A dealer principal once told us that when we first walked into his service department it scared some of his staff, so we were curious as to what it was that caused such a negative reaction. His reply was: “Well, you asked a lot of questions.”
We read somewhere that young children ask over 100 questions a day and university students ask about three, so maybe we have two problems. We never went to university and have yet to grow up!
The biggest question is what did we do that caused the staff to panic when we ask a few very basic questions.
You want to know what?
Here are some of the questions we asked that, if we were a dealer principal, we would want to know the answers to at least once per week if not every day.
· How much are you currently leaving on the table?
How many customer-paid work orders were written last month and is the number moving up or down? How many one-item orders were there as a percentage? Some stores are running with over 80-percent one-item repair orders and leaving huge amounts of money on the table simply because they never asked for the business. Or, if they did ask, there was nothing under notes saying customer was due for “C” service but declined.
· Can you give us some idea of the opportunity?
Do you know the average age of your customers’ vehicles and the average odo reading? This number is obviously affected by customer retention and vehicle sales history but well worth knowing. We have statistics that tell us that vehicle registrations have grown significantly along with aging vehicles and higher average odos, so what is the average age and odo of the vehicles in your shop?
· What about maintenance services?
How many oil changes are written in an average month and what is the percentage of tire rotations? Considering that oil changes are still driving the business and are loss leaders, this would seem to be a reasonable question. Once the wheels are off it creates an opportunity to check the brakes opens up other sales opportunities and the sales closing ratio is high when the vehicle is still on the hoist.
· Why are parts sales so low?
What is your fastest moving air filter and cabin filter and how many did you sell last month? Vehicle quality improvements and technology have created a negative impact on the parts-to-labour ratio with some stores running under 60 cents in parts to a dollar in labour. With more customers thinking green and fuel prices high, selling an air filter should be an easy sale. But not if it takes 20 minutes to sell by a flat-rate technician who most times is not getting paid for either selling or installing it. Do your advisors ask the customer, “If your vehicle requires an air filter can we change it for you?” Not such a scary question is it?
· Why the downturn?
For example, It looks like, over the last three months, power-steering flushes have decreased from 33 per month to 17 per month and this month you are tracking for 9. The question is, why?
· Why is one service advisor producing poor numbers?
Another example: we asked why it is that Mary averages 1.8 hours per work order; Joe averages 1.6 hours per work order; and Tom is averaging 1.3 hours per work order. Doing the mathematics, it looks like this: Tom, like the other two service advisors writes around 420 customer-paid work orders each month at o.4 hours per work order less the other two advisors. That works out to 168 hours per month fewer hours X an effective door rate of $98.00 dollars = $16,46. Stated another way, every time Tom writes up a CP work order you somehow lose $39.00 compared to orders written by the other advisors. It is possible that the other two are playing games with Tom, or is there another reason? Here is another nerve racking question: “Do you know the answer?”
Have you had enough questions?
You can probably understand now why some of our questions cause a degree of discomfort, even though this is something that we try hard to avoid and understand that most of the staff we work with work hard, have minimum training and want to improve and do a good job.
One of the smartest dealers we have worked with over the years is a great automotive numbers guy, who has a favorite saying: “Inspect what you expect.” Good advice, but it is likely even he could not answer some of the above questions.
We try our best to put the staff at ease and tell them to relax and have fun working with us, but if you want to know the answers you have no option but to ask questions. Over the years we have been told by more than one dealer principal or general manager: “I stay away from the service department because I never know what to ask.”
We had one funny experience when a general manager was giving a young service manager a hard time. As the young manager walked out of the office he turned and asked the GM, “do you know how to work out an effective door rate?” The general manager said “no” and the service manager said: “Well I do!” And kept walking!
He knew the right question to ask. Do you?
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