orders that have customer paid labour and review the following:
Vehicle age:
• What percentage of vehicles were under one year old?
• What percentage were between one to two years old?
• What percentage were between two to three years old.
• What percentage were over three years old?
Recorded kilometres:
• What percentage of vehicles were between zero to 20,000 km?
• What percentage of vehicles were between 21,000 km to 30,000 km?
• What percentage of vehicles were between 31,000 km to 40,000 km?
• What percentage of vehicles were over 40,000 km
Lines per work order:
• What percentage of work orders had three lines recorded?
• What percentage of work orders had two lines recorded?
• What percentage of work orders recorded only one line?
Think it is not worth your time? Then think about this as an example. A medium-sized service department writes approximately 45 customer paid work orders per day X 21 working days = 945 orders a month.
So let us suppose that by doing the review and discussing your findings with the staff, the hours per order increase by an average of .2 hours per order. The results would be 945 orders X .2 = 189 hours X an effective door rate of $90 = $17,010 additional dollars with a gross profit of 70 per cent = $11,907 for the month or $142,884 for the year. How many new cars do you have to sell to make that much gross profit?
SHARE YOUR RESULTS
We recommend you share the results with the staff. Just the fact that they know you are looking can get instant results. Keep the high mileage one-liner work orders to one side and use them in a meeting to point out lost opportunities, but try not to use them as a stick. Your work orders are a mirror image to what finishes up on the financial statement. There probably are dealerships out there that are performing at capacity— but we just haven’t come across any yet!
