Professional Community for Car Dealers, Automotive Marketers and Sales Managers
For service managers, I have found that Thursday is a good day to do a trial close as you get ready for the end of the week. By Thursday you know pretty well where you stand and if you discover problems, you still have two days to get them cleaned up.
A trial close starts with closing every Repair Order (RO) that can possibly be closed. Since many dealerships still pay techs and service writers weekly off of closed ROs, this process will ensure your employees are getting paid in a timely manner, which makes them happy.
Additionally, I recommend reviewing a few Key Performance Indicators (KPIs) that can tell you if there are problems lurking in your processes. Potentially, these problems could rear their ugly heads at any time to take a big bite out of your weekly profits. Tracking these on a weekly basis will help you close out this week on a positive note, while setting up next week for maximum profitability.
1) Open Repair Orders (ROs) Over 3 Days
How many ROs are currently open that have been open more than three business days? Ideally, no more than 10 percent of your total RO count have been open this long. A number higher than 10 percent indicates a problem somewhere. To find out what--or rather, who--is causing the problem, drill down.
First, focus on the low-hanging fruit that delivers max profitability: customer-pay and internal ROs. Typically there are three reasons why these ROs stay open.
The first reason is because the customer hasn't picked up their vehicle. Sometimes the service writer can't get hold of the customer, or they have tried and the customer has not returned their call. This can happen if the customer has gone out of town or if the loaner car they're driving happens to be nicer than their own car. They're not in too much of a hurry to pick up their vehicle. If this is the case, it's time for the service manager to get on the phone and become a little more persistent. You may want to tell the customer you'll have to start charging a daily fee for that loaner car.
The second reason why an RO may stay open is if a service writer has placed it on the back burner to prioritize jobs that are easier or more profitable. Since the squeaky wheel gets the oil, this should be taken care of pretty quickly with a terse note from the service manager.
Finally, the open ROs may be tied to a hoarding technician. Perhaps someone is flagging good jobs and won't let anyone else do the work. Meanwhile they're getting assigned to other jobs and the RO is sitting there. This problem is easily solved by the service manager, simply by assigning the jobs to other technicians. But you can't solve the problem if you don't know it's there.
2) No Show Percentage
How many service appointments were made but the customers did not show? Your no show percentage should be 15 percent or less.
This KPI is important to track because if you're not following up on no shows, that's a lot of techs standing around doing nothing. If your no show percentage is higher than 15 percent, drill down.
First, separate the warranty no shows from the customer pay no shows. There's no rush to follow up on the warranty work. But if it's customer pay, pick up the phone. Call the customer directly to see what happened and try to re-schedule.
If your no show percentage is consistently higher than 15 percent, you may want to think about implementing an appointment confirmation process in your service department. It works in your sales department, why not service?
3) Special Order Parts on Shelf
Many times a customer needs a special order part to have a repair done, but their car is fine to drive in the meantime. The part comes in, someone leaves a voice mail for the customer telling them that their part is in...and nothing happens.
There should be zero special orders parts over a week old. Daily calls and/or emails may be necessary to get the customer's appointment scheduled.
Reviewing these KPIs will help keep your service department cash flow healthy and your shop scheduled to maximum capacity. What service KPIs do you like to review on a weekly basis? What other tips do you have to ensure that your week ends on a positive note?