Issue link: https://read.dmtmag.com/i/306360
20 | Boating Industry | May 2014 [ KING of PROFITS ] www.BoatingIndustry.com like installing Roswell tow-behind towers the company purchased on clearance, has provided enough of a boost that the company's techni- cians stay busy throughout the winter months. Storage is a key part of the equation, a situ- ation that became painfully clear after the com- pany stopped storing boats in 2008. "Storage is a bit of a pain here, because the weather is so terrible," he said. "You get covers blowing off and ripping or you get heavy snow breaking things [so] we said no more storage, it's just too painful for us." The result was a significant slowdown in win- terization and off-season business, causing the company to revive its storage operation a few years later, as well as creating the VIP program. Beauchamp feels that any profitable service business should be tracking its efficiency, both to ensure technicians are working quickly and to prevent leakage when hours aren't charged to customers. "The guys that don't think efficiency is im- portant — especially the technicians themselves — is because they're not very good," he said. "A good technician can do a job in the required time or even quicker than the required time because he knows what he is doing." He added that just a couple hours per day at $100 per hour could quickly add up to $60,000 or more in time worked at his business that isn't charged to the customers. Alberta pays its technicians straight time, with a monthly bonus for efficiency. The com- pany only uses menu pricing on winterization and tower-installation jobs, but has explored ex- panding its menu offerings. "As a service department, you really do have to try and keep the customer satisfied. If that means staying an extra half an hour or expediting some- thing to get it there quicker or running to Calgary to go get a part you need, you just have to do it, be- cause it comes back in so many ways," Beauchamp said. "As an owner you really have to keep all of your customers going and happy and do whatever you can. The guys that I've let go over the years or have gone [had] the old attitude [of] 'We'll get to it next week.' Those guys are all gone, they're out of business or they're working for a dealership that's hanging on by its fingernails." A trainer's perspective John Spader, president of Spader Business Man- agement, has talked with his fair share of service managers who told him their primary objective is just breaking even or not losing too much money to attract the boss' ire. While his company offers a variety of train- ing and consultation services at a range of levels, Spader sees a handful of bedrock concepts that can help dealers improve their service operations. One is "Collect-able Efficiency," a term Spader trademarked that measures the differ- ence between hours worked and hours col- lected in the form of billable hours. It's not how good the department is at doing what's told, he said, but rather how good the team is at turning all available hours into cash. While some dealers with a healthy service department would advocate diversifying by add- ing storage, a detail shop, canvas or fiberglass re- pair, Spader says managers of struggling service shops need to decide whether to focus on stabil- ity or growth. "Three-quarters of service departments aren't stable, so adding to service is just going to mean they lose more money or they … add a lot of risk to their business," he said. He recommends placing a strong focus on technician efficiency, and says dealers shouldn't make their service operation more complex un- less what they have going is going well. "If what you have isn't working well, the last thing you want to do is add anything at all to this thing until you fix it." Dealerships that are truly struggling with service, he said, should shadow high-performing automotive service operations to compare how their own process different in terms of the cus- tomer experience. The difference in presentation, he said, oftentimes "screams at you." Increasing preventative maintenance could be part of the equation, as well as storage, which can be a platform to help fill the off-season months with business. He added that many shops try to attract insurance claims or other sizable jobs dur- ing the slow months by offering a discount to customers willing to wait for the most opportune time of the year for the dealership. Addressing the widespread phenomenon of shops frequently discounting ROs for custom- ers that object to the cost of a repair, for exam- ple, Spader says the problem usually originates on the front-end of a service department's in- teraction with a customer. "They didn't give them an estimate … they didn't get pre-authorization, they didn't diagnose well, they got in and found out there was more, and then they fixed it and the customer showed up and [the bill] was more," he said. "It's death by a thousand little cuts." Spader added that these situations often re- sult from not having the best people in the right positions within the business, which should be a major focus for every dealership. "If they've been struggling with it for years, they don't have somebody that understands [ser- vice] and is passionate about it," he said. "That's the number one thing, get somebody leading the department that gets it and is passionate about service … because too many dealers are trying to manage both [service and sales]. It's just not the same skillset." "That's the number one thing, get somebody leading the department that gets it and is passionate about service…" — John Spader, president, Spader Business Management P16x20-BI14MAY-Service.indd 20 4/17/14 10:30 AM