It’s mid summer and depending on the region of the country you are in it’s too hot to ride or busier than ever because the temperature is just right for a Sunday rip. Either way, it’s always good to take a moment and reflect on ways to drum up more business in your department.
We spent last week moving our offices from one end of town to the other so that gave me tons of time to listen to the local radio stations. I do not do this very often so it was interesting to hear advertisements from the local car dealers. The local Mercedes dealer was offering free car washes for life if you bought a new car. My guess is they have a couple of guys they pay minimum wage to wash cars after they service them to make sure they offer a premium experience. These same guys will wash your car if you bought it there even if you do not have a service performed. It probably takes 30 minutes to give a car a quick visual wash, which equates to $8 – $12.
I often wondered why motorcycle dealers don’t offer this. If you think about it motorcycle dealers are a perfect fit for something like this. Maybe it takes 30 – 45 minutes to wash a bike and you are paying someone around $11 per hour. By the time you pay benefits and the payroll tax you should be right about $10 to $11 to wash a bike. While you are spending $11 to wash a bike and build rapport with the customer there are a couple of things that could be done in the background to offset the cost. Try these five tips:
1. Run the VIN for safety recalls.
2. Teach the lot tech how to look for worn brake pads, leaky fork seals, worn tires, etc. This is a great way to find something that needs fixing.
3. Teach the lot tech how to record mileage in your contact management system. This could be used to schedule or suggest future service.
4. Have your lot tech or service advisor alert the parts department sales reps that there is someone in for a bike wash and identify the individual. This person has a 30-40 minute wait, so your parts department should focus a little attention on them.
5. Copy number four and alert your unit sales team as well.
In the grand scope of things, if you wash a couple of bikes a week, it would not take that much to pay your overhead. Let’s look at the math; $11 per hour lot tech at 40 hours per week is $440 per week. We know that the lot tech will not spend a full 40 hours washing bikes and he can be used for other operations around the dealership. Maybe if things get really cooking he spends 40 percent of his time washing bikes. So if we leave benefits and payroll tax out of the equation, you would need the lot tech and parts department to clear $200 per week in gross profit upsells to pay for this. If the customers spend $200 in parts at 40 percent margin, that gives you $60.
This leaves $140 in gross profit needed from labor. Now if that lot tech spent 40 percent of his time washing bikes based on a full week and washing one bike every 30 – 45 minutes, he should be able to wash 20 – 24 bikes per week. That seems really easy to me. If the lot tech washes 20 bikes per week and has a 5 percent closure rate on finding something that needs repair or service that is two extra bikes per week in for service. You should be able to clear at least one hour per bike on any service or repair. If your labor rate is $85 per hour that puts an extra $170 a week in labor sales.
Now I am not sure if this will work for all departments in all market areas, but why not try it? Summer is a great time to hire a young kid with some mechanical skills who is home from college. You might even choose to get creative and put the bike washer on commission if he finds service or repair work that needs to be performed pay him part of the sale.
However the numbers work or don’t work for your dealership, the main thing I am getting at is try to find a way to get the customer to come back in the door. The more you get the customer in the door with their unit the better chance you have at selling them something. That something might be an hour of labor, parts or maybe even a new unit.
C.R. Gittere and the Service Manager Pro team specialize in service department efficiency, elevating customer service and increasing department profitability. His monthly column focuses on best practices and unique ways to get the most out of your service department. More information about Service Manager Pro can be found at www.servicemanagerpro.com.