|Written by Admin|
|Wednesday, 20 August 2008 05:11|
How to increase the “Sales” in your Service Department
How much potential gross profit is available? $20-$30 per repair order is conservative. What would this mean in a year? For example, monthly customer repair orders: 800 x $20 = $16,000 x 12months = $192,000 per year.
In service, we have access to volumes of information, but does this information really report on the “sales process?” Hours sold per repair order, effective labor rate, gross profit percentages are all closely monitored. But does this tell what level of sales effort is being performed? Is there a “closing percentage” on services sold? The relationship of actual vs. the “opportunity” to sell maintenance and needed repairs is seldom, if ever measured. Over the years, I have heard from many dealers who told me that if their people could just sell more than two hours per repair order, they would be satisfied. Unfortunately, I must argue that if those two hours sold were heavy repairs without any maintenance, a large opportunity would still be missed. In fact, many dealerships have high sales per repair order due to a low maintenance to repair mix. Dramatically increased profits can be found by implementing the measuring processes below:
2. Measure maintenance to repair ratios closely. If service consultant (A) sells regular, needed maintenance to most of his/her customers and is at 1.9 hours sold per repair order and service consultant (B) sells only heavy repairs with little maintenance but has a 2.5 hours per repair order average, who does a better job? If hours sold/RO is the only measurement, (B) is better. If you want your customers to return to the dealership on a regular basis and possibly have less major failures, (A) is better. Note that the technicians that work for (A) are probably more productive and efficient as maintenance work is always done in less time than the flat rate time allowed. In many cases, service consultant (A) will also have more total sales than (B). ROAMS shows how many labor operations were maintenance related and compare this with the repair operations. Compare this ratio among each service consultant. In many cases, what you thought was your best service consultant could be missing a lot of opportunities. Use this information to pinpoint the areas where items are not being presented, and or sold.
|Last Updated on Saturday, 07 November 2009 22:02|