You need to be on top of your department’s exception report every day.
Profit In The Service And Parts Departments
is not a happy accident Follow these deliberate and calculated steps to manage your way to net income. BY MICHAEL ROPPO
P
rofitability rarely happens by accident in our industry, at least not when everyone in each dealership department pays close attention to the critical performance indicators that drive their business in any economy. I call this “intentional profitability,” which is a planned, management-driven process. It is operating your department or dealership like entering a race – a race you intend to win. The hardest parts about running a service business (in which people are the revenue-generators) are communicating expectations and managing people and processes with integrity, over and over again, without coming off as a dictator. Repetition is the mother of skill, and a laser focus on the activities below will help you to generate more profitability in the service and parts departments “intentionally.”
30 Service Drive SEPTEMBER 2015
KEY SERVICE DEPARTMENT ACTIVITIES � Review the service exception report daily. Exception reports help decision-makers (managers) save time, so the managers can move swiftly to resolve potential problems and profit leaks. � Try to eliminate one-line repair orders. One-line ROs are a good indicator that service advisors are just taking orders and may need some training or guidance on more effectively selling services. � Train your service advisors to sell suggested and required repairs and needed services, on a regular basis. The principles here are to offer
suggested repairs in order to persuade the customer to set up the next appointment, and to get the required repairs taken care of during the current visit. � Consider implementing a pay-for-performance plan that will help all advisors be more forward about presenting suggested and required repairs to every customer. When those repairs are needed, that is! Presenting additional valueadded services should be both a general goal and a performance metric for your advisors, as reflected in their pay plan. They should be compensated based on appointments set, effective labor rate retention, hours sold, highest sales and gross producer, etc.
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