DealersEdge Professional Forums

Good Afternoon Automotive World:

Re: CP-is it Dollars$ or Hours per R/O

In todays world of Quick or Express Service Should, the Industry be tracking Hours per Repair Order Customer Paid or Dollars per Repair Order Customer Paid. With the advent of Variable Technicians Pay Rates and Labor Rates is it fair to track HPRO Customer Paid or Dollars and Gross per repair order Customer Paid?????


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Service Sales Manager

Don't these 2 stats go hand-in-hand?
Aren't we really just trying to measure the writer's ability to upsell?

Are the $/RO labor only, or does it include parts?

Selling a bunch of hours/RO is great, but is it being done at reduced rates? You must use $/RO, or better yet, an effective Labor rate (ELR) calculation to determine profitability.

What you have to remember about hours per r/o is that if your service salespeople are paid on hours per repair order than the person that only needs a oil change or just a tire rotation low hours per repair order wont be sold because it will kill the rpro.
you may say well my people dont do that, yes they do . use a total dollar pay plan then devide by door rate

Interesting question... " the Industry should be tracking..."

We track actual total dollars. Yes, the advisors are paid on their individual sales which is a function of the hours the techs flag in the shop.

We try to balance our capacity to provide service with the demand placed on the service department, i.e. total hours sold per day vs. total hours available per day.

Some will say you need 20 RO per advisor per day with average 2hr per ro. Well, averages are one thing but how does it reflect on your service thru-put? What is your business mix? Lot's of small jobs? Big jobs that only one or two techs are qualified to handle?

You can track a bunch of numbers but ultimately it will come down to PROFIT!

s

As a consultant of many years I have always recommended tracking items per customer pay repair order, not necissairly dollars or flat rate hours. These are indicators but the real world dictates that a Service Advisor present a maintenance menu to each customer and attempt to sell it and document any refusal. Technicians are to present any additional found work. Management must manage the gross profit.

Consultants, like real people will take advantage of the payplan, no matter what it is. I run a points system that takes into account, sales, ELR, HPRO, RO count and customer sat scores and we still struggle t oget them to do the "right things". I am considering experimenting with some sort of "pay for process" plan with less emphasis on end result and more on how they got there. Anybody have any luck with that?

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RUSTY B

http://www.dealersedge.com/Media/E-Comm ... E2-New.pdf

We have an audio seminar presented by Ray Branch that was directly on target- pay for process not performance.

The link above will bring you to a PDF file containing the handouts. They may be a little cryptic without the audio- but maybe they will help.

If you are interested in the entire program- just follow the E-Commerce links to the left under service manager and look for the program title that matches the handouts.

(We have deactivated links within the forums to protect against intruders, etc. - if you are interested, you will have to cut and paste to make these work.}

Jim Muntz

[This message has been edited by jimmuntz (edited 09-19-2008).]

It depends what your goal is in tracking. But, as already stated, both should be tracked along with dozens of other stats. We place them all on a spreadsheet and monitor the trends over time. This tending process has shed a ton of light on what is really going on and where it is headed.

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Tom Ham
AutomotiveManagementNetwork.com

can't leave out penetration. How many of your total RO's have CP dollars on them? In todays day and age, a little bit of something is better than a whole lot of nothing and it takes base hits before you can achieve a grand slam. My.02

So what what I am reading everybody feels it's the pay-plan that drives the hours or dollars per repair order. When we look at dollars per repair order we look at total repair order sales including parts sales. The other factor we look at is the gross per repair order as an average.

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Service Sales Manager