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Jun. 14, 2010 – Service department quandaries resolved

June 14, 2010
Filed under Archives

These articles recap some of the opportunities uncovered by our GSA Powersports Consultants during actual consulting visits. These are followed by recommended actions that address these opportunities. Our goal is to provide you with ideas to help improve your dealership.

Dealership details

This small dealership is in a market area containing around 150,000 people within a 50-mile radius. This number increases considerably during the summer months because of the large number of seasonal lake homes in the area. They sold just more than 200 units in the past 12 months.
The current owners are powersports enthusiasts who were customers of the original dealership. After the buyout, they built a new facility on a state highway with good traffic volume. They also acquired an additional major powersports product line.
Since they are not visible from the freeway, they have used billboards located near the freeway off-ramps to help draw additional business. They have sold their other large, successful (non-powersports) business and have good capital to back the dealership.
In the first parts of this series on this dealership, we analyzed the entire store’s operations, the sales department, the PG&A department and the F&I department. In this edition, we’ll report on the service department.

Part 5: Our GSA Consultants report on their analysis of the service department.

They do not have a service manager. They only have a “C” tech, which has resulted in come-back issues. They need to take swift action to prevent this from creating a bad service reputation. A high-quality tech with some management ability needs to be hired very soon.
They are not billing for what work they are doing. They also are not billing much per R.O. Part of this is because they do not use a reception checklist to drive additional sales of labor and P&A. This tool also will help increase customer satisfaction. More necessary repairs will be uncovered during the write-up, resulting in fewer phone calls asking for authorization for additional repairs.
Although they have a time clock, they are not accurately measuring productivity, efficiency and proficiency. They do not track first service returns. There are no lifts, and the tech works on the ground. Lifts will increase efficiency and be required by any quality tech they hire.
They do not use a schedule pad or spreadsheet. Doing this will reduce confusion and add structure. There is no signage for the write-up area (parts counter), and no waiting area for customers with units in for service. Sending out service follow-up surveys would help them uncover deficiencies and resolve customer issues earlier.
They have started to do some menu pricing, but they have no signage to support and market this. They need to develop a book of common menu services with prices for the service writer to follow.
They need to become familiar with all state laws that affect dealership operations. For service, this includes repair authorizations, phone authorizations and warranty reimbursements.

Action Plans:

  • Acquire an experienced, high-quality tech/manager. The new service person must be able to take control of this department.
  • Ensure all ROs are signed in accordance with state laws governing RO authorizations. No work can be performed without authorization.
  • Track tech efficiency, productivity and proficiency. Provide these numbers to the techs.
  • Monitor and attain at least a 65 percent gross profit.
  • Raise the hours per RO average to 2.
  • Log all comebacks. Charge the tech back for labor paid on a comeback.
  • Acquire, inventory and maintain required special tools.
  • Utilize a reception checklist to increase customer satisfaction and maximize parts and labor sales.
  • Establish and post a minimum shop charge (typically ½ hour). Use common sense in applying this charge.
  • Develop a menu pricing system for common services. Create an employee binder with pricing for all models and common services. Promote this with “generalized” menu signage or use a flat screen with PowerPoint.
  • E-mail or mail surveys to all service customers within one week of pick-up.
  • Measure the percentage of first-service returns. Implement programs to improve this (coupons, scheduling at time of delivery, etc.). Track the changes.
  • Begin consistent use of a service scheduling system – use the pad or the computer.
  • Develop signage to indicate the service write-up area.
  • As technicians are trained, post their diplomas on the wall near the write-up area. This will help build value to justify your labor rate. PSB
    Gart Sutton has been a leading provider of on-site dealer consulting, dealer 20-groups, online financial composites, accounting rescue services and OEM and dealership training solutions for nearly 30 years. For more info, visit gartsutton.com.

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