Among the top KPIs your service department should be evaluating, the hours per RO is one of the most important. After all, you don’t want a bunch of service advisors that are content to deal with simple oil changes all day. You want a team that’s always hunting down new opportunities and chances to increase revenue. Thankfully, we have some innovative ways to grow hours per RO without putting forth too much effort.
We’ve already discussed ways to increase the Effective Labor Rate. This article goes hand-in-hand with that to optimize revenue.
What Is Hours Per RO?
Hours per RO, otherwise referred to as H/RO, is a factor showing employee productivity. It’s found by dividing the number of hours a technician works by the number of repair orders completed.
Generally, the hours per RO goal should be somewhere between 2.3 and 2.9 hours. So, for example, if your shop serviced 350 vehicles last month with 675 produced hours, the H/RO is 1.93. There’s clearly room for improvement, but it could be worse. In fact, if the number is near 1.0, it’s assumed that you are just taking orders without focusing on what the customer actually needs.
4 Ways to Grow H/RO
1. Do an Extensive Walkaround With the Customer
The most effective way to boost hours per RO is to perform a complete walkaround. With most walkarounds, you should easily be able to find another 0.3-0.5 hours of work. All that’s needed is an extra item or two to increase productivity.
It’s important that the customer is with you for the process. First, you want complete transparency, showing them what needs to be done. Plus, the customer might point out some issues while doing the walkaround that you might have missed.
2. Take Your Time Training Service Advisors
There’s never a reason to rush training of the service advisors. After all, the ability to pay attention to details can change the dealership’s hours per RO, thereby boosting profitability to new heights. You want a friendly and considerate service advisor, but they must also be able to turn on the sales factor too.
The service advisor is the most important person in your sales team. They must know how to maximize profit by ensuring that all of the services needed are provided. To do this, they must understand every service that is offered. Host regular training sessions with the technicians so the advisor can better understand the jobs provided. Plus, this knowledge will help them better explain the services to customers.
3. Reference Schedule Maintenance and Vehicle History
The majority of owners never look at what the manufacturer recommends for the vehicle. They also don’t track the scheduled maintenance, giving you the perfect opportunity to help out. As the walkaround is performed, the service advisor should take note of the car mileage. With this information, it’s easy to compare what the manufacturer recommends. You can also see if anything is overdue.
Once that’s done, take a look at previous notes to see if the customer rejected any services last time. If so, now would be the best time to recommend them again.
4. Boost Revenue with Non-Essentials
Once all of the required maintenance and services are performed, it’s time to figure out what else is valuable. Don’t forget the value of adding fun accessories or detailing the car to gain more hours per RO. When appropriate, these should always be an option.
As with any KPI that you are attempting to improve, all that’s needed is a little effort. Your small changes can have a profound impact on the bottom line.
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