Boating Industry

March 2017

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March 2017 | Boating Industry | 27 [ Service by the Numbers ] www.BoatingIndustry.com one another on price and parts becoming more readily available for cheaper online. "That's why we're focusing on the service de- partment, because there is more of a margin," said Kelly Fullerton, chief operating offi cer at Eric's Outboard Marine Service, Inc. "That's really where we can make the most money … so that's where we want to gear our attention toward." Tracking service metrics helps dealers control the department's expense ratios, because the tech- nician as an expense ratio has the biggest impact. "Nine times out of 10, if a dealer gets their tech- nician expense ratio in line, unless they've really gone wild with spending in a different area, their net profi t will be OK," said Spader, who added that a service department's net profi t should be at 20 percent or more. "Because to get the technician expense ratio in line, you have to have the right labor rate and the right ef- fi ciency, and to do that you've got to have a good management system and program going. And if that's the case, usually when that ratio comes into line everything else will be OK." The service department also has a strong effect on margins on the front end. Think of a salesperson who wants to close a deal with a customer and wants to add a couple thousand dollars, and claims it's worth the price be- cause "we've got the best service around." Will the salesperson be confi dent saying this without feeling like they are lying? Will the customer believe the salesperson? "A good service department will add a couple of points just in hard cash to the net of the com- pany, but it will also add a good couple of points or more to the sales department because they can sell with such confi dence and have the ability to sell more," said Spader. "That's the hidden effect that so many dealers don't understand of when sales is trying to close the deal and they can't because they're scared to death of what the customer is going to experience in service." And of course, there's the huge benefi t a well-run service department brings customers. If customers aren't sitting around waiting for their boat because the depart- ment is effi cient and productive, they are more inclined to keep doing business with the dealership. "Somebody's not going to wait fi ve or six weeks that their boat is down in the summer to get it repaired," Fullerton said. "Or they're going to go somewhere else and you've lost that customer, maybe for good." "For our customers, the more effi cient we can be, the high quality of ser- vice that we give, we can schedule and turn these boats in and out within a day or two, and that's what our customers want to see," added Olsen. "They want to see it done right and they want to see it done fast." "A good service department will add a couple of points just in hard cash to the net of the company." — JOHN SPADER SYSTEMS FOR SERVICE There is no one way to track service department metrics – ultimately, whatever way a business can ensure tracking is done regularly and correctly is the best method to choose. Seattle Boat Company uses a dealer management system to build work orders, bill them out and track technician time. The team uses the software to clock in and out and the company can pull a report from that system. "We can break it down into days, weeks or the month, and each column for the day we have productive hours for that day, we have standard hours – which is fl at-rate hours – for that day, we have our time clock hours and then below that sick leave, vacation, holiday if it pertains for that day," said Olsen. Eric's Outboard uses a combination of a software system and a whiteboard so technicians can readily see how many hours they billed and worked. "I think the whiteboard is benefi cial because the technicians themselves can see whether they're profi table for the company, whether they're covering themselves or whether they maybe need to pick up the pace a little bit," said Fullerton. As for using the software, "We know where we need to put our resources. We know whether that department is making money. We left a lot of money on the table [in the past] because we have not been able to service our customers." Spader Business Management also offers workshops to train dealers how to track service department metrics.

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