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Fixed Ops

What's A Service Advisor Worth

Previously, I discussed what it takes to attain 100 percent service absorption in today’s dealerships, by implementing your front end processes in the back end (back bone) of your dealership. In doing so, you must first realize and appreciate what a Service Advisor is really worth.
To begin with, let’s determine what a good service advisor’s profile should be, and then we will determine what he or she is actually worth. First of all, an advisor must have good communication’s skills and should enjoy dealing with the public. Normally, a good technician does not make a good advisor because they think and talk in technical terms that your customers do not understand, which of course is not conducive to high CSI scores or owner retention. Secondly, they must dress like professional salespeople, similar to your sales staff in the showroom. Next, they must be compensated based upon their individual sales performance in areas such as total parts and labor sales, HOURS PER CUSTOMER PAY RO and customer satisfaction. Naturally they must be given DAILY, WEEKLY AND MONTHLY sales goals and receive written DAILY PERFORMANCE EVALUATIONS, which means they must be held accountable for their performance, just like a salesperson in your Sales Department. Last of all, they must be trained in the “ROAD TO A SALE”!

Now that you have recruited a person with good communication skills, compensated them based on their individual performance, dressed them like a professional salesperson and trained them how to become a professional salesperson, let’s look at the results that you can expect to achieve:

1. Increase in sales per customer pay RO

2. Increase in repair order count

3. Increase in CSI

4. Increase in owner retention

5. Customer pay labor gross profit at 70 percent of sales

6. Customer pay parts gross profit at 45 percent of sales

7. One item repair orders at 10 percent or less

8. Increase in “Fixed right first visit”

9. Increase in Technicians’ productivity

10. SERVICE ABSORPTION AT 100 PERCENT

If all of the above sounds like a good thing to you, then let’s now determine what this Service Advisor is worth. Please review the following outline where I am comparing the “worth” of a service advisor to the “worth” of an automobile salesperson.

As you can see by my example, a salesperson must sell about 22 CARS A MONTH to equal the gross profit performance of a service advisor writing 15 repair orders a day at 1.5 hours per RO. Now do the math and you will instantly realize the additional profit potential for this advisor without writing any additional repair orders. For example, 2.2 hours per RO will generate about $60,000 in gross profit and 3.0 hours per RO will produce about $80,000. Your “TOP GUN” on your showroom floor would have to deliver about 44 cars a month to match the performance of this advisor! Remember, a service advisor should be a salesperson, not a CLERK; thereby, enabling your dealership to achieve 100 percent service absorption. In my example, you can see that an advisor is compensated at about 10 percent of gross profit, while an automobile salesperson is compensated at about 20 percent but produces half of what an advisor does!

As a dealer or general manager you should visit with your advisors daily, let them know you care, acknowledge a good job, correct substandard performance immediately and EDIFY these advisors to their customers, managers and fellow employees.

The results will astound you.

Vol 2, Issue 5

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