Your #1 source for auto industry news and content


8 Steps to a More Profitable Service Department in 2018

With 2017 coming to a close, the focus is on starting the new year with a bang. Overall, the service industry doesn’t worry about ebbs and flows like the sales floor, and certainly never to the same extent. Regardless of how well your service department performed this year, you’ll be expected to do more in the coming 12 months. If it was a record year for you, that can be a pretty significant challenge; one where you aren’t quite sure it’s even possible.

There are always areas for improvement, though. By fine-tuning your well-oiled machine, you can make your service department more profitable in 2018. Here are 8 steps to take. Try them all or choose a few to tackle. Each has the potential to improve your bottom line.

Streamline Workflow into the Shop

Technicians can only produce hours when they are working in the shop. For that reason, it’s important to make sure it’s as convenient as possible to get vehicles into and out of the service shop. Determine if there is a less time-consuming way to park vehicles on your lot or a better key drop process. In cold-climate areas, a valet might be used to clear snow from parked cars to save precious minutes in the shop. Adding even an hour of productivity per day will have exponential effects at the end of the year.

Audit Vendors

Your shop supplies, uniform vendors, lift technicians – even the guy who fixes your toilets – need to be held accountable. Create a list of vendors, then check their pricing and offerings against the competition. Loyalty to a vendor only goes so far when you’re expected to make your department more profitable. There are always ways to cut down costs, and demanding a lower price is often expected.

Monitor Write-Offs and Discounts

The nature of the business sees discounting and write-offs as regular occurrences. However, some staff might rely on your good graces a little too often. Ensure that every discount and write-off is accounted for by running regular reports, then having the responsible party explain the reason. You’ll be surprised how quickly discounts slow down.

Make Your Customers Happier

Happy customers open their wallets a little wider. It’s not about CSI scores as much as it is about the immediate in-dealership experience. Provide a better experience in the customer lounge. Offer complimentary loaner tablets while customers wait. Give your patrons an immediate WOW factor when they are in your store and they will spend more easily.

Boost Your Online Presence

Customer retention is a continuing issue for dealerships beyond the first year of ownership. One method of building an ongoing relationship with customers is through social media. Grow your social media following among customers and consistently put valuable material before their eyes. When they need their vehicle serviced or repaired, you want to be fresh in their mind. In truth, it’s best to hire a specialist to do this for you so you get the right results.

Apply for Warranty Rate Increase

Manufacturers have stringent rules in place for warranty rate increases. It can take days, weeks, or longer to complete the application for a rate increase, but it’s worthwhile. If you are eligible for a bump in your warranty rate, it’s ‘found money’. You don’t have to do anything else for it to pay off – it all goes to your bottom line.  

Invest in Staff Training

There’s always more to learn. Send your service staff members to training sessions whenever you can. Have your vendors come to your store to demonstrate their products and the benefits, helping your team to more accurately recommend and sell service. Reward staff for taking on certifications, whether it’s from the manufacturer, ASE, or otherwise. This training will help them perform their role better, increasing sales and customer satisfaction.

Be Present on the Front Lines

Managing from the office is a tendency most people fall into often, but the real value of your leadership is WITH your team. You’re not there as a hall monitor, making sure they follow the rules and do as they’re told, although that is a result also. The main purpose of being in the midst of your front-line staff is about creating a positive work environment. Staff seldom complain about a leader they work beside, contrary to a boss they work under. That positive image and that environment directly impact the work your team produces.

Start with one step this year or implement them all at once. The results will be noticeable this time next year.

Jason Unrau
Jason Unrau
Jason Unrau is an automotive specialist with more than 15 years of experience at the dealership level. Focusing mainly on fixed operations and the service industry, Jason’s expertise is in enhancing the customer experience and promoting a healthy, profitable service department.

Related Articles


Latest Articles

From our Publishing Partners