After finishing a very successful August and looking back on the success so far year to date it is very easy to blissfully roll into September and the remaining quarter of the year. Let’s face it, the fixed operations business has been good. Everyone I talk to are having record months with increases in parts and labor gross and customer retention, this trend is very exciting. In addition, it is showing us that with a good basic process in place and decent staff there to help the increase in traffic you should be in a position to do more sales. And most of us are doing just that but I have one simple question; Are your departmental profits showing the same percentage of increase?
I am immediately drawn back to pre-2008 when our business was growing at an exceptional rate and the lessons I learned post 2008 and everything it took to sustain business thereafter. Now I am not saying to prepare for that type of scenario but I am saying that most economist are predicting some form of downturn and you should be preparing right now so you are in a position to weather the storm.
Process – Is your team following each proven step of the repair process, or have they been able to deliver industry standard type of results when our industry has been anything but standard. My guess would that they are following the path of least resistance and are not taking your customer through every step you have put in place to maximize your opportunity for this increased traffic. Time to get back to the basics, train on the basic process steps and make certain everyone on the team can deliver a similar process and result.
Personnel – Do you have the right people in the right position? Do you have more people doing more siloed type of activities and daily functions? Review your staffing needs at every spot and ask your self can you get the same type of results by asking everyone to do a little more. When our business is strained those with the best staff will be the best positioned and those with the most staff will have the hardest time.
Profit – One of the best words of advice I received early in my career was “you can’t save yourself into a profit” and “gross hides a lot of sins.” Really what this means, our staff needs to be seasoned sales vets and as managers we need to have our department price positioned to capitalize on those additional sales. Of course and as I mentioned before; a good well followed process will help you with this but make certain your team knows the importance of the dollar and how critical effective labor rate is. Again I see many stores do this differently but make sure you are looking at this ELR correctly. This should include all discounts such coupons and other price manipulations. Next you need to determine what is your true cost per flat rate hour sold. This number should contain your average cost per hour from your technician staff and then it should also contain your total expenses. NCM does a really good job on their composite breaking this down but you can do the calculation as well.
To wrap it all up, I have found that it is easier to make changes when the going is good (like fixing your roof on a sunny day) and there is less push back from employees. Review your operation and make sure everyone is following your process for success and you have the right personnel in place and your department is price positioned for success. Good luck and more importantly have fun!!!