Finding Lost Sales

[Ironchild]

I know this topic has been discussed in the past and the definition of a lost sale can differ depending on who you talk to. What I'm questioning how to find the lost sales that do not occur in the parts department. Mainly in service......if an advisor gives the customer an estimate and they decline the service, do you find out and for what reason? Is there a means and process in place for the service advisors to log the lost sales and get that info back to the parts department on a dedicated basis? Just curious how others are doing this since reporting lost sales is an extremely important thing to in the parts department.

[PartsPlant81]

The only real way for you to track them in the parts department is this: You write a quote for a repair order. You print the quote and you give the technician or service writer a copy of the quote and you keep a copy for yourself. If they sell the job they come back to parts to get the parts, you take your quote pull the parts, charge them out and recycle your copy of the quote. At the end of the day the quotes you still have sitting in your quote pile you take out to service and ask the advisor if the customer has an appt. for those parts at a later date or if we lost the sale. Any thing that the advisor says "they ain't buying it" to you go back to your DMS and mark all of the part numbers as a lost sale.

[nansorbdarb]

I have one service advisor, and I'm fortunate that we have a great relationship between service and parts. We communicate well and I accually have an average of 4 to 8 lost sales per day (sometimes none). It's never a good thing if the egr valve you stock is not sold because the customer had to wait 1 day for a gasket to arrive. It sure is funny how those small things make or break an entire repair.

[GregW]

What I'm questioning how to find the lost sales that do not occur in the parts department. Mainly in service......if an advisor gives the customer an estimate and they decline the service, do you find out and for what reason? Is there a means and process in place for the service advisors to log the lost sales and get that info back to the parts department on a dedicated basis? Just curious how others are doing this since reporting lost sales is an extremely important thing to in the parts department.

When you are building a quote, if you do not have the part in stock do you do a lost sale at that point?

If the customer declines due to the price of the repair, is that a lost sale to the parts department that is tracked in parts?

Although a customer that declines work in service is truely a lost sale (regardless if you had it in stock or not), I did not think that it was the same type of lost sale as recorded by the DMS. I thought that a lost sale in the DMS was track that you did not have it on the shelf or did not have the proper quantity.

This does pose a great question. Do any of the service departments track their lost/declined repairs and follow why they were declined?

[PartsPlant81]

When you are building a quote, if you do not have the part in stock do you do a lost sale at that point? No because you can still get the sale if you procure the part from another source locally (other dealer, WD or you can order the part and still get the sale)

If the customer declines due to the price of the repair, is that a lost sale to the parts department that is tracked in parts? Yes.

Although a customer that declines work in service is truely a lost sale (regardless if you had it in stock or not), I did not think that it was the same type of lost sale as recorded by the DMS. I thought that a lost sale in the DMS was track that you did not have it on the shelf or did not have the proper quantity.

This does pose a great question. Do any of the service departments track their lost/declined repairs and follow why they were declined? They do not track them the same way that we do; they usually will write a line on the repair order if there is one stating "customer declined work at this time.

[JJS]

I've been doing this for way more years than I care to admit and the answers have always been all over the place. Every time you try to agree on a standard something will happen to become the exception and that's what starts the inconsistency with posting them; you have people doing them for different reasons. I don't think any of us would 100% agree on one specific definition of a Lost Sale.

For the life of me I don't know why ADP and Reynolds (I've used both for years) can't create different lost sale types; maybe 5 or 6 categories. Have one type for price, one type for availability, another for customer declined work, part sold and then returned, etc, etc. They could carry different weights in the system so that being truly out of stock has more of an effect on phase-in or best stocking levels vs. something like price. If you see that a number has a history of being turned down due to price you can investigate and possible do something about it. Now we just look at it and say we had a lost sale on it last month, what good is that?

I would think in this day and age that because almost everything we do now is being tied to a quote or a VIN why not use that as some sort of database so the systems that we rely so heavily on could keep track of a lost sale that was maybe double posted, wasn't truly a lost sale because the customer came back, etc. and automatically crunch the numbers and cancel it out of the system or validate it if truly is one, or maybe some kind of menu with a report that we can review, accept or change. I know in my case a lot of my lost sales actually become sales down the road. I've accepted the fact that I'd rather record too many than too few lost sales, but that was my decision. And in all honesty I'm not going to spend hours researching every one of my lost sales and back it out of my system, if you do you have way more patience than me.

[X476]

Back in the day, Web Suite 2007 I thought they had a way to lost sale due to price? Then you could pull a report to track those. I could be wrong though.

[PartsPlant81]

Great post JJS! That is a good idea it would essentially be like sourcing your lost sales...
X476 Yes Websuite does have that ability But you are only prompted for that if you have QOH in your inventory then you type for example 1LP (Quantity, Lost, Due to Price)

[partking]

My favorite topic. I think the big problem is the name, “lost sale.” So we end up with an endless discussion of how to define a lost sale. So let’s change the name. It’s “Record of Demand for Stuff I Didn’t Have in Stock.” What’s important to track is which parts customers are starting to need in my market (that I don’t have). It makes no difference is the customer said “too expensive.” Because we can’t say for sure if the convenience of walking out the door with one would have made the difference. And if the volume is there, you could give a small discount and at least get some of the gross.

To capture the ones from the shop, I like to use a multicopy paper form for a P&A. At the end of the day, or every couple of days, collect back a copy of the unsold ones from the service advisors. Log a lost sale for any items that were NOT in stock. Ignore any that WERE in stock at the time if the request.

If the parts were special ordered and taken, the sale takes care of the demand record. If the customer never comes back, then THAT's a lost sale when the stuff goes back or goes into stock,

And never log a lost sale for something IN stock that was refused. Those items for sure can’t be sold at the current pricing. A lost sale here may increase the sales guide and order a friend to keep the stocked one company.

I have video on this that the moderator has posted as a separate topic. It's about 9 minutes to watch. Enjoy.