Last month I wrote about Comfort Zones versus Accountability and how many dealers have a different outlook regarding performance standards for fixed operations as compared to those for the sales operations. I hope by now you have started measuring the performance of your technicians and service advisors on a daily basis. Secondly, they should all have goals that require an improvement in their performance so that you, as a dealer or manager, can start moving toward 100 percent service absorption. As I have mentioned before, this requires an adjustment to their respective comfort zones. | |||||||||||||||||
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Those are all fairly simple and straightforward, wouldn’t you agree? Great! Now, let’s look at some of the more difficult ones. To begin with you must determine how many service advisors you need in order to provide your customers with the highest level of service that you possibly can. Here is a formula that works well, but is probably outside of your comfort zone. Total all of your warranty, extended service contract and customer pay repair orders for last year. Divide that total by 12 to get your average per month. Next, divide your monthly average RO count by 21 working days to determine the average number written per day and then divide that daily average by 12. Now you know how many service advisors you need.
Once you have your service advisors working with 12 to 15 customers a day, you must then measure your shop productivity, which needs to be around 120 percent. Shop productivity is defined as the number of clock hours worked by the technician divided by the number of flat rate hours billed on the repair order. Please don’t confuse this with efficiency. Now, it’s time to move your comfort zone again! Once you hit 100 percent shop productivity, you should start aggressively recruiting technicians. The reason being, that your service advisors will stop selling when they don’t have the hours available to sell. Can you blame them? If your comfort zone is telling you that your advisors must generate the sales before you hire another technician, then you have positioned yourself to produce exactly what you did last year and there will be no improvement! I ask you this simple question: “What is it about making more money that you don’t like?” OK, so you agree with me and you want to hire a technician or several technicians, and you inform your service director/manager of your decision. You hear something like this: “Boss, this guy Reed doesn’t understand. You can’t find any techs in this market.” My response is there are technicians to be had in any market, but you must search for them in different ways. To begin with, search for “C” level technicians and not “A” level technicians because that is the skill level of work that service advisors should be selling, (just like the aftermarket does) and the aftermarket is exactly where you should be recruiting. Of course, your profit margin on the “C” level technician is going to be substantially higher than that of an “A” level technician. This sounds like a pay raise for the dealer and that would be a good thing since we all want to work toward 100 percent service absorption. So, do you know the No. 1 reason why managers and dealers do not want to hire another technician? If your answer was: “My technicians will get upset and they might quit,” you just won the lottery! Sounds to me like the inmates are running the asylum.
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Total Warranty Repair Orders for Last Year |
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Total Extended Service Repair Orders for Last Year |
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Total Customer Pay Repair Orders for Last Year |
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Total of All Repair Orders |
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Divide by 12 - Average Repair Orders per Month |
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Divide by 21 - Average Repair Orders per Working Day |
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Divide by 12 - Number of Service Advisors Needed |
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The Number Of Service Advisors You Need
Don Reed - Once you have your service advisors working with 12 to 15 customers a day, you must then measure your shop productivity, which needs to be around 120 percent...
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