Smart Service Advisor Hires Are Absolutely Critical To A Dealership’s Profitability

Follow other dealers’ proven steps to recruiting and interviewing promising advisors, and don’t insist they’ve done this job before. BY DON REED

This time of year is perfect to reflect on your fixed operations team’s year-to-date performance. As a dealer, GM or fixed ops director, you might want to start with the operating profit line on the financial statement and measure your team’s performance against the following industry benchmarks:

  • Service department operating profit: 20 percent of gross profit
  • Parts department operating profit: 30 percent of gross profit

If you are exceeding those benchmarks, then congratulate your team for a job well done! If, however, your department is falling below those benchmarks, then you obviously have some work to do. Let’s begin by exploring these fundamental questions: Are your expenses too high, or are your gross profits too low?

After working with hundreds of dealers, I have learned that in most cases, the fixed ops team is doing a good job of controlling expenses but is missing out on huge opportunities to increase gross profit. Wouldn’t you agree that a dealership almost never can save its way into higher profitability? If so, then what is the single-biggest factor in why so many dealers miss out on so much profitability in fixed ops?

I think the answer is people, hiring and managing people. Or, more specifically:

  • Having the right employees in the right positions
  • Having the right number of people to exceed your customers’ expectations
  • Properly training those people to become top performers
  • Implementing compensation plans that reward individual performance
  • Holding people accountable for their performance

Goal Is To Create Top Performers

Think about the individual performances of your technicians, service advisors, service managers, parts managers and warranty administrators. Ask yourself, “If I knew then what I know now, would I have hired this person?” Remember, there are only two reasons why any employee is not a top performer: They don’t know how to become one or they don’t want to.

The first scenario can be addressed with individualized training of each employee on how to perform at a higher level. The latter can be cured with an aggressive recruiting campaign designed to attract those people who want to do what you hire them to do. If you answered the above question honestly, my guess is that many of you will be in the recruiting mode for new hires. So, I want to give you some ideas for recruiting the right people.

How To Recruit Advisors

A key position for improving gross profits is service advisor. This person speaks with more customers on the phone than any other employee in your dealership, other than the receptionist. Your service advisors also speak with more customers face to face than does anyone else in your dealership.

Given those realities, whom do you think has the most impact, good and bad, on a dealership’s customer retention? Whom do you think has the potential to produce $500,000-plus of gross profit per year? The answer on both counts is the service advisor. This is a very important position and requires a definitive plan for recruiting qualified candidates who can achieve top performer status.

Here are some simple rules to follow in recruiting service advisors:

  • Do not hire an experienced advisor who has not exceeded 1.5 HPRO. You don’t need to hire someone else’s underachiever.
  • Consider recruit aftermarket advisors and managers. They all have some degree of applicable training and understand accountability for performance.
  • Aggressively recruit women. After all, at least half of your customers are women.
  • Advertise “No experience necessary.” Why? You won’t have to break applicants’ bad habits.
  • Do not advertise the job as “service advisor.” Instead, pick a title that will appeal to a larger number of applicants, e.g. customer service representative, customer service associate, service secretary, administrative assistant – customer service.

Your ultimate goal is to interview as many applicants as possible. I actually got the idea of advertising for a “service secretary” from one of our dealers who ran that title in a job ad and had more than 50 applicants show up – mostly women. We interviewed and profiled the applicants, then hired a young lady, gave her five days of training, compensated her on a performance-based pay plan and watched her finish her first month at 1.8 HPRO and second month at 2.1 HPRO.

She brought no technical skills but also no bad habits to overcome. Her customers love doing business with her, she loves her new job, and as you can imagine the dealer is thrilled. Sounds like a pay raise!

Smart Service AdvisorTips For Advisor Interviews

Once you are interviewing service advisor candidates, for what personality traits should you look? We have worked with about 1,000 dealerships in-house and in workshops, and the following qualities and questions (even if they don’t seem dealership-specific) are common to the successful hires:

  • Was the person dressed appropriately for the interview?
  • Did he or she give you a firm and friendly handshake?
  • Was he or she smiling throughout the interview?
  • Did the applicant make and keep eye contact with you throughout the interview?
  • Ask what he or she liked most and least in the last job.
  • Ask, “Why should I hire you over any of the other applicants?”
  • Utilize a personality profile to determine if the applicant is decisive, outgoing, self-motivated and able to handle stress.
  • Review the job description and ask if the applicant is comfortable with those responsibilities. As you do so, watch for negative body language.

Keep A Steady Customer/Advisor Ratio

Now, let’s say you have willing candidates you are ready to hire. How many customer service representatives, aka service advisors, does a dealership need?

We use a guidepost of 12 ROs per day per representative – customer pay and warranty, not including internal. If your advisors are working with more than 12 customers per day, and your dealership needs to increase gross profit, then you need to start planning for hiring another representative – NOW!

If you are successful in growing your customer traffic count but keep the same number of advisors, then your sales per RO will decline starting immediately, resulting in a decreasing gross profit even with more customers. Each advisor should be able to devote at least 15 minutes to each customer at the time of write-up and another 15 minutes at the time of delivery. So, hire that additional advisor as soon as your traffic begins to increase.

This scenario is commonplace when OEM recalls are announced, and a dealership’s phones light up with an ever-increasing volume of requests for service appointments. If your advisors are currently working with about 12 customers a day, and suddenly the recall traffic starts building, then we find in most cases the retail customer becomes seen as a lesser priority than the warranty customers. But, a successful dealer must be able to accommodate all service customers in a timely manner.

Recall customers do, however, present a great opportunity to recapture “lost souls” who have not been in your dealership in more than a year. Your service advisors are the key to making that happen. So, prepare your recruiting plan, avoid hiring someone else’s underachiever, recruit non-automotive people who bring no bad habits, and invest in their training. Your net profit could soar to record levels.

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After 26 years in the automobile business as a dealer, GM, sales manager, service manager, service advisor and salesperson, Don began a new career as a consultant and trainer. As CEO of DealerPro Training and founder of The Don Reed PRO Training Network, he has worked with hundreds of dealerships and major dealer groups across the U.S., Canada and the U.K. to increase profits in their fixed operations. He was rated a Top 10 Speaker at the NADA convention for four consecutive years. Visit the firm’s website at