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Jul. 13, 2009: Trying to fulfill the service department’s potential

July 13, 2009
Filed under Archives

These articles recap some of the opportunities uncovered by Gart Sutton & Associates’ powersports specialists during consulting visits. These are followed by recommended actions that address the issues. Our goal is to provide ideas to help improve your dealership.

Dealership details
This dealership was a start-up for Yamaha in 2005. The store recently added a second major product line. They have a new facility with freeway exposure and reasonable access. They have a good reputation for customer service and maintain good CSI scores. They are located in a “bedroom community” less than 20 miles from a major population center with a market area of more than 1.5 million. Their particular county is considered one of the most affluent counties in the state. By all accounts, this area should easily support good growth for a dealership that carries name-brand metric product lines. In the first parts of the series on this dealership, GSA consultants provided an analysis of the overall dealership and examined the sales and F&I?departments. Last edition looked at the store’s parts department and this one examines the service department.

Analysis
Henry started working as a technician in a motorcycle dealership almost 30 years ago. For the last 15 years, he has been working as a service manager. He also has two years of experience as a service writer. Henry has taken some online classes in service management.
Henry has the aptitude and attitude for this position. He will need some support in order to manage the department more effectively. He will need to develop, implement and maintain the processes to track and measure technician numbers and department profitability. Henry has been writing times in a log to track efficiency and productivity. The importance of installing and using a time clock as a tracking tool was discussed. The importance of ensuring all technician time is being accounted for on ROs also was discussed.
They have been doing some menu pricing and have ordered a service menu board from one of the OEs. However, they will have to develop the application guidebook to support the menu system.
Since they have four lifts for 1.5 techs, they have the potential for good productivity. There is no exhaust system other then opening the shop door. This creates issues with customer access to the work area.
There was a discussion of implementing a reception checklist. This would help them
capture additional service and parts sales at the time of the write-up. In addition to add-on sales, this process will lead to increased customer satisfaction. Utilizing a digital camera with the form will help reduce customer
damage claims.
There were very few signed work orders available. The potential liability and customer relations issues with this were explained. They will immediately begin getting signatures on all work orders and filing the signed work order copies. Henry will familiarize himself with all state laws governing ROs and customer authorizations.
Currently, Henry is only doing follow-ups with service customers that had significant problems. The importance of following-up with all service customers and the potential benefits was discussed.
Henry has been losing management time to handling customer deliveries. He will begin a walk-around training program with the sales staff to enable them to take over this process.

Action Items
Install a time clock and require time stamping on all tech jobs.
Require a signed RO for all customer jobs. Ensure that signed ROs are filed and stored. These are legal documents that are critical for liability protection.
Ensure every job that requires technician time is billed to an RO.
All re-do work on units from the set-up company must be tracked and billed back to them.
Familiarize yourself with all state laws that affect repair orders, including phone authorizations and warranty reimbursement requirements.
Implement a reception checklist. Consider taking digital photos of all units taken in for service.
Strive to achieve a 70 percent gross profit in service.
Work with the sales manager to provide delivery training for the sales staff.
Implement the service menu board and display in the service write-up area.
Ensure customer satisfaction by making service follow-up calls.
Display all technician training diplomas to build value to support your labor rate.
Develop a special tools inventory sheet and do a periodic audit.
Work with all departments to establish a customer path process where unit purchasers visit P&A and Service prior to final F&I.

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