Automotive & HD Business Management Articles.
Bob Greenwood. September 3, 2014. ( over 4 years ago ) 962 views
Many shops carry on not realizing potential little overlooked things that really may help their bottom line… things that can provide additional cash for re-investment and/or distribution to staff.
1. Consider the approach at the front counter. Many service advisors have been hired to just make a sale or are told to promote certain menu packaged items. It’s almost the approach that says, “find anything to keep the back tech’s busy”. This can create activity for the shop but not necessarily bottom line results as well as customer mistrust. What‘s been overlooked? We’ve found that “transactional management” works much better. Slow down, visit with each customer/client in terms of their needs. Review previous inspections and vehicle history in terms of missed maintenance that was recommended by the manufacturer; review current manufacturer recommendations by printing them out for the customer to read and allow for proper discussion. Build your customer relationship. Focus fully on each individual client right now rather than think of who’s standing behind that client. If the shop is continuously too squeezed for time to meet with the customer properly than perhaps a study of the processes should take place as to whether additional front counter staff are required. Consider 1 Service Advisor per 2 or maximum 3 Technicians.
Also, review how much of the customer’s business the shop is really receiving. Is the shop looking after all the household vehicles? Why not all vehicles? When one vehicle is consistently in the shop for service, we know the basic trust business relationship is in place, however, if the shop is missing other available vehicles, then it would be wise to explore “why?” Client understanding is reality so it may be wise to explore what misunderstanding as to why you’re not getting all the home fleet business, business that can provide additional profits when obtained.
2. Consider managing the clients’ vehicle for them based on how many kilometres they drive per year, whether the vehicle is leased/owned, how the vehicle is generally used (city, highway or off road driving), and what the clients expectations are with the vehicle. Using the latest software available, set up all service intervals by date based on the mileage driven. When the mileage is entered with each visit, all date intervals are automatically adjusted. This is the “service on need” business model that’s now entered the aftermarket. For example, this is June and the next service level should take place in September. “What’s best for you Mr/Mrs./Ms client… early September or late September? Late September you say, no problem and don’t worry about that, we will take responsibility and contact you a few days ahead of time to arrange an appointment that works for you. By the way here, for your record, is a copy of what the manufacturer recommends we should be doing in September based on how you use the vehicle.”
Managing the client’s vehicle and executing the business in a similar format to a dentist’s office is not a bad thing, in fact it can be refreshing to the client to actually experience a shop who truly cares about their situation.
3. Discuss with the shop’s team business billed hours objectives, labour dollar goals and customer desired results before you open in the morning. Consider installing a white board in the staff room listing things so everyone can visually see the business items and objectives discussed as a team. Staff feel better when they’re respected and part of the business. When objectives are displayed, and results reported to the staff each day, productivity of the shop increases and business pride is instilled. Positive increases and results will produce more net profit dollars for distribution within the business.
4. Consider detailed use of time cards in the shop by tracking time for each service being performed within the total job rather than just the total job itself as most shops do now. This more detailed tracking of all services helps the front counter to bill properly. It also can increase the communication level between the technician and the service advisor. When the service advisor invoices properly, and can explain each service level in detail to the consumer, more dollars appear for distribution. To accomplish that properly, the technician must provide the facts to the front counter. A simple example would be “we didn’t meet the required time because of two seized bolts”. Without the detailed facts on each service being performed, the service advisor either misses billing opportunities or guesses. Either way the entire shop loses.
It may be a worthwhile exercise for shop management to closely look at many daily routines to ensure efforts have been made to maximize the results for the business. Sometimes we all take little things for granted and when examined closer, we discover profit opportunities that were always there but never really detected.