David Boyle is the President and CEO of TraXtion (formerly Tire Profiles). In this episode of Fixed Ops Roundtable, which originally aired as part of the Pay It Forward live event, David joins Ted Ings to share his best advice about the importance of dealership service bay utilization and its impact on dealership revenue.
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In this episode, Ted Ings and David Boyle discuss:
- If you asked any dealer if they'd be open to generating an extra $30,000 - $60,000 in gross revenue, we all know the answer would be "YES!"
- Dealership service departments are one of the best ways to generate more predictable revenue for a dealership and, when utilized efficiently, can produce more revenue for the store.
- That 10x20 square in the service bay is revenue producing real-estate that more dealers need to pay attention to.
- It's important to understand to also understand productivity and efficiency. When there is a problem with service bay utilization, you need to know where to look. Is it a sales issue or an efficiency issue.
- If one service bay has 32 billable hours, it would have an 82% utilization. If workflows and efficiency are sub-par, the efficiency of that bay and its ability to scale revenue diminish greatly.
- It's not just about the hours, it's actually about the money. We don't deposit hours in the bank, but hours do create money. Utilizing those hours across dealerships are not equal.
- There is one bay at the dealership that David refers to the "holy grail" of bays: The alignment bay.
- If you look at the effectiveness of the alignment bay in terms of hours and dollars and dollars produced, it is potential the highest producing bay in the dealership. It typically comes with technically efficiency, so when you're looking at how much that bay can produce, it can produce more in an 8 hour period than other bays.
- Average alignment bays can generate $150 per hour. Imagine if stores had more alignment bays and utilized them fully!
- The weakness of the alignment bay is that it often goes under-utilized at the dealership level.
- Dealerships need to focus on having a process to capture all of the opportunity.
- Challenge: Walk out to your service bay right now. If there is NOT a car on your rack, you have lots of opportunity. Start developing a process now to fill that rack and keep it filled.
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Thanks, David Boyle!
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