Putting Service Department Metrics to Work

Equipment World Staff March 16, 2009

Measurements don’t lie, but they can be misleading. Knowing what to measure is the first step, but knowing what to do with all those numbers delivers positive changes you not only can measure, but also feel.

The New Year drives us to take stock of our lives. It’s a time of year when we face the music and step on the scale after weeks of holiday feasting, or take a close look at our debts and balances. These measurements can incite a rash of resolution making, but none of these resolutions stick unless we measure consistently. It’s not enough to take a measurement then close our eyes; we must take stock of where we stand regularly and routinely in order to make lasting changes.

Metrics can be overwhelming, but when used correctly, they provide X-ray vision into a dealership, showing areas of weakness in sharp relief. In years when dealers must focus on staying afloat, they often look to the service department as a financial buffer.

Now, when business might be slower, is the perfect time to take a close look at service department metrics. Closely measuring efficiency at points of information transfer and communication-such as between customers and service writers, and between technicians and parts people-is almost guaranteed to highlight points where costs can be cut, sometimes dramatically.

When considering metrics, don’t get overwhelmed; not all the measurements need to be taken immediately and not all changes must be implemented at once. Small steps carefully considered are far better than taking a reckless leap. Bit by bit, the only thing left to measure will be the increasing heft of your finances.

The following are some key measurements dealers should consider and ways metrics can be used to analyze your businesses and implement enduring positive changes. It is by no means an exhaustive list, but these metrics are good starting points to see how efficiently and effectively the service department is running.

There’s No Such Thing As A Magic Number
Most industries love benchmarks, but these numerical standards can be crippling. A dealer shouldn’t use service metrics just to see if he’s hitting a generic benchmark. Too often, measurements are taken infrequently and if they look good, they’re not revisited on a regular basis. This is a huge mistake.

One benchmark that Keith Ely & Associates, a consulting company focusing on truck dealerships, uses measures the number of tickets an advisor should be able to write in a day. They feel that hitting a number of about 80 hours a day or 15 tickets a day is a good place to be, but caution that there’s no such thing as a magic number.

“It’s really about continuous improvement, not about trying to hit some industry benchmark,” says Mark Martincic, dealership operations professional advisor, Keith Ely & Associates.

“First of all, if you hit the benchmark, you’re average,” Martincic continues. “More importantly, too often I’ve seen dealers look at a benchmark and instead of coaching their people, training them to improve, they just replace them. That doesn’t do anything. Every dealership is set up differently. Their processes are different and the number of support people they have vary, as does the physical layout of the facility. You have to quantify all of that when you’re looking at those [benchmarks].”

Focusing too closely on one number warps a manager’s bird’s eye view of the service department. Firing an employee just to trim some fat off your financial statement can come back to haunt you when your business picks up. If you feel that you’re losing money in one area, take the time to examine the processes you have in place before letting people go.

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