Service directors of professional automotive dealerships have stressful jobs. They are required to deal with a broad range of personalities, temperaments, and quirks – of both employees and customers. Similar to a preschool director, they have to keep everyone fed, burped, diapered, and pampered. They have to dry tears, wipe running noses, and clean up messes – all while making a profit for their dealership.
To make matters worse, a recent survey of 35,000 technicians found that most were dissatisfied with their jobs and 52% would not recommend the career to a friend. All this comes at a time when the technician shortage in the U.S. is at a crisis level.
The study from Carlisle & Co., as quoted by David Kushma in Fixed Ops Journal, found the biggest issue centered around technician pay. Three-fourths of those surveyed (73%) have a flat-rate pay plan. While the debate of flat-rate pay plans has been ongoing for over 40 years, there is one thing that makes everyone happy: when techs get enough hours to “beat the clock.”
I have the highest respect for professional automotive technicians. They have spent hundreds of hours in training, and they must constantly adjust to ever-changing technology, while having the physical stamina to wrestle heavy automotive components and tools.
Speaking of tools, the technician has more money invested in the dealership than any other employee on the premises, except the dealer principal. Many top-tier technicians have over $100,000 invested in their tools, diagnostic, equipment, and toolbox.
These guys are your most valuable resource, and worth your investment in them. A good work environment, communication structure, and pay plan are key factors to keep techs happy and productive. But the best thing you can do for your techs is to feed them lots of hours.
The current efficiency benchmark is 125%, meaning the technician produces 50 flat-rate hours during a 40-hour work week. When that happens, everyone is happier. And having an occasional 55-60 FRH week is even better!
To be absolutely clear, the main issue with technicians is money! The good news, my friends, is that this is very easy to fix. There is a simple, proven formula to put more money in the technician’s pockets each week: sell services!
Step 1: Thoroughly inspect every vehicle.
Step 2: Review the inspection with the vehicle owner.
Step 3: Ask the owner to buy every tech-recommended service.
Okay, you’ve heard that before, right? This isn’t new information, yet most A-level and B-level techs think inspections are beneath them. They just don’t do them. Inspections lead to maintenance sales – and that’s where the gravy is. Most maintenance services are 200% efficient (the job flags an hour and takes 30 minutes).
Efficient maintenance services are the way your top-tier techs can make up for the diagnostic work that “eats their lunch.”
I have always believed a technician should do his own inspections. However, maybe it is time to bend a little bit on this issue. Maybe you could consider having an apprentice do the inspection for all your A and B level techs. Or, you could require every vehicle go to the lube rack for inspection before it goes to the tech bay.
For your hourly lube techs and D-level techs, maybe you could pay them a $10 bonus for every maintenance need they find and maintenance service they perform. Or, maybe they could get flat rate pay when they are doing maintenance work.
However you choose to implement the process, one thing is necessary: every car must be thoroughly inspected, and the results presented to the customer in a professional manner that leads to a sale.
Vehicle owners are buying maintenance services and they’ll buy them from you, if you ask. To prove the point, another survey by DealerRater quoted in Fixed Ops Journal in April of 2019, showed one-third of consumers who were asked to buy additional service work said yes.
By the way, I did my own survey and I found that no vehicle owners bought additional services when they weren’t asked.
One of the dealers at a recent dealer 20 Group, said the landscape of profitability is changing and that their dealership was becoming a retail automotive service outlet (meaning new car sales were taking a back seat to service sales).
This isn’t surprising considering labor gross is north of 70% and new car gross is less than 5%… and for many dealer’s new-car gross is a negative number!
Most dealers and general managers grew up on the variable ops side of the business; so, I am always encouraged when they get serious about the service department. I’m even more excited when they start viewing fixed ops personnel as their service sales staff.
After all, money is money, so why not pursue the low hanging fruit of preventative maintenance? The survey said three out of 10 will buy if you ask; and with a little bit of service sales training, you’ll get that to five out of 10 in no time at all.
Happy sales to you!
My personal thanks to David Kushma for allowing me to quote statistics from several of his articles over the past couple of years.
Author: Charlie Polston
Charlie Polston is an Automotive Customer Retention and Profitability Consultant with BG Products, Inc. Charlie has been with BG’s Fixed Operations Division for over 34 years.