We do a lot of brain busting determining how to generate sufficient stall revenue, so that the entire dealership’s expenses can be covered by service and parts. Essentially we have established there are three distinct work types in auto service stalls of all genres:
1.Quick service maintenance
2.Skilled repair work – first owner vehicles
3.Independent garage-type repair work – second- and third-owner high mileage sleds
A quick service maintenance stall will generate the least amount of service and parts gross profit, maybe $5,000 to $7,000 per month in a typical dealership environment.
The skilled repair work stall – first owner cars (dealership-type work) will generate about $10,000 – $12,000 per month.
The independent garage-type repair work – second- and third-owner sleds – will generate a handsome $20,000 per month. That last one is a dang good reason to move the dealer’s boat out of the shop.
Wanna mix it up?
The reality is that quick service, while not a big-time gross profit generator when compared to other forms of vehicle-related toil, is absolutely essential for customer retention, especially of the first owner vehicles. The wise service and parts managers will want a mix of all three types of stalls to maximize the shop’s gross profit – two for essential customer retention purposes, and one for pure ecstasy, shooting for 100% fixed absorption.
Of all three stall types, quick service, by far, requires the most attention to maximize gross; otherwise it ends up being nothing more than an oil change center (think “cattle drive”) applying tons of pressure on a worn-out service and parts staff for not much ROI.
Note: One of the wisest investments of time service and parts managers can make is to visit a successful aftermarket quick service center to experience their tightly-driven processes, which are generating some 18% net to sales in the typical operation, according to the National Oil & Lube News annual survey. A nice return indeed, but consider there are two to three techs per stall in their business model versus one in a dealership.
Aftermarket sales stats show an average customer expenditure in the QS industry is around $45, with some franchises reaching up to a sweet $70 per visit. The quick service success technique isn’t rocket science, and the simple key is to inspect pre-determined items every time, show the inspection results to the customer, then ask the customer to purchase when needed. The same procedure is copied on every vehicle, every time, no matter what – sort of a tough love thing.
In that regard, the aftermarket has generated some vital statistics on how many of what should be sold (i.e. air filters, cabin filters, etc.) in a typical day based on vehicle count, and those are specifically measured to ensure targets are attained every day, or a “rapid” fix is put in place.
Want some love?
I have developed a simple Excel spreadsheet for my readers to analyze their own results on key maintenance items consistently up-sold by aftermarket QS. If you would like a copy to make your own study, just send me a note at firstname.lastname@example.org and title the subject line “Quick Service Study.” You will simply grab a batch of quick service ROs, enter the requested data and a comparison of your staff’s performance versus the aftermarket will magically appear. You might even use this workbook more than once if you are serious about QS performance. I hope so.