Now that you’ve discovered ways to generate profits in your dealership with marking up price margins on parts attached to work orders, charging for all diagnostics, posting your hourly labor rate, implementing flat labor rates and offering extended warranties, it’s time to focus on the overall efficiency and profitability your employees generate on a daily basis.
With the help of dealership expert Bob Clements, here are 4 ways your employees can be more efficient and profitable.
1. Keep detailed data in your business management software so anyone in your dealership has the ability to answer questions
We all have that “go-to” person at work that seems to know the answer to every question. But what happens if that person is busy, or on vacation? You’ve just lost valuable time pulling someone else away from their job who might know the answer, and you’ve created poor customer service by making people wait.
In order to help make all of your employees knowledgeable in the eyes of your customers and prevent having to pull employees away from their assigned duties, you need to record detailed information in your business management system. The job of your software is to be that “go-to” person in your dealership, so make the most of this valuable tool. Any employee should be able to look up customer records and answer questions regarding sales orders, service work, and other pertinent information. The more data you have in your system, the more time all of your employees will have to perform tasks that make your dealership profitable.
2. Do not let your technicians look up or pull their own parts
This is an area where many dealerships need improvement. Clements makes it a rule that service technicians do not look-up or pull their own parts. The more time they are away from their service bays, the less billable time they are producing. You need to have your service manager or another employee in place who does all of the parts handling for your techs. A good system is to have a workstation back in your service bays so techs have the ability to create invoices and pick tickets from their working area for the appropriate person to retrieve. This also helps keep your inventory quantities more accurate because there’s a direct process for taking parts out of inventory and recording the data.
We do understand that some smaller dealerships don’t have the resources to assign a particular employee to this specific task. In this case, Clements recommends that you create a second parts location right next to your service techs and conduct inventory counts for those parts on a weekly basis so the numbers are accurate, and your techs always have the supplies they need.
3. Keep your techs operating with an 85% recovery time or higher
Clements states that in order for your technicians to be profitable, they must operate with an 85% recovery time or higher. He measures recovery time as paid time vs. billable time for an 8 hour workday. A break even recovery rate is 75%. If you aren’t at 75%, you are losing money. Clements has seen techs at dealerships work at a 130% recovery rate, so set your goals high.
Your business management software can help you easily monitor these rates if it includes a technician time clock. By having your techs punch in and punch out on work orders, you can easily compile data that will let you know the recovery times of each individual tech as well as your entire team.
4. Reduce amount of non-billable activities for your service technicians
The money generated by your service department is based primarily off the billable work of your technicians. Nothing can be more detrimental to your tech efficiency than having them get sucked into performing tasks they aren’t being billed for such as unloading trucks, answering phones, driving fixed equipment out of the work area, mowing the lawn, etc. A good solution to this problem is to hire someone to do your odd jobs during your busy season on a part-time basis. You could look for high school students, good customers that are knowledgeable about your business, retired people, or someone who is just looking for a couple hours of work per day. The extra money generated from your techs turning wrenches as opposed to doing these odd jobs should justify the cost of hiring someone to do busy work.
Download a PDF copy of the guide here