Wednesday, February 18, 2009

The Cure for Everything is Effective Labor Rate - ELR

Since my last exercise I have had so much response regarding increasing ELR. Immediately questions arise about customer satisfaction and decrease in production. I suggest that we can have it all. We just need to train our service advisors how to sell effectively. I have made a career of walking the parking lot touching the car and keeping my WIP to a minimum. I also have traveled and worked with hundreds of service advisors. We always look for ways to sell service more effectively.

It all starts with a daily service advisor sales meeting. I have been a preacher of the technician production meetings. Each day I walk out to my shop and have a quick round meeting about production.

…What’s up guys? Just a hello, how were your FRH (Flat Rate Hours) yesterday? What’s going on today? Any issues. I know the answer to that. We meet every day. The issues are over. It’s all about production now…

As of February 1st we do the same thing with the service advisors. I mean SALES PEOPLE. Dealers, is that no what we are here for? We are here to sell things. I think we forget that sometimes. We get stuck in our routine. We mundanely meet customers, fade heat and try to fix cars. What happened to selling something?

So we are having regular service advisor sales meetings. My new agenda looks like this. Arrive at work, 7:30 AM. Some may argue that point. I grab a cup of coffee and head to my office. Of course I check my email and go to the ROAMS tool and print out yesterday’s sales reports.

1. Report 1. Summary Report.

2. Sort by individual service consultant.

3. Yesterday

I print the reports and head to the meeting. I usually run a RAP Report from ADP as well.

“Who sold the most FRH yesterday,” I ask? We quickly review the service advisor sales, gross profit and ELR. Simple and Effective, I say. Quickie incentive pay out and we are starting our day.

I have one store that has moved the needle from $121 per hour as of Jan 31st to $138 per hour today. I think that is quite an improvement. If I tell you about the others it just may make you cry.

Unless Chris Collins manages your store, he is the king of ELR. I know one of the BMW deals have an overall effective labor rate of $167. CRAZY GOOD STUFF!

Congrats to his team and to mine as well. They are moving the needle. Time to walk the parking lot again.

Steve Shaw

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