You Need to Drill Down if You Want it to Come Up

Written by Perry Phillips

“Oil, water, CSI, or profit – you need to drill down if you want it to come up.”

If you’re looking for increases in CSI and/or profitability in the department (and who isn’t?), where is the first place you look?  Usually, we start with some sort of report that provides Key Performance Indicators (KPIs) as defined by the department and/or the manufacturer.  Some examples might be:

  • Dealer Management System (DMS)
  • Manufacturer reports
  • 3rd Party vendors
  • Internal Documents

These results are useful and quite adequate for a lot of managers and employees.  Some might not have a need or desire to look further, especially if things are running smooth and everyone is happy and making money.

However, if you are looking for new or different ways to achieve higher levels of performance, just looking at the results page doesn’t always provide a path to improve.  And often they become an “autopsy” report yielding less than desired insight on the what and the why.

“Drilling Down” doesn’t necessarily mean you need to create an information overload situation and wind up not being able to focus on the big picture.  Let’s look at a sample game plan on where to get started.

Customer Dependency

Determine what your current reliance is on the variable side of the business.  Do Warranty and Internal account for the majority of your flat rate hours produced?  If so, then you may want to look at ways to improve your customer pay contribution.  You know what your CP hours per repair order are and what the effective labor rate is.  There may be other factors to consider when looking at customer pay hours per repair order as the main indicator of performance.  Some include:

  • Items per CP RO
  • 1 item CP ROs
  • CP work mix – maintenance, competitive vs repair
  • Menu sales success – opportunities vs sales
  • Average mileage/year model
  • CP ROs with no labor/parts
  • Repair pricing (GRID) utilization
  • Effective labor rate
    • Competitive
    • Maintenance
    • Repair
    • Overall CP ELR

In addition, remember labor sales come from two areas:

  • Point of sales – what advisors can recommend based on time, mileage, and appearance
  • Post-Diagnostic – these are items recommended resulting from a diagnosis or a multi-point inspection performed by the technician

You may or may not have the ability to obtain this information with your current DMS or 3rd party, so a manual repair order survey evaluation may be required.

Let’s assume you have that information or at least enough to identify any opportunities that exist.  First, look at your current performance in these areas and establish a baseline.  Next, choose just one area of opportunity to tackle.  Taking on these tasks one at a time will help keep the focus and lessen distractions.

A sample baseline analysis may look like this:

CP HPRO                           1.4
Items per CP RO               1.2
1 item CP RO                   48.5%
Menu sales success        12.5%
Average mileage             68,750
CP ROs > 30,000 miles     95%

Establish a goal for each of the deficient areas.  These goals can be your own target or industry standards.  Some common goals for a few of these KPIs would be:

CP HPRO                         Relative improvement – no static goal
Items per CP RO             3.0
1 item CP RO                  <35%
Menu sales success        60%

In this scenario, increasing menu sales would also improve the other KPIs.  So, we’ll start with that.  What is the opportunity for a menu sale?

  • Mileage – at or near (within 2,000 miles) of a published mileage interval for recommended maintenance operations
      • Factory recommendations
      • Dealer recommendations – consistent with MFG recommendations

What is considered a menu sale?

  • Maintenance operations sold with a total sales price => published menu price
  • Same-day sales

Perform your analysis and review the individual results with each advisor.  Establish your baseline and develop an improvement plan.  You may find obstacles are preventing these sales when reviewing the data with the employees.  Some of these obstacles may include:

  • We don’t have a menu
  • Our menu is outdated
  • The prices are inaccurate
  • Prices are too high
  • The menu doesn’t match the online menu
  • Not enough shop capacity to perform additional work sold

Address these obstacles, whether real or perceived, and gain concurrence from staff on menu content and pricing.  Once completed, begin your measurement of this one KPI.  Improving the menu sales success in this scenario would also improve some of the other KPIs like items per CP RO and the reduction of 1 item CP ROs.

Once you start to achieve desired results, continue to inspect what you expect and share the results with your team.  Discipline and consistency are key in adding menu presentation and increased sales to the daily routine.

So, drilling down doesn’t necessarily require a lot of work, just focus and discipline on certain areas of the business.  Along with accountability and consistent coaching, profits and CSI will come up.

If your current DMS or 3rd party reporting doesn’t provide you with this detail, an alternative to performing a manual repair order evaluation would be to use M5’s ROSE – electronic repair order survey evaluation program to quickly obtain detailed information from your DMS.  Below is a sample screenshot of the Customer Pay Overview report from the M5 ROSE program:

From a complete Service Department Assessment to targeted Classroom Service Advisor Training options, I am here to assist you with all of your Fixed Operation improvement custom-tailored to your specific needs. For more information feel free to contact me anytime at (360) 915-2963 or

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