When I was teaching the Sonic Dealer Academy from 2001 through 2008, my co-instructor, Steve Hallock, became famous for asking each class why they thought we spend so much time talking about the service department. He would explain that it’s because, at a 75% gross profit margin on labor sales, the service department offers, by far, the greatest incentive to increase sales. "So why bother?" Steve would ask. "Because it’s only75…

The NCMi faculty members and the NCM Retail Operations field consultants have learned that managers who effectively manage the elements of “controllable profitability” within their respective operating departments normally produce a significant departmental net profit. This, of course, assumes that the majority of dealership expenses (limited-control and fixed) are fairly distributed to each operating department.

Many managers, however, lack the proper focus on controllable…

Last evening, as I was thumbing through my April issue of National Oil and Lube News (NOLN), I began to reflect on why and how the folks in the independent automotive repair and maintenance business managed to take such a large chunk of service business away from the franchised dealers. Well, in truth they didn’t take it away…we gave it away…years ago…based on our focus on warranty work, our prices, and our indifference to the service…

How often do your sales consultants or sales managers have to respond like this to customers to whom they’ve just presented or demonstrated a used vehicle?

“Don’t worry about that clunking noise we heard. I’ll have a technician get it fixed in a jiffy.”

“That smell will go away as soon as the carpets are thoroughly dried out.”

“After we do a front end alignment, it won’t pull to the right…

In late December, we posted an article titled, “How Do You Increase Service Department Sales?” In that article, I noted that there are only three ways to do this, the most difficult being to increase the number of customer-paid service transactions (customer R.O. count).  Up To Speedreader feedback indicates this is a high-priority subject, so today I’ll discuss one way to increase your customer R.O. count.

What follows is a…

The labor sales potential for any franchised dealer’s service department is first dependent on the units in operation (UIOs) for that franchise in the dealer’s market. Unfortunately, very few of the manufacturers provide this UIO information to their dealers. For a fee, vehicles in operation (VIOs) are available by zip code from R.L. Polk, Inc.

Since there are other estimates used in the calculation of labor…

This is a pretty basic question, right? But when discussing this subject recently during 2012 annual business planning conferences with several client dealership service managers, I discovered that the answers were far more elusive than they should have been. Most of the NCM client dealers continually try to achieve 5% - 8% year-over-year improvement in Fixed Operations profitability. And those that successfully do so fully understand that it doesn’t just happen. This level of…

As I’ve written previously, the two most important elements of effective Accountability Management are 1) measuring what you need to manage and 2) inspecting what you expect. In the Service Department, the repair order analysis process is one of the essential steps in executing these two accountability elements.

The R.O. analysis is intended to provide information about Customer-Paid (C-P) sales that is supplemental to that available in the typical DMS. The proactive Service Manager…

Very few dealers are both aggressive and effective in selling Extended Service Agreements (ESAs) after the new or used vehicle has been delivered. If you are so fortunate to be among this minority, you don’t need to read any further. Since most F&I departments don’t seem to have the inclination or motivation to work these post-delivery opportunities, let’s explore an alternate strategy…structuring a process to have our service advisors aggressively and effectively sell ESAs in…