The first quarter of 2017 is in the books and the second quarter is almost wrapping up. As service departments go, it’s always a steady flow of gross sales, even when the market is in a slump. But neither you nor the higher-ups are happy with steady. You want to see growth; an ever-increasing influx of cash into your department. Before the second quarter is up, take a look at where you stand and what you can do to improve in Q3.

Evaluate Your Current State

There are a couple KPIs to monitor, telling you how your service department is doing overall.

Gross Sales

Obviously, the amount of service labor and parts you sell is a key indicator of your department’s health. Compare it to the same period of the previous year; look at both the quarter and YTD. Month-to-month differences are normal, although increases over the same month in the previous year may be notable.

Are your gross sales up in your service department from the previous year, in the same time frame? If they aren’t, is there a clear indicator as to why? Steady growth of 3-5% is enough to prove your department is on the right track. If you’re behind last year’s numbers, look for a reason why, and find a solution.

Net Income

Did you record profits every month after expenses? That’s the most obvious window into your service department’s health. If you’ve been the same or better in gross sales, your net income should be trending the same way. If not, there’s a problem with expenses or discounting somewhere along the line.

Hours per RO

The acceptable hours per RO varies by store, but you should see a trend upwards. Are the hours falling? It could be due to a new service advisor or another explainable factor. As experience increases in the service drive, your hours per RO should follow suit.

Number of ROs Written

This is where your volume is evident. If the number or Ros written has increased over the same time last year, you’re on the right track. That often means the sales department is healthy and your CSI scores are doing well also, resulting in repeat business. If RO counts are dropping, look to your customer satisfaction scores. If there’s a trend of displeased customers, it’s an issue that needs to be addressed NOW!

Break It Down by Service Advisor

You can rank your team members at the service desk offhand, but do so by the numbers. Look at the gross sales, hours per RO, number of ROs written, and gross percentage, and see if there are anomalies that need to be fixed.

• Discounting can cause an advisor’s numbers to be skewed. It will show up in GP.
• An advisor with low hours per RO may need incentives to kick it up a notch, or training in selling techniques.
• Low numbers or ROs written indicates a weak advisor or someone in a slump. Be sure to consider time off when looking at RO counts.

Because your service advisors are responsible for the majority of the sales, keep them accountable. Let them know you’re aware of the differences in their performance. However, instead of discipline, offer assistance to correct the problems.

Make Adjustments for the Second Half

A new month, quarter, and half is around the corner. It’s the right time to make changes, allowing you to kick off the second half strong. Learning from your first half statistics, coach your team towards even more success.

• If discounting has been an issue, require your service advisors to get you to sign off before a discount is applied.
• If RO counts have been down, put together a service department advertising campaign with your GM, driving traffic.  
• If service advisors are suffering in hours per RO, get strict about walkarounds, upsells, and product promotions.

One thing you can always count on: the guy in the big office isn’t satisfied with status quo. Stretch your service team towards improvements – for everyone’s sakes, not just the big guy upstairs.