With supply chain issues limiting wholegoods sales, the aftermarket business — the dealership’s true margin-maker — has never been more important.
According to American Diesel Training Centers, in just 3 more years, there will be more mechanic openings than working mechanics. “You better start planning to make it a very desirable position to the pool of potential techs that exists,” says retired dealer-principal Gord Thompson, now a dealer trainer and consultant. “This alone could easily squeeze out the pretenders who have poor service facilities or weak service management.”
A survey conducted by Farm Equipment and the North American Equipment Dealers Assn. showed 61% of dealers have an immediate need for service managers, and a nearly equal number report a long-term need in developing service managers.
While the ongoing technician shortage gets a lot of attention, Next Level Service Management requires more than just well-trained technicians. Retention starts with the service manager. And best-in-class performance requires knowledge and support from every area of the business — from the very top down, and permeating through every department.
Your dealership’s profitability, and its future, may be as tied to the service manager position as much any other single position on your dealership’s org chart.
Back (l-r) Editor/Publisher Mike Lessiter; Brian Lewis, CDK Global Heavy Equipment; Jesse Peters, Axon Tire; Craig Lee, Geringhoff; Kyle Frazier, Laforge Systems; Terry Lee, BigIron Auctions; Randy Tye, Iron Solutions; Greg Roberg, AgDirect; Executive Editor Kim Schmidt
Front (l-r) Roger Murdock, Montag Mfg.; Jacob Bryce, Machinery Scope; Regen Lux, Dawson Tire & Wheel; Nate Cox, TractorHouse; Andrew Winkles, PFG America; Shane Waldemar, Dealer Information Systems. Not pictured: A&I Products
Consultant Bob Clements of BCI International, who gave both a pre-conference workshop and a general session presentation, is one of the industry’s greatest champions of service operations. Yet, he still is perplexed by some dealer owners who are obsessed with the shiny, sexy wholegoods. Some, he says, still view the shop as “the black hole of hell that Satan himself would never walk into.”
Yet, when done right, Clements maintains service is the most profitable part of the entire dealership. “There is nothing more profitable in a dealership,” he says. “There’s no way you can make more money in a dealership, person for person than in a service department.”
The 2022 Dealership Minds Summit Video Replay is brought to you by DeLaval. Click here to view videos of all the sessions from this year’s Summit.
The reason, he says, is because the service manager controls everything. “It’s the service manager’s job to determine your posted labor rate. And the dealership buys parts from itself.” This control, coupled with well thought out and executed processes, allows the department to chart the level of success it will achieve.
While most can accept that service is the key to wholegoods sales success (that is, no matter how good a salesperson is, the experience with the service shop will make or break all subsequent equipment purchases), the complexities of the service operation still aren’t well understood. Attendees at the first-ever Dealership Minds Summit devoted to service management converged on Iowa City to learn how to refine and optimize the area where dealers’ fortunes reside.
“Service is the backbone of everything that happens in a dealership,” Clements says. “But when the backbone is out of alignment, nothing works well in a dealership.”
But when it’s done correctly, service operations are “like an ATM that throws out $100 bills,” Clements says.
Click here to download the eguide “How to Improve Service Productivity & Efficiency by Tracking the Right Metrics.”