A few overlooked fixed ops numbers show where service revenue is slipping away. On today’s edition of CBT Live, Lee Harkins, President and CEO of M5 Management Services, explains why additional sales request (ASR) closing percentage and parts sales per flat-rate hour matter.
Video multipoint inspections (MPIs) surface plenty of work, yet many stores never measure how much of it they sell. Harkins notes that one store recommended over $500,000 in service in a month and closed under 20% of it. Busy advisors skip the sale during the summer rush, and pushy presentations send customers running. Slowing down and treating customers like family lifts closing ratios, according to Harkins.
According to Harkins, the parts-to-labor ratio is the second most misleading measurement in fixed ops. Post-COVID labor rate increases drove the ratio down, causing forecasts based on it to miss by 15% to 20% across about a dozen case studies. Instead, M5 tracks parts sales per flat-rate hour at cost, enabling more accurate comparisons between stores.
Follow up on declined work, since 20% to 25% of it returns later, according to a figure Harkins cited. Discount coupons can condition customers to decline service and wait. Instead, Harkins recommends calling to express concern about the declined repair. AI can place those calls, but a live person may be the best option, he said.
