Service improvements (Part 1): Key indicators

I recently chatted with expert Peter Daniel of ADC-Automotive Dealer Consulting about the importance of the Service Advisor, and key indicators to measure his/her performance. I'll post the podcast later this week.

ADC, a consultancy with offices in the U.S. and in Puerto Rico, provides consulting and training services to auto manufactures and dealers, focusing mainly on process and profit improvement for service, parts and body shops.

Here's an excerpt from the interview...

Al McClymont: Peter, how can you tell if your Service Advisor is doing a good job?

Peter Daniel: Well, that’s a good question.

There are some benchmarks that we look at on an international basis, that really show how well a shop is doing in their service sales performance, and that includes the Service Advisor as well.

Some of the things that we look at, and I think the key things that we should look at, when looking at service shop sales are

• The Hours per Repair Order for customer pay
• The Effective Labor Rate
• The Parts to Labor Ratio
• The number of repair orders that each Advisor writes
• The number of sold hours by Advisor
• The amount of parts sales

But I think with the time that we have today we can start out with one of the key indicators, a key benchmark measurement that’s called Hours per Repair Order.

Hours per Repair Order… the formula would be you take the number of hours sold on a group of repair orders that are written by the Advisor, and divide that by the number of repair orders.

So let’s say the Advisor sold 200 hours that month and he had 100 repair orders, so you take 200 hours divided by the 100 repair orders, that would give you an average 2 hours per repair order.

In other words, Hours per RO would be 2 hours on average. And that’s our target benchmark on an international level, each Advisor should average 2 hours per repair order.

Anything less than that would show that there’s a performance problem somewhere, whether it’s in the sales performance of the service advisor, but maybe it’s not though.

There are other factors that could be underlying or behind the scenes...

Related links:

• Podcast of the full interview
• Service improvements (Part 1): Key indicators
• Service improvements (Part 2): Key indicators

(to be continued...)

Tags: ADC, Autologica, Peter Daniel, Al McClymont, DMS, dealer management systems, Autologica, Service Advisor, after-sales, auto dealer, auto dealers, car dealer, car dealers, motor vehicle dealer, motor vehicle dealers, automotive, auto industry, automotive industry, auto service, best practices

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