Do you have some guidelines or indicators that could apply to determine staffing levels for the different departments? It would help to know things like how many techs should be handled per service writer or how many salespeople per sales manager.
The members of the Best Operators Club recently held a meeting in Dallas and decided to answer their own question as a part of their discussion. Members present included representatives from Alcoa Good Times Kawasaki/Yamaha (Louisville, Tennessee); Beaverton Honda/Yamaha/Suzuki (Beaverton, Oregon); Dothan Powersports (Dothan, Alabama); Destination Powersports (Marionville, Missouri); The Engelhart Center (Madison, Wisconsin); Motoprimo Motorsports (Lakeville, Minnesota); Neosho Powersports (Neosho, Missouri); Rexburg Motor Sports (Rexburg, Idaho), S&S Powersports (Clarksville, Tennessee), Sloan’s Motorcycle & ATV Supercenter (Murfreesboro, Tennessee) and Thompson’s Honda & Motorsports (Terra Haute, Indiana).
How many customer opportunities can a salesperson handle per day?
In general, we want to see about six to eight good entries on the showroom log per salesperson per day. It is difficult to expect them to follow the customer satisfaction selling process effectively if they are showing more than that on the log. Out of those six to eight entries, they will actually go through most of the process with maybe 50% of them. We would anticipate a 6% to 10% closing ratio for good entries.
BOC moderator Gart Sutton
pumps his troops up!
In the group’s estimation, what is a good entry on the showroom log?
A good entry would be a prospect that is interested in making a major unit purchase. This means the salesperson established rapport and reached the step of probing for their wants and needs. The entry should include the customer’s information (name, phone, etc.), the model of interest and the source what brought them to our store today. We require specifics about the source, such as what newspaper or what radio station spot brought them in. We use this as a tool to track the response to our ads and promotions.
What about the ratio of salespeople to sales managers? How many salespeople can a sales manager handle and still be effective?
Well, there are a number of factors to consider. The number of days you are open during the week and the number of hours you are open per day will have some impact on this for starters.
Taking this into consideration, a good sales manager should still be able to handle about six salespeople. In addition, if they are doing their job correctly and involving themselves in the deals, they should be providing an enhancement of about $200 to $300 per deal.
What about F&I staffing? What are the guidelines you recommend?
If the F&I producer is doing it the right way presenting 100% of the products to 100% of the customers, 100% of the time they can only handle six to eight complete presentations or deliveries in an average day. You should consider adding an assistant who helps during peak periods and has other duties the rest of the time. This person would handle administrative duties and pre-load the deals for the F&I producer. This helps the department be more productive during the peak periods.
Okay, let’s move over to the parts and accessories department. What would be the key indicator for the parts and accessories sales staff?
We look at the revenue produced by P&A. The old method of measuring the sales per person, per day is still pretty valid, but it is more accurate to look at the monthly picture. If you are open six days a week, you should average $35,000 to $40,000 in sales per person, per month. In the accessories department, this could be influenced by the product lines you sell. For example, cruiser lines show more dollars per unit in accessories sales. If you are focused on this market, your dollars-per-person should be greater.
If you are open
six days a week,
you should average
$35,000 to $40,000
in sales per person,
How about the service department? We are frequently asked to help dealers determine their ratio of techs to service writers or service managers. What do you recommend?
Generally, you need more than three techs to justify a service writer or service advisor position. At this level, the service manager should be able to handle most of the write-ups. A good basic model would be one service writer for every four techs.
We all agree that the industry standard for average hours per RO (repair order) is still around two hours. The tech productivity should be at 85%. This is the responsibility of the service manager, and they need to be held accountable for maintaining this level of performance. If these numbers are being maintained, an effective service manager can handle three to four techs. As you start to approach seven or eight techs, you will need to consider adding a position like a shop foreman.
Again, it is important to take into consideration the number of days you are open during the week, and the number of hours you are open per day. These have a significant impact on what will work in your store. That said, these guidelines and indicators should help you in making some of your staffing decisions.