What if I told you that the gross profit generated by 11 repair orders equals the same amount of gross you make on the average car sale? Dealers tell us that they average about $1,600 in gross per car sold - not counting F&I income which varies all over the board. They also tell us that on customer pay repairs they average about two hours per repair order (RO) at $75 effective labor rate and 75 percent gross profit. They also average about 70 percent parts to labor ratio and maintain about 45 percent gross for parts sold on ROs.
With those numbers in mind, think about this: Each repair order will deliver about $112 in labor gross and $47 in parts gross - for a total of $159 in gross profit per RO. Just 11 repair orders generate more gross profit than the average car sale. Wow! I bet you never thought of it like that.
Wait, there's more. Most advisors write up about 20 repair orders each day. We're told that most vehicle sales people get see about three shoppers per day. Do the math - advisors visit with 5-7 times more customers each day than your vehicle salespeople do.
Now, most dealers have vehicle sales meetings at least weekly, some have them daily. They focus on phone skills and closing techniques. They role play, have walk-arounds and post each unit sold by each salesperson on a huge tracking board. They reward top vehicle salespeople with trips, bonuses and incentives, and all that stuff works. My question is, why don't dealers do the same for their service "salespeople?"
When was the last time you had a 'service sales meeting?' When was the last time you trained advisors on how to answer the phone to get more customers in or how to sell tires? When was the last time you actually practiced or role-played selling a 30,000-mile tune-up or worked with them on negotiating or overcoming objections? Never is too long ago.
Get out there is my message. Get excited about your service business and your service sales team. Start by hiring the right people - people that like to sell. Train them, motivate them, pay them and treat them like salespeople. Make sure they understand how important it is to be honest and that they have to sell, but retain customers for life. Give them the tools they need. Empower them with the ability to work deals, give loaners and get in the tire business in a big way. Make sure they know what you expect and that each car gets a multi-point inspection report, and each customer on the phone needs to be invited in. They need to do whatever it takes to put deals together. They need a never-say-no attitude. Reward top performers and hold them accountable. Treat your service associates more like salespeople and they will perform more like salespeople.
Randy R. Johnson
Randy is the founder and President of Car People Marketing, Inc., which provides customer loyalty and direct mail marketing solutions to increase the revenue and profitability of dealership service departments. He is a former owner of an independent repair shop, and was a fixed-ops director of 17 stores in Florida.
Article Source: http://EzineArticles.com/?expert=Randy_R._Johnson
With those numbers in mind, think about this: Each repair order will deliver about $112 in labor gross and $47 in parts gross - for a total of $159 in gross profit per RO. Just 11 repair orders generate more gross profit than the average car sale. Wow! I bet you never thought of it like that.
Wait, there's more. Most advisors write up about 20 repair orders each day. We're told that most vehicle sales people get see about three shoppers per day. Do the math - advisors visit with 5-7 times more customers each day than your vehicle salespeople do.
Now, most dealers have vehicle sales meetings at least weekly, some have them daily. They focus on phone skills and closing techniques. They role play, have walk-arounds and post each unit sold by each salesperson on a huge tracking board. They reward top vehicle salespeople with trips, bonuses and incentives, and all that stuff works. My question is, why don't dealers do the same for their service "salespeople?"
When was the last time you had a 'service sales meeting?' When was the last time you trained advisors on how to answer the phone to get more customers in or how to sell tires? When was the last time you actually practiced or role-played selling a 30,000-mile tune-up or worked with them on negotiating or overcoming objections? Never is too long ago.
Get out there is my message. Get excited about your service business and your service sales team. Start by hiring the right people - people that like to sell. Train them, motivate them, pay them and treat them like salespeople. Make sure they understand how important it is to be honest and that they have to sell, but retain customers for life. Give them the tools they need. Empower them with the ability to work deals, give loaners and get in the tire business in a big way. Make sure they know what you expect and that each car gets a multi-point inspection report, and each customer on the phone needs to be invited in. They need to do whatever it takes to put deals together. They need a never-say-no attitude. Reward top performers and hold them accountable. Treat your service associates more like salespeople and they will perform more like salespeople.
Randy R. Johnson
Randy is the founder and President of Car People Marketing, Inc., which provides customer loyalty and direct mail marketing solutions to increase the revenue and profitability of dealership service departments. He is a former owner of an independent repair shop, and was a fixed-ops director of 17 stores in Florida.
Article Source: http://EzineArticles.com/?expert=Randy_R._Johnson
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