You’ve probably heard the term “felt-tip review.” If not, a “felt-tip review” is when a repair order is reviewed to determine if certain policies have been followed.
During the review, we would determine if the advisor used the correct labor pricing and that the technician was flagged properly. From a sales perspective, verifying that mileage-based services or menu opportunities were sold. It is recommended to review a minimum of 25 repair orders per week for each advisor. This will aid in establishing coaching opportunities for that advisor.
So, why should I do this? You’re able to run a report in your system that tells you everything you need, right? In most cases, our managers look at the overall average. For example, if they have an effective labor rate goal of $150, and their report says $151, they are satisfied. And who has time to review the pricing on 25 repair orders anyway?
When you review the repair orders, you’ll find opportunities that are costing you money. That’s why we developed a tool to help review the repair orders for you.
Our ROSE+ software quickly surveys your repair orders and highlights pricing that’s out of line. This allows your managers to spend more time on the lane coaching and less time in the office looking at reports.
Here is an example of 25 repair orders with an average effective rate of $135. The stores set a goal of $130. Look closer; two of the repair orders had the labor reduced to $100 per hour, and one repair order paid the technician 1.0 more than they should have. When we change the labor sale to the correct amount and pay the technician the proper time, our effective labor rate increases to $147. That’s a $12 per hour increase in the effective rate. If you generate 1000 flat-rate hours per month, that’s $12,000 in lost labor sales or at a 70% gross profit percentage, $8500 in gross per month.
Over the last few years, labor rates have increased in a way we’ve never seen before. These increases are allowing our managers to meet and exceed their effective labor rate goals with little effort. This has created a lack of oversight of this metric and is leading to losses that no one is being held accountable for.
Rather than managing to a goal, let’s make sure that each repair order has the correct charges. Or, instead of raising the door rate, review our repair orders and check if we are collecting the rate we should be.
Our ROSE+ software takes a deep dive into your repair orders to uncover ways to increase your profitability!