It could be said that the service department is the lifeblood of the dealership. Yet, the service department often presents the most challenges for dealers.
In fact, a recent workforce development survey conducted by the Western Equipment Dealers Assn. (WEDA) and Farm Equipment found that 61% of dealers say they have an immediate need for a service manager when asked about their needs for either senior or mid-level management. When it comes to long-term needs, service managers again rank No. 1 with 60% of dealers.
With nearly 71% of dealers forecasting service revenue growth this year (2022 Dealer Business Outlook & Trends Report), having the right personnel and processes in place is going to be instrumental to achieving it.
“If you want to effectively drive productivity at your dealership, you need to track the right metrics. While tracking the wrong metrics can lead to false-positives and dead-ends, tracking the right metrics can offer real insights into your service department productivity and bottlenecks that need fixing,” says Kelly Mathison, WEDA Dealer Institute trainer and consultant.
The top KPIs service managers should be tracking, according to Mathison, are productivity (billed hours/worked hours) and efficiency (billed hours + gains or losses/revenue hours).
Dealer consultant Bob Clements says the most misunderstood aspect of service is pricing strategies. He says there hasn’t been much focus on how jobs are priced out.
“I think there are literally tens of thousands of dollars every year that dealerships just simply walk by,” Clements says. He believes if service managers made sure all their menu pricing and basic services were in place — and established their own internal flat rate system — success would follow close behind.
“The right metrics can offer real insight into your service department…”
From finding technicians (86.1% of dealers say they plan to hire technicians in 2022 and 79.3% ranked technician availability as an issue they are most concerned about), adjusting your labor rate, and hitting target productivity and efficiency rates, the service manager and corporate aftermarket manager have their hands full.
That’s why we’ve decided to focus the 2022 Dealership Minds Summit on service management, based on the feedback of past attendees and our dealer advisory board.
With the theme Next-Level Service Management, the 2-day, information packed Summit in Iowa City, July 26-27, 2022, will bring you actionable ideas upper management and service managers alike can take back to their dealership to implement.
We’ll have the full program in the April/May issue of Farm Equipment, but you can find information about how to register at DealershipMindsSummit.com.
In the meantime, head over to Farm-Equipment.com/ServiceQuiz to test your service department metric knowledge.
If there are topics you’d like to see covered at the Summit or you want to present, give me a call at 262-777-2431 or email firstname.lastname@example.org.