2023 Dealership Service and Parts Department Best Practices
Performance Metrics You Should Be Tracking
Are you a service or parts department manager wondering what dealership performance metrics you should be tracking in 2023? In this blog, we outline some key metrics you should be tracking, with the help of industry experts with 20+ years of experience.
After speaking with Bob Clements of Bob Clements International we’ve put together a list of key metrics each service and parts department manager should be tracking on a regular basis.
Dealership Parts Department Best Practices – Metrics for Parts Department:
As a parts manager, you are constantly searching for ways to boost your departments profitability. One key factor of this is finding the average transaction value. This value allows you to monitor if technicians are successfully upselling/cross-selling and see if there’s room to Improve.
It’s also important to evaluate the total lost sales and total emergency orders, to get a sense of whether you are properly managing your parts inventory. With the prevalence of online ordering tools such as Amazon, you want to make sure that you’re able to get that customer the right part when they need it, to avoid losing sales. If you aren’t able to find what you need at your dealership, consider using a parts inventory management software like Ideal Parts Locator to find those parts at another dealership near you.
Here’s a full list of parts department metrics what your Parts Manager should be monitoring:
- Total Parts Sales Counter/Service: The number of dollars you earn from all your parts sales – across the counter and to the service department.
- Total Transactions: The number of transactions that take place each day.
- Average Transaction Value: The total value of all transactions divided by the number of transactions or sales.
- Composite of Daily Reports: A compilation of the daily reports.
- Total Back Orders: The numbers of orders that have not been fulfilled yet.
- Total Lost Sales: The number of times a product was not available when a customer wanted to buy it.
- Total Emergency Orders: The number of times you had to order an out-of-stock product to meet customer demand.
- Composite of Weekly Reports: A compilation of the weekly reports.
- Average Sale by Parts Person: The total number of parts sales divided by the total number of transactions per person.
- Average GPM: The average number of dollars you make after deducting the costs associated with selling your parts.
- Average Transaction Time: The number of hours, on average, it takes your people to close a transaction – from the moment the customer approaches the counter to the moment they leave the store. This metric is important because it tells you how optimized your parts department is for serving customers.
To learn how to implement these metrics into your routine check out our Monthly Checklist for Dealership Parts Managers.
Dealership Service Department Best Practices: Metrics for Service Managers:
Are you wondering what metrics you should be tracking at your dealership to ensure your service department is on track? There are many factors you should be monitoring in your service department in order to get an accurate picture. After speaking with Bob Clements, we’ve outlined some of the most important ones below.
Increasing service department profitability can be challenging, as dealers often gauge it by dollars sold. To ensure techs stay on track, Service Managers should assess these metrics daily.
Each day, the Service Manager should be preparing a review of the total labor sales and the recovery rate.
- Total Labor Sales: Personnel costs over sales.
- Recovery Rate: The number of hours you pay for your tech over the number of hours you sell.
Each week, the Service Manager should be reviewing the daily reports, as well as the average tech efficiency, the average completion time, the aging of open work orders and un-filed warranty claims amount.
- Composite of Daily reports: A compilation of the daily reports.
- Average Tech Efficiency: Number of hours spent on work orders versus billable time.
- Average Completion Time: The average number of hours completed per work order. To determine the number of hours you still have to complete for all your outstanding work orders, multiply this number by the total number of work orders.
- Aging of Open Work Orders: The amount of time a work order has been open.
- Unfiled Warranty Claim $$: The number of dollars you need to retrieve on your unfiled warranty claims.
- Composite of Weekly reports: A compilation of the weekly reports
- Efficiency and. Recovery by Technician: The actual percentage of the time each tech has recovered.
To learn how to implement these metrics into your routine check out our Service Manager’s Monthly Checklist.
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