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How’s the health of your service department? John Fairchild of Fairchild Automotive Solutions has some suggestions

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How is your health? No, not your health…the health of your service department? Have you checked it in awhile? According to John Fairchild (of Fairchild Automotive Solutions, showing areas of strength and weaknesses can help measure where you should be.

For example, service advisors are a critical point of interaction between your dealership and your customer. They often don’t get the kind of training a salesperson gets…so you have to wonder, are they upselling to your customers or just handing out the repair order and taking orders?

Fairchild says measuring a service writer’s efficiency and effectiveness is critical and what you find may enable you to increase sales dramatically. So, when it comes to customer pay labor dollars per customers, there are two measurements to diagnose performance here: 1.) Effective labor rate (average labor charge per hour flagged) times the hours sold per repair order equals the labor dollars per customer.

Customer pay parts dollars per customer: A baseline of 1 to 1 parts to labor ratio is desirable in most scenarios with heavier parts sales attributed to selling parts-heavy jobs like tires, batteries and filters.

Commodities penetration: How many key competitive services are being sold per RO? Maintenance commodities include brakes, tires, wipers, filters, batteries and fluid exchange services.

And parts and labor gross profit percentage retained: This is really how much money is your dealership keeping from the transactions you have. Low percentages may indicate excessive discounting and/or poor upsell penetration.

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