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Nov. 8, 2010 – The advantages of a menu in the service department

November 8, 2010
Filed under Archives

These articles recap some of the opportunities uncovered by GSA powersports consultants during actual on-site dealer engagements. These are followed by recommended actions to address these opportunities. Our goal is to provide you with ideas to help improve your dealership.
The first part of this series was an analysis of the overall dealership. This second and third parts delved into the dealership’s sales and F&I?departments. The fourth part looked at the P&A department, and this part examines the service department.

DEALERSHIP

This dealership sold more than 500 units last year — at a loss. Their market area (30-mile radius) has a population of more than 250,000. The store has been in business for more than 30 years and has carried many different brands under various owners. There has been a recent buy-out, resulting in an absentee owner with multiple dealerships.
The facility is comprised of several, loosely connected older buildings that have been remodeled numerous times. They are planning to move to a newer facility with freeway exposure as soon as possible.

SERVICE

They do not have a service manager. These duties are covered by the general management team along with Paul, the service writer. Paul has a lot of enthusiasm, is committed to a career in powersports and has a willingness to learn and implement. He has a technical background, computer skills and customer skills and may make a good service manager.
The techs are trained and experienced. They have recently changed tech compensation to flat rate. The department appears to be performing fairly well other than the GP number.
No one was familiar with the state laws that govern warranty reimbursements, R.O.s and repair authorizations. They will be following up on this as soon as possible.
They do use a schedule pad. The advantages of using the one in their DMS system were discussed. This would provide customer and unit tracking to the whole store.
Appearance and shop equipment are sub-standard, but it will change with the new facility. As a result, these issues are not documented here. Special tools are not organized and have not been inventoried. These are expensive and must be tracked to ensure the correct tools are readily available to the techs.
There is no common services menu system, but they have started to develop one. They need to invest the time in building a book of menu services to increase sales and distance themselves from hourly rate discussions. Once the services are documented, a menu board must be created to promote them to the customers. They are not using a reception checklist. This is a huge tool for increasing labor and P&A sales as well as improving customer satisfaction. The form and guidelines were provided. A good practice is to use a digital camera to document the unit condition at the time of write-up in order to avoid controversy later.
They will begin documenting the tech numbers on a daily/weekly basis on the spreadsheet provided. They will provide this information to the techs, so peer management can be utilized. They were encouraged to begin service customer satisfaction surveys as soon as possible. GSA will provide the questions for a postcard to be provided when the unit is delivered.

ACTION ITEMS

  • Charge the sales department retail for all services. This will allow for a true picture of service (and sales) profitability.
  • Raise the gross profit to 70 percent. Tech compensation (not including benefits) should not exceed 30 percent of revenue.
  • Utilize a reception checklist on every write-up to document damage and uncover additional sales of service and P&A. This will provide some liability protection, increase sales and raise CSI.
  • Become familiar with state laws that govern R.O. authorization signatures, phone authorizations and warranty reimbursements.
  • Monitor technician performance daily. Strive for 100 percent-plus efficiency, 85 percent productivity, 85 percent proficiency. Print the spreadsheet pages for each tech weekly and post them to encourage peer management.
  • Develop a menu system for common services. Put these into a binder to be accessed by service writers. Develop a menu board with selected menu services to promote impulse sales.
  • Survey service customers for satisfaction within 72 hours. If not done by phone, provide a pre-paid postcard at the time of pick-up.
  • Measure the first service returns. Implement programs to improve the number and measure their effectiveness. This is your first chance to solidify your relationship, solicit additional P&A sales and retain their business leading to their next unit sale.
  • Provide two lifts for each tech to increase productivity.
  • Inventory all special tools periodically.
  • Post the rest of the tech diplomas in the write-up area to build value. 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 more than 30 years. For additional information on these services, visit www.gartsutton.com.

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