You find out your effective labor rate is below where it could be. Or your hours per repair order are lower than you want. You can see the gap in the report. Now what are you going to do about it?
That is where I like to start the conversation. A comparison can help you recognize an opportunity, but you still have to understand what is causing it. Then somebody has to do something differently.
I have worked as a technician, an advisor, and a Fixed Ops Director. I have also spent a lot of time helping turn around stores. Across those roles, I have learned how much the explanation matters. When a manager understands how we arrived at an opportunity, and the team understands why a change makes sense, we have a better chance of getting it done.
When a manager understands how we arrived at an opportunity, and the team understands why a change makes sense, we have a better chance of getting it done.
Find Out What is Creating the Gap
The first step is identifying why. If effective labor rate, or ELR, is underperforming, where is that happening? Is it a certain labor type? An operation code? An advisor or technician? Is the issue across the department, or isolated in one area?
Let the data tell you where to look. You might think oil changes are pulling down the department’s ELR. Break the work into oil changes, maintenance, and repair, and you may find that maintenance is where you need to spend your time.
Then look at the operation codes that make up maintenance. Which ones have a low ELR? How many are you selling? You may find three or four underpriced services that help explain what you are seeing at the department level.
That gives you something specific to work on. It also gives you a way to explain the issue to the manager. I could jump straight into a report and point out that an alignment is underperforming compared with the group. But if I walk someone from the department result down to the labor type and then the operation code, they can follow how we got there.
When you work with these numbers every day, it is easy to go straight to the answer. The person you are coaching may need to see the steps. Start at a high level, then work down to the detail that explains the opportunity.
Give the Team a Target They Can Work On
Hours per repair order is a good example of a metric that can leave people stuck. It covers a lot of different situations, and a one-line repair order does not tell you everything that happened with that customer.
An advisor might recommend additional work, and the customer might say, “Not today.” If that customer comes back later for the work, both visits could produce a one-line RO. You do not want to penalize someone who made the recommendation just because you are looking at the line count.
When a team gets stuck on that broader number, I will often steer the conversation toward one-line oil changes. I ask where they think they have their best chance at an upsell. They talk it through, and they almost always come back to oil changes.
Now we can ask whether tracking one-line oil changes would give them a better target. That takes an issue with many possible starting points and narrows it to a type of visit they can examine and work on.
The point is to understand where an appropriate additional service could have been recommended and what happened when it was. The customer still gets to decide. We want advisors to recognize the opportunity and explain the work the vehicle needs.
A department goal becomes more useful when the people responsible for it can see where to start. “Improve hours per RO” can be hard to act on. Looking at one-line oil changes gives the team a more specific conversation to have.
Explain the Numbers to the People Doing the Work
There is a tendency in this business to keep information with the manager. Some information should stay private, especially individual personnel matters. But the numbers behind a performance goal need to reach the people who are expected to help achieve it.
Show the advisors where the department is underperforming. Explain why you are making a change. You might be increasing a service price because the data shows you are well below what others around you charge. Sharing that context helps the advisor understand the decision and feel more comfortable presenting it.
That buy-in matters. Advisors are the ones talking with customers. If they do not believe a change makes sense, that can come through in how they present it.
The same applies to recommending more service. I approach that as a matter of integrity. We should be showing customers the work their vehicles need and helping them understand it. If we fail to let them know, we are letting them down.
We should be showing customers the work their vehicles need and helping them understand it. If we fail to let them know, we are letting them down.
Give the team the information behind the recommendation. Talk through the vehicles coming in, their mileage, and what the numbers are showing. Help them understand what you are asking them to do and why it is appropriate. That is a step I see people skip.
Ask What Will Change After the Conversation
Once we have identified an opportunity, I ask a manager a simple question: “What’s one thing that you’re going to do different?”
The answer tells me a lot. Sometimes the manager has a clear next step. Sometimes they trail off or cannot name one, and we need to work through it together. Recognizing the issue is only part of the conversation. We need to get to the action.
Recognizing the issue is only part of the conversation. We need to get to the action.
Managers also have to know where to draw the line. Wanting to be liked by everyone can make it difficult to hold people accountable. On the other hand, a manager who sets firm expectations but struggles to talk with people can get poor results too.
You have to explain what needs to change and then follow up on it. If we agreed to correct pricing on an operation code, the next conversation should be about whether that price is being used. If we are getting the same prices today that we discussed yesterday, we need to find out why.
Check Whether the Change is Showing Up
With some changes, you can see evidence in the data quickly. Pricing and pricing compliance are good examples. If we focus on an advisor or an operation code, make a correction, and monitor it, we can look for whether the agreed change is showing up in the transactions.
Other changes need more time to evaluate. A parts matrix adjustment may affect a particular range of parts prices. If the repair orders early in the month do not include much activity in that range, the overall result may not show the effect clearly yet. Sometimes you need a month to get a better view.
Keep the follow-up connected to the change you made. If the numbers are not moving, go back to the work and have the conversation. Check whether the change was carried out and whether the activity you are reviewing reflects it.
I enjoy helping service managers and advisors grow. Part of that is helping them work through this process for themselves: understanding the number, finding a specific opportunity, and following through with their people.
The next time a benchmark shows you a gap, follow it down to something your team can act on. Explain how you got there. Before you finish the conversation, ask what they are going to do differently. Then come back and see whether they did it.
About the Author
Dennis Bateman
Client Performance Coach
Dennis Bateman brings experience as a truck technician, service advisor, aftermarket store director, and dealership Fixed Ops Director to his work at Dynatron. After serving in the military, he returned to the automotive industry and worked his way into dealership leadership, where he became known for helping turn around underperforming stores. He enjoys coaching service managers and advisors and helping automotive professionals grow into leadership roles.
