Whenever I ask this question, I’m usually very disappointed with the answers that I receive. This past week, when I queried a group enrolled in the NCM Institute's regional Service Management training class in Charlotte, NC, only 20% responded with a “Yes.” My disappointment continues, and probably forever shall. Why am I disappointed, and why is Service Pricing Guide (SPG/SPS) utilization so weak?

I’m disappointed because I know from experience that dealers who effectively utilize SPG/SPS have much greater service department profitability than those who don’t effectively utilize it (or don’t use it at all). In their recent advertising campaigns, Reynolds & Reynolds states that dealers using their Service Price Guides application experience:

• 60% Higher Labor Gross Profit

  • 30 Minutes More Billable Hours Per R.O.

  • $9.00 Increase in Effective Labor Rate

• 50% More Parts Gross Profit Per R.O.

I’m very much inclined to believe the claims of Reynolds & Reynolds. And since most dealership management computer systems (DMS) offer a Service Pricing Guide add-on application, the “ReyRey” claims should apply to almost any DMS vendor’s SPG/SPS application. With the effective utilization of SPG/SPS, you should increase the productivity level of service advisors, technicians, and parts department back-counter personnel.

You probably already know that all SPG/SPS programs will provide consistent, “to-the-penny” customer pricing in seconds for an aggregate total of labor sales, parts sales, shop supplies and material sales, and sales tax…or in other words, accurate total job pricing. But what you may not know is that, with many of the DMS vendor SPG/SPS applications, you can:

1. Easily integrate “Grid” or “Precision” Labor Pricing
2. Establish different labor rates by vehicle type, or even specific vehicles
3. Charge different labor rates for different skill levels
4. Immediately see and recommend potential related repairs
5. Determine parts availability, by coordinating opcodes with part numbers
6. Print parts “pull tickets” for authorized R.O.s
7. Easily convert estimates to R.O.s

With all these advantages, why are SPG/SPS applications effectively utilized only on a limited basis?

• There is a perception that the application is too expensive. Based on my research the ROI on this application is very significant.

• SPG/SPS is time-consuming to set up. Agreed! But sometimes, there is no gain without pain!

• It’s not accurate. That may be true at the beginning, but with proper feed-back from advisors and technicians, it can certainly become accurate. Sometimes, dealers, managers, and service department employees have made the assumption that the SPG/SPS should be accurate from the get-go. Not So! Give it a fair amount of time!

• Advisors and technicians push-back. This is normally the result of poor “change management.” This application is a win-win for the management, sales, and technical staff. It needs to become part of the service department culture. 100% utilization needs to become a condition of employment.

We’d like to know of your experience with your DMS vendor’s SPG/SPS application. Please offer your comments in the area provided below.