11 Repair Orders Equal One Car Sale The gross profit generated by 11 repair orders equals the same amount you make on the average car sale!
Dealers average about $1,600 dollars in gross per car sold, not counting F&I income which varies all over the board. On customer pay, the average is about two hours per repair order at $75 effective labor rate and 75 percent gross profit. The average is about 70 percent parts to labor ratio and maintaining about 45 percent gross for parts sold on repair orders. Let's see where the numbers take us.
Think about this: Each repair order delivers about $112 in labor gross and $47 in parts gross, for a total of $159 in gross per order. That means just 11 repair orders generate more gross profit than the average car sale!
And this: Most advisors write up about 20 repair orders per day, while most vehicle salespeople see about three shoppers per day. Do the math: advisors visit with five to seven times more customers each day than your vehicle salespeople do.
Very perplexing stuff: Most dealers have vehicle sales meetings at least weekly, some daily. They focus on phone skills and closing techniques. They role-play, have walk arounds and post each unit sold by each salesperson on a huge tracking board. They reward top vehicle salespeople with trips, bonuses, and incentives. My question is why don’t you do the same for your service salespeople?Have you had a service sales meeting lately? When was the last time you trained advisers on how to answer the phone to get more customers in or how to sell tires? When was the last time you actually practiced or role-played selling a 30K or worked with them on negotiating or overcoming objections? Never is too long ago.
Get yourself out there! Get excited about your service business and your service sales team. Start by hiring the right people—people who like to sell. Train them, motivate them, pay them, and treat them like salespeople. Make sure they understand how important it is to be honest, but that they have to sell and retain customers for life. Give them the tools they need, empower them with the ability to work deals, give loaners, and get in the tire business in a big way.Make sure your service people know what you expect: Each car should get a multi-point inspection report, invite in each customer on the phone, and they need to do whatever it takes to put deals together. They need a never-say-no attitude. Reward top performers and hold them accountable. Treat your service people more like salespeople and they will perform more like salespeople.
