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FOB Service Case Study_0717

When Joe Messer looks out over his service department, he sees a team that works together cohesively, churning out 33,000 repair orders, $1.5 million in gross and 22,000 total shop hours in 2016 with only 10 bays, eight technicians and three service advisors.

But that wasn’t always the case at Spitzer Chevrolet Amherst in Amherst, Ohio. Just two years ago, the shop was rebounding from losing its franchise and the service advisors were languishing with low average repair order, average hours per repair order and closing ratio.

Turning those numbers around, however, didn’t require a silver bullet, Messer says.

“It’s all process,” he says. “You have to love your process.”

 

The Backstory

Spitzer Automotive is a 15-location dealer group in the Ohio, Florida and Pennsylvania region. Among those 15 stores are roughly 50 service advisors, hundreds of technicians and 15 service managers that work together to drive results.

Messer’s location, in particular, has had a rocky history. After General Motors filed bankruptcy, the store lost its franchise and had to fight and work to get the franchise back. While a struggle, Messer says that it kickstarted a push to revamp and rebuild the service department. Revamping that department, however, caused significant turnover of service managers until the now 33-year-old Messer was hired a year and a half ago.

 

The Problem

Messer arrived with eight years of management experience at the Ohio-based Kasper Auto Group and his right-hand man, a shop foreman with more than 30 years working for some of the top 100 dealers in the country.

When the two arrived, what they found was a service department stuck in the old ways of operating and refusing to modernize.

“Everything moves real slow at a corporate level,” Messer says. "If you want to do anything new or innovative, it takes a long time to get things through the red tape. They wouldn’t even try because they knew it was a hassle.”

And the numbers reflected that: Eight technicians were only billing 600 hours per month on a 25-day month with an average hours per repair order (AHRO) of 1.2—significantly below industry standards. The bottom line: Service advisors weren’t selling enough, and technicians weren’t capitalizing on the vehicles coming into the shop.

 

The Solution

Messer and his foreman knew they had a true-blue system that had worked in the past that would improve communication between the service desk and technicians, standardize processes and improve numbers:


Hire the right staff

Upon implementing these changes, it became clear that not all of the staff was going to make the cut. Some quit and others were let go, Messer says, which allowed him to create a new team, particularly when it came to the three service advisors. When hiring, Messer says that he hires for culture, not for ability.

During interviews, he will ask about their hobbies and what they do for fun, which he says reveals the candidate’s mindset. For example, if a potential service lane porter enjoys building model airplanes in his spare time, Messer says it’s likely that he’s bright and could potentially move up in the company.

With the service advisors, Messer ended up hiring three women, a decision he says has paid dividends as, in his experience, women are better listeners and will take the time to listen to customer’s concerns versus diagnosing the vehicle upfront and make the mostly female customer base feel more at ease.

 

Service advisor training

After hiring, Messer made it a point to make sure that his service advisors had the proper training. That means not being afraid to ask for the sale, charging enough, not discounting repairs and doing proper pre-writes that help set the advisor up for success during her interactions with customers.

“That’s great she’s selling the job but she’s making a whole bunch of gross but not keeping it,” he says. “You can outgross anybody. The real name of the game is keeping it.”

 

Set expectations

Transparency is ultimately the key when it comes to benchmarks, Messer believes. You need to properly explain to your service advisors the numbers and benchmarks you’re looking for, how they were calculated and provide ways to update them on their progress. At Messer’s shop, he has a big white board in the back of the shop where he lists production percentage, gross dollar, CSI score, RO hours, closing percentage, effective labor rate and gross in hours, along with the total shop production.

“There’s no surprises,” he says. “I like to keep everything as clear cut and transparent expectations as possible.”

When it comes to service advisor benchmarks, Messer looks for a 2.0 average hours per repair order, 40 percent closing ratio and $80 effective labor rate on a $110 door rate.

 

Implement processes

Ultimately, none of these changes are a silver bullet—or even innovative, necessarily, Messer says. Instead, it just comes down to being a process-driven operation. He’s created SOPs for all of his service advisors and through the training, instilled expectations when it came to those processes, including looking up whether vehicles are under warranty, greeting customers by name, being prepared, having recommendations ready, and not overloading the shop.

Messer also created a Google Doc that acts as a live routing sheet and each employee is equipped with an earpiece and Skype to easily ask questions without leaving their workspace.

 

Utilize technology—if it’s helpful

In addition to his use of Google Docs, Messer also began using General Motors’ menu presentation tool, a multipoint system that acts as both a coaching and a presentation tool. On the tracking side, it tracks closing ratios, hours from technicians, average sold hours, the percentages of additional service recommendations that are requested, etc. While the implementation took roughly two months of “boot camp” for employees to get a handle on it, Messer says it’s made a huge difference in increasing closing ratio.

However, when it comes to technology, Messer says you need to see results. If it’s not a better process, there’s no point in paying for a piece of technology.

In particular, Messer eliminated the use of an advisor tool that he says was making service advisors lazy and not prepare for appointments. The result? AHRO, menu penetration, shop hours and gross went up almost immediately.

 

The Aftermath

The numbers speak for themselves: In less than a year, shop hours went up 21 percent, AHRO was up to 3 hours, customer pay effective labor rate was up 6 percent, and technician productivity is n now at 92 percent. Eight technicians now generate $85,000 gross, 1,000 shop hours per month minimum and 900 repair orders per month.

In addition, his three service advisors now consistently rank in the top three across all Spitzer locations. That achievement has other service managers coming to Messer for tips and sending their advisors to his facility for training.

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