Managing capacity
Summer is here and most shop owners look forward to the changing of the seasons as they usually bring about steep surges in customer traffic. However, if not prepared for and controlled, the increased business may not help the profitability of the shop. Being busy is not as important as how you are being busy.
Increased customer traffic that comes as a result of seasonal changes often leads to shops experiencing a disruption in the routine processes in the flow of their work. That may result in overworking of staff, reduction of shop efficiency, and less customer satisfaction.
In addition, while the shop could experience an increase in sales, it could see a decrease in profits, a decline in shop moral, and a sharp drop in business over subsequent months. That sharp decline is often attributed to the shop’s inability to maintain its routine inspection process and follow-up procedures.
How do you best manage this increase in business by turning all of the above pitfalls into a smooth flow of profitable business revenues and profits?
When you try to exceed shop capacity, the problems begin. Shop capacity is not defined as the number of vehicles you can process in a day. It is the total number of billable hours that your shop can consistently produce in that day.
For example, if you have three technicians each fully capable of billing nine hours a day, your capacity becomes 27 hours per day. That level of production will vary depending on many variables; however, for purposes of this example, we will use 27 hours. Now that 27 hours could be spread out over many vehicles, but our objective is to average 3.0 hours per vehicle.
Using that benchmark, the service advisor advisor in a fairly efficient shop would take in nine vehicles. If the overload caused by predictable season changes brought the number of vehicles up to 18, our hours-per-vehicle would drop to 1.5. That means the service advisor and technical team would have to handle twice as many vehicles to achieve the same capacity.
In essence, the more vehicles, the less time we have to devote to each customer and to each vehicle, thereby quickly reducing our efficiency, profitability, employee satisfaction, and customer satisfaction.
Ultimately, an excessive number of vehicles will actually cause so much inefficiency that the shop’s capacity will be reduced. Imagine what the shop would be like if the team took in 27 vehicles. We refer to those types of shops as a zoo.
Possible solutions
Customer traffic should be controlled through a well-thought-out and carefully implemented marketing plan, and the use of trained service advisors.
Seasonal changes are obviously predictable. Armed with that information, a shop owner should approach all of the shop’s customers and advise them that during those predicted periods, obtaining appointments and/or getting into the shop with an unanticipated repair becomes quite difficult, if not impossible.
The objective is to encourage the customer base to plan its maintenance schedules around the busy periods. That marketing approach can be also be used on the motoring public with much success.
Many shop owners have been successful in rescheduling their customer business, as well as obtaining many new customers, by getting them in a month or so prior to the busy period.
Scheduling customers to an earlier period works to relieve much of the pressure during the critical period. Many shop owners and advisors use a variety of incentives to persuade customers to bring their vehicles in a month or so early.
Service advisors
During the last two decades, we have seen very little increase in shops investing in training for their service advisors. More recently, because of the economy, we have witnessed a decline in the number of shop owners making this critical investment.
Investing in the training of your service advisor in scheduling, customer communications, and other operational processes is critical to the success of every shop. Year after year, we see shops spend thousands of dollars on marketing efforts only to have many of the customers mishandled and often lost by untrained service advisors.
This lack is emphasized during seasonal increases in customer traffic. It is early summer for most of the country, and there have been record temperatures in many states. Shops have become overloaded and overworked, and they earn less profit as a result.
Quality and effective service advisor training could assist with minimizing the pitfalls mentioned in this column.
It’s not too late to prepare for the seasonal change that’s going on right now. Control customer activity through marketing efforts and service advisor training.
Find the very best training you can, and enroll your service advisor now.
You may say: “I cannot afford to be without my advisor during this very busy time.” I say hogwash. You can to enroll your advisor in on-premise training that keeps him or her be away from the counter for only a couple of hours a week.
Robert “Bob” O’Connor is president of R. L. O’Connor & Associates Inc., a Seattle-based automotive operations and management training and consulting firm. He is best known globally for his automotive business management workshops, continuous improvement Bottom-Line Impact Groups, and his sales training division, the Service Advisor Academy. O’Connor is an instructor approved by the Automotive Management Institute (AMI) and an AMI EXCEL “Guarantor.”
