Article

What's A Service Advisor Worth

August 2006, Auto Dealer Today - WebXclusive

by Don Reed - Also by this author

Previously, I discussed what it takes to attain 100 percent service absorption in today’s dealerships, by implementing your front end processes in the back end (back bone) of your dealership. In doing so, you must first realize and appreciate what a Service Advisor is really worth.
To begin with, let’s determine what a good service advisor’s profile should be, and then we will determine what he or she is actually worth. First of all, an advisor must have good communication’s skills and should enjoy dealing with the public. Normally, a good technician does not make a good advisor because they think and talk in technical terms that your customers do not understand, which of course is not conducive to high CSI scores or owner retention. Secondly, they must dress like professional salespeople, similar to your sales staff in the showroom. Next, they must be compensated based upon their individual sales performance in areas such as total parts and labor sales, HOURS PER CUSTOMER PAY RO and customer satisfaction. Naturally they must be given DAILY, WEEKLY AND MONTHLY sales goals and receive written DAILY PERFORMANCE EVALUATIONS, which means they must be held accountable for their performance, just like a salesperson in your Sales Department. Last of all, they must be trained in the “ROAD TO A SALE”!

Now that you have recruited a person with good communication skills, compensated them based on their individual performance, dressed them like a professional salesperson and trained them how to become a professional salesperson, let’s look at the results that you can expect to achieve:

1. Increase in sales per customer pay RO

2. Increase in repair order count

3. Increase in CSI

4. Increase in owner retention

5. Customer pay labor gross profit at 70 percent of sales

6. Customer pay parts gross profit at 45 percent of sales

7. One item repair orders at 10 percent or less

8. Increase in “Fixed right first visit”

9. Increase in Technicians’ productivity

10. SERVICE ABSORPTION AT 100 PERCENT

If all of the above sounds like a good thing to you, then let’s now determine what this Service Advisor is worth. Please review the following outline where I am comparing the “worth” of a service advisor to the “worth” of an automobile salesperson.

As you can see by my example, a salesperson must sell about 22 CARS A MONTH to equal the gross profit performance of a service advisor writing 15 repair orders a day at 1.5 hours per RO. Now do the math and you will instantly realize the additional profit potential for this advisor without writing any additional repair orders. For example, 2.2 hours per RO will generate about $60,000 in gross profit and 3.0 hours per RO will produce about $80,000. Your “TOP GUN” on your showroom floor would have to deliver about 44 cars a month to match the performance of this advisor! Remember, a service advisor should be a salesperson, not a CLERK; thereby, enabling your dealership to achieve 100 percent service absorption. In my example, you can see that an advisor is compensated at about 10 percent of gross profit, while an automobile salesperson is compensated at about 20 percent but produces half of what an advisor does!

As a dealer or general manager you should visit with your advisors daily, let them know you care, acknowledge a good job, correct substandard performance immediately and EDIFY these advisors to their customers, managers and fellow employees.

The results will astound you.

Vol 2, Issue 5

Comment

  1. 1. Jessica Mellinger [ September 28, 2013 @ 08:26AM ]

    Hello. I am a service advisor and was interested in reading your article. However, your ad pane on the right side covers about 10% of the content! It is so disappointing to find what appears to be a good article and get hooked at the introduction, only to have these advertisements stand in the way of reading it. Please fix this problem!

  2. 2. Tyler Carroll [ February 27, 2014 @ 02:12PM ]

    wow Jessica really???? First of all I didn't even notice the ads they were off to the side. Second you think people like this just spend there life writing tips on websites for the heck of it NO they do not they do it to make a name so they can make money so unless you want to pay the author for his advise you will have to see the ads to the side because that is how he makes money.

  3. 3. John [ March 02, 2014 @ 09:58AM ]

    I just refreshed the page and the ad disappeared.

  4. 4. anika botes [ May 09, 2014 @ 01:58PM ]

    I agree completely on this article written and have been a service advisor for several years. however I think service advisors overall should always remember that they are the key in the dealership of depending if a customer comes back or not, evun to up sell!!!!! so theres much more to it than creating a salesperson. a service advisor should be able to create a geust/visit to your home. how people are treated will depend on how they feel about a certain place. create a reason why a customer would want to come back becoz he feels realy important being at your dealership

  5. 5. Matt Taniguchi [ June 14, 2014 @ 12:02PM ]

    Im a looser I like 49ers so lick my butt people

  6. 6. ham [ November 28, 2014 @ 07:38PM ]

    ill kick

  7. 7. Karl Malone [ October 30, 2015 @ 10:04AM ]

    Would you pay Alex Smith the same amount of money you would pay Tom Brady?This is the car business folks. Answer. . Your winning team needs them both. You need Alex Smith just as much as Tom. Tom Wins Championships year after year. Alex keeps the lights on. But Good Old Tommy Boy keeps those dreams rolling. Granted CSI is spotty and full of free lof's. But I say there's no such thing as a free lof. I have proven that you can hit high and score high. That's what sperate's the Alex's and the Tom's in this racket. At the end of the day a good advisor only needs to take a look around at his techs and ask them what they think. I know what mine think.

  8. 8. grease monkey [ March 16, 2016 @ 12:58PM ]

    Been in service departments for 25 years now for both domestic and imports. Advisor, Service Manager, Dispatcher, Warranty administrator.Dealer principals are more concerned with profits, rather than CSI, and customer retention. If asked most GM's will take profits over CSI. In fact your list of priorities at the top of this page lists CSI as third after R.O. count, number one being increased sales per R.O.. Periodicals such as yours, Dealer Principals, and G.M.'s are all driven by the bottom line. Service departments, more so the Service staff sell the second and third vehicles. Do you think that customers really know the "hidden" agenda of more hours per R.O.. That advisors routinely work 60 hours weeks, and are now graded on how much they sell. You can marginal CSI, but top sales, and be commended. If you have top CSI and marginal sales, you are on your way out. Sad that our industry culture has morphed into this kind of mentality

  9. 9. Donald Stratton [ July 09, 2016 @ 03:10PM ]

    I was a auto mechanic full time since 1976 I just recently last year have bad arthritis in my knees and hard for me to bend down and set list and get back up so I became a service advisor and just can't seem to find a good shop to work at I just recently worked for a shop and was averaging 22 to $24,000 of income coming in for them a week for 3 weeks I brought their work order averages from 200 and some odd dollars up to $380 and when it was time to get paid I got paid $560 50 hours of work I worked Monday I'll be there early in the morning even before anybody got there and I would only put my hours down from 8 o'clock till like 5:30 or 6 even sometimes I was there till 7 I showed them that they should check things on cars like batteries when they come in and so forth and just in the first three weeks that I worked there we did over 2500 dollars worth of batteries of things that were being missed they did not check we did lots of belts and we upheld a lot of honest jobs and when it was time to get paid I got like $10 an hour that is really sad well I quit today and they looked at me like why and honey put that damn is like why do you think I wasn't about to work somewhere with at my skill level that I work for 40 years to develop for $10 an hour I might as well go to McDonald's and swing burgers this is why some owners that own auto businesses can not make out because they don't want to hire anybody good to pay them so you get what you pay for

 

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