income dollars was $574,515? How did they do it? I believe it began with having 8 technicians dedicated to working on customer equipment during their 8-hour shift. No other duties were assigned. They were not called on to unload and load trucks. They were not called to the front counter to sell equipment/parts when a crowd rushed through the doors. Techs did not pull their own parts. They worked on customer equipment. We've seen individual technicians with efficiency ratings as high as 96 percent. Take a minute and view the adjusted labor rate located in the middle of the chart under the HIGHEST category. Notice: If this dealer increased his hourly labor rate by $10.00 from $45.00 to $55.00 per hour, department earnings would increase by $127,670 from $574,515 to $702,185. Can a dealer make this kind of adjustment? Of course, it's his/her call. Is it easy? Perhaps. For $127,670, I would suggest it's possible to raise customer service to a premium level. At the technician premium level, it means zero defects and no returns. How long has it been since you increased your hourly labor rate? I am suggesting your hourly labor rate must be equitable to your business needs without gouging customers. As a reminder, focus on the SDEAR chart for a moment. I
call your attention to "My Company," which is located near the top left corner of the chart. It could be a rewarding exercise to research your files, do the math, and fill in the blanks with your numbers. Should you not be satisfied with labor income dollars
and overall efficiency, take time to determine what must be done to turn your service department into a profit center. Need some help? Give us a call. We would be delighted to hear from you. In the third article in this "Increasing Shop Profitability" series, we will discuss "Creating a profit-centered mindset."
Jim Yount is the founder and chief executive officer of Jim Yount Success Dynamics LLC. For more than 30 years, he has hired, trained, managed, sold, marketed, and motivated. Extensive real-world experience in retailing, distribution and working with manufacturers, both domestic and international, has earned Jim the reputation as a trustworthy and knowledgeable professional in his field. As a results-oriented speaker,
he is dedicated to inspiring groups of 30 to 3,000 to develop their talents and realize their full potential. As a business consultant, teacher and coach, Jim is experienced at challenging leaders to explore their operational procedures and change unacceptable practices that are producing poor results. For more information, contact Jim at jimyount@hughes.net or (903) 796-3094 or visit his website at www.jimyountsuccessdynamics.com.
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