Calculate break-even percentage
Are you happy with your profitability in the parts department? Your net profit as a percent of the gross can be 40% or more. If it isn't, you might want to check your break-even percentage.
To calculate that, take the total department expense and divide by the sum of the cost of sales (that is sales minus gross) plus those same expense dollars. Your answer will be a percentage ranging anywhere from the teens up. Many successful dealers have a break-even percentage below 23%. If you're higher, you need to either lower your expenses or increase your volume. Which can you do quicker?
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What top-notch service managers do
How do you know your service manager is doing a good job?
Lack of major problems? Is that how you know? It's more than that.
Here are assignments that top-notch service managers should be working on:
Getting service department net profit to 30% of the department gross, excluding any parts gross contribution.
Bumping the labor pricing grid up 4%.
Putting a bounty on hiring technicians.
Installing an active apprentice technician training program.
Getting technicians to 125% effectiveness.
Making sure there is at least one service advisor for every four technicians.
Start selling tires on the service drive.
Saturday service all day.
Monitoring service advisor penetration of menu items on customer repair orders.
— Leo Hart
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Where to find talented people
Dealers need talented people. So, where do you find them?
Consider participating in a career day. Regional vocational schools, as well as two- and four-year colleges, have career recruiting days. These are great opportunities to identify potential employees.
The process is simple. Contact the institutions in your area and ask to speak to their employment placement director. They can coordinate your participation and inform you of the schedule for the next meeting.
Through the development process, technician trainees can be integrated to your dealership, additional administrative personnel can be hired and entry-level sales staff will be better educated, to reflect your dealership culture.
Your costs are lower, your productivity and loyalty are much greater and CSI reflects your commitment to your customer as well as to your business.
Money-making minutes is provided by NCM Associates in conjunction with the Automotive Satellite Television Network (ASTN).