What Numbers do You Measure?Jul 23, 2019
Years ago, as a service advisor, and even store manager, I never really cared too much about measuring numbers. I thought everyone spent way too much time analyzing and picking apart every little number. To me, that was an exercise in futility, because knowing the numbers alone didn’t change them. Rarely would there be anything beyond an owner, manager, or DM barking something for three or four days about raising this number or that. Nothing ever permanently changed. I have always been the “sales guy,” and my brain just didn’t work that way. So, when someone said something about this number or that number, all it meant to me was “sell more stuff.” I would focus on gross sales even harder and usually that silenced the barking.
Now, years later, I have obviously figured out just how important knowing your numbers are, but which numbers? I admit to still having only a basic understanding of all the numbers that typically get analyzed in a shop. So, when the very smart people around me are all talking about the numbers, I still sometimes hear “just sell more stuff” in my head. As I moved up the ladder in my career, I found myself managing at a high level in a multi shop operation. Suddenly, I cared a lot more about the numbers as they were then my responsibility. I knew how important the typical numbers of gross sales, GP percentage, ARO, etc. were but to me there was something missing.
Still being the “sales guy” at heart, I wanted to know what we were selling and when. Most shops, ours included, did not even have a way of measuring this. For example, how often were we selling fluid flushes on oil change services? Just how many cabin filters did each shop sell in a month? How many brake fluid flushes were we selling compared to the number of brake jobs we did? How many oil changes were we doing compared to actual repairs? These kinds of numbers were the ones I had a passion for. I felt that if I knew what these kinds of numbers were as a ratio, I could make a difference and know what to focus on with the sales team.
Together with the very smart numbers people around me, we started making changes in the computer to be able to run reports on what we were selling. We designed a daily tracking spread sheet that went way beyond gross sales, parts GP, labor GP percentage and ARO. We could now see just what we were selling and when, every day.
We put columns for all the fluid flushes, cabin filters, BG MOA, paid inspections, pre-paid maintenance packages, and a few others. What these things had in common is that they are proactively mentioned and sold by the service advisors. Almost no one walks into or calls a shop and says, “I want to replace my cabin filter” or “I would like to get one of those power steering fluid flushes.” Most everything in this section of the tracker was sold to customers getting an oil change and courtesy inspection. We then compared the total numbers to the amount of oil changes and created a column that showed a ratio of the two in the form of a percentage.
I could now see daily, weekly, or monthly how well we were doing making hay from our low-priced oil change services. I originally set the standard that 35% was the absolute minimum and if that number was not reached, there was a problem. I also determined that 50% was very good. I thought, if we can sell an additional service on 50% of the cars we do an oil change on, it will change our business in so many positive ways. To my surprise, by measuring, focusing on, and training to this number, our stores were capable of much more than my original standards. We started seeing numbers as high as 80% or more, and the new minimum standard was changed to 50%. In addition, I could see at a glance how often a brake fluid flush was or was not sold on a brake job. I quickly found that these ratios effected ARO more than anything. As the additional services number rose, so did the overall shop ARO. This was because we were raising our oil change ticket amount, not just the ARO on repairs. We focus so much on having a big ARO number when we fix a car, but if you mix in dozens or even hundreds of low numbers from oil changes, it kills the whole thing. Getting the ticket amount up on oil changes is a game changer!
We measured how many alignments, shocks and struts, and other things were being sold everyday as well. We had columns for new customers, repeat customers, and even the dreaded “comebacks.”
These were my kind of numbers. In a way, I quickly became a “numbers guy” myself, though a different kind of one. Numbers are important, we all know that, but if you are a “sales guy” like me, and have always had the sinking feeling that something was missing from the numbers, try counting what you’re selling and measuring it as a ratio to something else. This will illuminate what you need to sell more of and is an easy thing for most service advisors to focus on.
Jason M. Servidio