industry expert / service
• zero walk-around presentations by advisors,
• zero service menu presentations by advisors,
• zero turnover of declined repairs to a manager,
• a 10 percent closing ratio by advisors,
• 60 percent one-item ROs (oil change),
• below 70 percent gross on retail labor sales and below 35 percent on retail parts sales,
• $50,000 in obsolete parts inventory supported by a minimal advertising budget, no professional training programs for advisors or managers,
• and minimal accountability for performance.
And they're worried about overselling the customer? Why would any dealer tolerate this scenario? Why would any dealer think performance-based pay plans are a good policy for the variable operations but a bad one for fixed operations? If having 100-percent menu presentations is the right process for the F&I; depart- ment, then why is it not the right process for the service department?
In my 12 years of working in the field with dealers of all sizes, I have yet to find a single dealer who is overselling their service, parts and collision center customers. Of course we should never sell a customer any product, service, part or repair that their vehicle does not need. That, however, is not what I'm talking about here.
I'm talking about the advisor not selling the customer what
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their vehicle does need. I'm talking about selling the safety and reliability service and repairs. I'm talking about selling the customer on the benefits of preventative main- tenance and following the manufacturers' basic require- ments and recommendations.
Recently, here at DealerPro Training, we did a study based on a dealer averaging 500 customer pay ROs per month and the advisors made a menu presentation to 70 percent of the customers coming in the door. Here are the results:
• Menu penetration at 70 percent
• Manufacturer minimum services sold at 30 percent
• Additional service sold at 0 percent
• Increase in HPRO at 0.2 hours
• Monthly gross profit increase at $12,268
• Annual gross profit increase at $147,227
Obviously, the closing ratios above are nowhere near a good job of selling but an increase of 0.2 HPRO produces a lot of gross profit, resulting in increased net profits, which provides the dealer with a higher ROI and gives the employee added job security. So again I ask: Since when is selling a bad thing?