I can’t imagine many people answering NO to that question. If you did, please contact us immediately and tell us about your success! All joking aside, in most cases CP Hours per RO are an area of opportunity for increasing Gross Profit, as well as increasing shop morale, and increasing just about everyone’s paychecks. What I mean is, a lot of Service Departments have room for improvement in Hours per RO.
In a high volume dealership I worked at, I was struggling with consistency from my advisors. There were one or two that would/could sell everything to everyone, and there were several that couldn’t seem to keep their sales in guide for any consistent period of time. I always thought of how much Gross Profit was lost every time a client sat in front of one of those lower producing advisors. After all, what do you consider an acceptable spread between Advisors regarding Hours per RO? 3 tenths, 5 tenths, 7 tenths, 1.0 hour? The law of averages tells us that through the course of an entire month, the advisors all have roughly the same opportunity to sell. If there is a large gap between advisors in Hours per RO, they are likely not following a process you want them to.
How can we increase our CP Hours per RO? Some of the most common answers are: “get the advisors to sell more”, “get the techs to do the MPI’s”, “get customers off of just oil changes and sell a packaged maintenance”, “sell more 30K’s”, “we need more heavy duty work” … and the list goes on ad infinitum. All these answers are correct by the way. But just HOW can you get any of these solutions to work? That’s the challenge! We’ve all been there, having a shop meeting getting everyone focused, requiring Advisors to perform the walk-around, requiring techs to do the MPI’s; generally compliance will last for a few days to a week without any follow-up or someone holding them accountable.
In Service, we have 3 points of sale:
1. Prime Item (whatever the client is coming to us for).
2. Captive Sale (recommendations by the advisor based on the walk-around, vehicle history, mileage, vehicle condition and menu presentation).
3. Additional Service Request or “ASR” (anything the technician finds and we offer the client, usually as a result of the MPI process).
Only the Captive Sale and ASR are considered controllable, the prime item is what it is; the client could be coming to us for any number of things, squeaks, leaks, a warning light on, maintenance, etc. we have no control over that. In this newsletter we are going to discuss a very effective process you can put into place immediately to increase your CP Hours per RO. This process deals specifically with the Captive Sale.
We call this process the “Service Manager Recommendation” process. If the process is followed it will have a profound effect on your clients, resulting in greater trust, consumer confidence and overall retention. Advisors will be prepared for each scheduled client; they will be armed with all of the items the client requested as well as a Service History review with recommendations from the Service Manager. This process carries a great deal of value to the client. Let’s face it; by and large people are on the defense when they come in to a dealership for service. Imagine if you were greeted by someone who was expecting you, knew why you were there, and provided helpful advice about your vehicle that was researched by the Service Manager before you even arrived!
There are many different DMS’s out there, all of which offer a “pre-write” option for appointments or reservations. Of course the first step is to get the reservation in the DMS and not just written down in a scheduling book. Next the Pre-writes should be printed every afternoon for the following day. Someone (an appointed person) will review each pre-write for any open Recall Campaigns, after that is complete the stack of pre-writes goes to the Service Manager. The SM will look at each vehicle history, quickly determine the approximate mileage the vehicle will be at during the visit and look for any previously declined services. We suggest using a half page check sheet similar to this:
Tim, our Service Manager reviews every client’s Reservation prior to their arrival. Based on your vehicles mileage, age, and maintenance records the Service Manager recommends the following maintenance be performed on your vehicle:
__Minor Service __Brake Fluid Service
__Intermediate service __Coolant System Service
__Major Service __Transmission System service
__4 wheel alignment __Power steering System Service
__Induction service __Other:_______________
The advisors can use the word track on the sheet or something similar to present these recommendations. If a recommendation is approved it will be added to the RO, if it was not, then it will be added to the RO as a declined operation. The point here is there will be consistency in what is being presented to your clients regardless of who waits on them. Additionally, for timid advisors, this takes the heat off of them, because they are not trying to sell someone something, they are simply relaying a message from the Service Manager. For overly aggressive advisors this process lets clients know they aren’t being sold something they don’t need because it’s the recommendation of the Service Manager.
In a perfect world we wouldn’t need to do this, but that simply isn’t the case in most instances. The process generally takes about 1 minute per Pre-write, so if you have 30 appointments, it will only take about a half hour to complete, most likely less than that though. We have seen real proof time and time again from struggling dealerships that this process increases Hours per RO, most of the time, the difference is noticeable immediately! Is an increase of 0.3 – 1.0 Hours per RO worth 30 minutes of your time every day? I hope so!
The last part of the process is the part where we “inspect what we expect”. Each day have the cashier bring you all of the CP RO’s for a quick review. Quickly review each RO for your recommendation sheet and corresponding labor line on the RO. Remember, there should either be a sold labor operation or a declined operation. If something is missing ask why, you will likely only have to ask a few times before they comply. This will be our indicator that the recommendations were made to the clients. This auditing process can also be used to make sure any recommendations from the technicians were addressed with the client.
Remember, we have an obligation to inform and educate our customers about their vehicle’s needs. These are not “hard sale” tactics, they are based on the core principals of our obligation to our clients. However, if applied, they can be VERY effective in increasing your bottom line.
Rob is President and Founder of Fixed Performance Inc. which he began over 15 years ago. His passion for customer care and helping others has assisted hundreds of dealerships with their fixed operations performance. His common sense coaching and training lifts people up as individuals and team members. With over 30 years of dealership management experience, he understands and respects the daily challenges of fixed operations. Placing a strong value in people and best practice processes always provide growth. His articles have been published regularly in national publications and weekly newsletters are read by thousands.