In every dealership service department, there is a desk. Behind that desk sits someone with the ultimate responsibility to increase profits. This person is called the service manager.
When I am asked to visit a store that is not profitable, I typically find the person responsible for those profits working on everything not related to profits while believing that they are working on everything related to profits.
I call it the “Theory of Unprofitability”: Profits equals time dedicated to process implementations multiplied by the number of completions. Simply put, the manager must dedicate their time to making sure service sales processes are being followed with every customer.
In stores that are not profitable, the manager spends more time on things that have nothing to do with profit and everything to do with nothing. The tasks they are focused on have no bearing or impact on service department profitability.
Let me give you an example: The service manager is working the service drive when he is approached by the sales manager. The sales manager tells him the tethered marketing balloons for the sales department’s front row, which should be in position first thing in the morning, are not up yet. “Could you take care of that as soon as possible?” he asks. Profitable or unprofitable task?
Another example: The service manager is working in his office when he is informed that the lights on the front lot are not on. “Can you do something about it?” Profitable or unprofitable task?
Are these important to the daily business functions of the dealership? Yes, they are. Is there a person who is not the service manager capable of taking care of these items and directing personnel? Yes, there is.
Years ago, the owner of the store I worked at handed me yet another daily task not related to profit growth. After he left, I decided to write down all the tasks that had been thrown my way over the past year just so I could get a handle on it. The list grew to 40-plus items, and guess what? Not one of them had anything to do with making more money.
Were some of them important? Yes. Necessary? No doubt about it. But on the fifth of the month, when you want to know why fixed ops revenue is off by 13% and what your service manager plans to do about it, don’t be surprised to get a list of unprofitable tasks in return.
By the way, when I handed the owner my list and asked him to specify which of those tasks were “Top Priority” and which were not, he apologized. He had no idea how bad it was until I pointed it out to him.
Back on Track
Here are a few things you can do to get your service manager back on track and instantly increase fixed ops revenue:
1. Make two lists. Ask your service manager to track the tasks they are assigned. Separate the items into two lists: “Tasks That Make Money” and “Everything Else.” Give top priority to training, monitoring, coaching, and managing the service sales team. Give zero priority to everything else.
2. Share your lists. Share the lists you created with your leadership team. Ask them to delegate “Everything Else” to other managers and staff and remind them that some of those items are their responsibility.
3. Empower your service manager to say ‘No.’ Your personnel will test the limits of your new policy. Authorize your service manager to decline “Everything Else” and stick to what makes money and makes sense.
Lastly, you and I work in the real world. If you’re a GM, and the owner drops their keys off and asks your service manager to get their demo washed and gassed, that is not a good time to share your lists. That is a great time to observe the “20-Foot Rule”: Walk 20 feet outside the building, look up 20 feet, and see whose name is on the sign.
Leonard Buchholz is the founder of CarBizCoach. He helps dealers meet performance objectives in service sales, CSI, and profitability, and has extensive experience in evaluating fixed operations and providing corrective training and guidance. Contact him at [email protected]
Originally posted on Auto Dealer Today