11 Repair Orders = 1 New Car Sale

What if I told you that the gross profit generated by 11 repair orders equals the same amount of gross you make on the average car sale? Our dealers tell us that they average about $1600 in gross per car sold – not counting F&I income which varies all over the board. They also tell us that on customer pay they average about 2 hours per repair order at $75 effective labor rate and 75% gross profit. They also average about 70% parts to labor ratio and maintain about 45% gross for parts sold on ROs.

With those numbers in mind…think about this. Each repair order will deliver about $112 in labor gross and $47 in parts gross – for a total of $159 in gross profit per RO. Just 11 repair orders generate more gross profit than the average car sale – Wow; I bet you never thought of it like that.

Wait - there is more. Most advisors write up about 20 repair orders each day. We are told that most vehicle sales people get see about 3 shoppers per day. Do the math – advisors visit with 5-7 times more customers each day than your vehicle sales people do. Wow, again.

Now, here is the part I don’t understand. Most dealers have vehicle sales meetings at least weekly, some have them daily. They focus on phone skills and closing techniques. They role play, have walk-arounds and post each unit sold by each salesperson on a huge tracking board. They reward top vehicle sales people with trips, bonuses and incentives, and all that stuff works. My question is why don’t you do the same for your service “sales people?”

When was the last time you had a ‘service sales meeting’? When was the last time you trained advisors on how to answer the phone to get more customers in or how to sell tires? When was the last time you actually practiced or role-played selling a 30K or worked with them on negotiating or overcoming objections? Never – is too long ago.

Get out there is my message. Get excited about your service business and your service sales team. Start by hiring the right people – people that like to sell. Train them, motivate them, pay them and treat them – like sales people. Make sure they understand how important it is to be honest and that they have to sell…but retain customers for life. Give them the tools they need – empower them with the ability to work deals, give loaners and get in the tire business in a big way. Make sure they know what you expect…each car gets a multi-point inspection report, each customer on the phone needs to be invited in and they need to do whatever it takes to put deals together. They need a never-say-no attitude. Reward top performers and hold them accountable. Treat your service more like sales people and they will perform more like sales people.