Dealerships have a process for everything, yet most of those don’t produce revenue right now. There is a process to meet and greet on the service drive, a process to do an oil change and rotation, a process to introduce new car buyers to the service department, and a process to enhance the customer experience. All of these processes are necessary for the smooth operation of the service department and sometimes plant seeds for future sales, but they seldom produce revenue right now. However, there is one process, if properly implemented, will produce revenue right now; revenue from the cars you have on the service drive and in the shop right now. I’m talking about the multi-point inspection process.
The one overriding reason to do a multi-point inspection (MPI) is: to sell service – right now, today, while you have the car in the shop. Sure, there are many other reasons, including safety issues such as tires and brakes, peace of mind, assuring the customer they have a reliable vehicle, etc. But the main reason to do a good MPI is to make money by selling technician-recommended maintenance and repair – right now!
By now, I imagine you’re saying, “Well, everybody knows that.” No, they don’t. When was the last time you did an MPI audit and analysis? The results might surprise you.
I’ve done an MPI analysis at a dozen dealerships in the last 30 days in the southeast region of the country, and in every case, it was a huge eye-opener for the service department leadership team.
First, let’s look at the steps to get a proper audit, and then I will give you some of the results of my recent audits.
7 Steps to Get a Proper Audit
1. Gather all the customer-pay ROs for an entire day. Attach a hard copy of the MPI to each RO. (Note: If you use electric MPIs, you will need to print them.)
2. Count the number of ROs. (Let’s say 25.)
3. Count the number of ROs with an MPI. (Let’s say 20 had an MPI.) Note: If the MPI is blank, that is the same as no MPI. (20 ÷ 25 = .8 or 80% of the ROs have an MPI)
4. Look at your MPIs and count the number of maintenance service recommendations noted by the technicians, and look for checkmarks in the red boxes (immediate attention required). Instead of low-profit items like air filters, cabin air filters, and rotations, focus on fuel and fluid exchange services. These services boost shop efficiency, labor hours, and parts sales, and all have a high gross profit. (Let’s say 10 maintenance recommendations for all 20 MPIs.) (10 ÷ 20 = .5 additional recommendations per MPI)
5. Next, look at the RO to see how many of the maintenance recommendations were sold by the advisors and performed by the techs. (Let’s say they sold two out of 10 for a 20% closing ratio.)
6. Now, go through the ROs and MPIs again, looking for missed opportunities related to the primary item (the primary repair). For example, a battery replacement without battery pads, a cabin air filter without a climate control sanitizing service, a brake job without a brake fluid service, or a water pump without a coolant fluid exchange. This is low-hanging fruit and a great opportunity for extra parts and labor sales.
7. Lastly, go through them one last time, looking for missed opportunities based on mileage and vehicle age. (For example, Nissan says to change brake fluid every 20,000 miles, while Hyundai and Kia recommend a fuel additive with every oil change.) Also, remember dealer-recommended services based on your climate and driving conditions; usually, that’s fluids every 30,000 miles and fuel every 15,000 miles.
When you add it all together, don’t be surprised if it’s $10,000-$12,000 of missed opportunities in a single day.
After you’ve completed the analysis, it is time to have a family meeting with all the technicians and advisors. Put the numbers on the board and tell them the good, the bad, and the ugly. Just rip the band-aid off, and tell it like it is.
I followed this exact process at the last family meeting I facilitated. The results are as follows: of 22 CPROs, only 11 had an MPI attached (50%), and only one recommended maintenance service, a coolant fluid exchange. The advisors didn’t even sell the service (for a closing ratio of 0%.)
Here are some examples of the MPIs: A diesel pickup with 275,000 miles – every box checked green; a mini-van with 110,000 miles – every box checked green; and a small crossover with 69,000 miles – every box checked green except a yellow checkmark on the cabin air filter. In other words, the techs ‘pencil whipped’ the MPI and didn’t really check the cars at all.
The service manager asked the techs a pointed question, “Do you think these MPIs were filled out correctly?” and they all said, “no.” “So what happened?” And then crickets, everybody looking down at their shoes.
These cars represent people. Maybe the pickup is driven by a contractor; if the truck doesn’t start tomorrow due to battery corrosion, he can’t get to work – and no pay for the day. Maybe the mini-van is owned by a young family headed across the country to visit grandma – with unsafe tires with 1/32 tread left. Maybe a single mommy owns the crossover and leaves home at 7:00 am to get her toddler to preschool so she can get to work at 7:30 am. Her car is out of warranty, so if her transmission starts slipping, it will be $4,500, which she doesn’t have. A transmission fluid exchange is the best way to keep that from happening – but alas, the tech didn’t recommend it.
Besides the human side, there’s also the legal side. Every RO you generate has a line item that says your techs performed an MPI – if they didn’t, that’s negligence. If the brakes or tires are worn thin, and you check the box green – that’s called fraud. A savvy lawyer would have a field day.
On the money side – a properly performed MPI that is properly presented to the customers will result in a great low-hanging revenue for the shop.
Okay, back to the family meeting with the techs and advisors. Wrap up the meeting by asking everyone to be very vigilant in adhering to the MPI process for one week. Every tech commits to doing an MPI on 100% of the cars – for a week. I mean, like their lives depended on it.
Every advisor commits to presenting 100% of the technician’s recommendations to 100% of the customers and making a genuine effort to sell the recommended service.
Schedule another family meeting in a week and do the evaluation all over again to see if they improved. Then, if necessary, do it again and again.
My friends, I know you are busy, but if you just do this, the financial rewards will be amazing. And you’ll feel good about yourself because you did the right thing by informing your customers about all their safety, maintenance, and repair needs!
About the Author
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 38 years. He has trained over 7,500 dealers, managers, and technicians – and has been a frequent workshop leader at industry events.