Bob Schwartz of Performance Inc. discusses maximizing effective labor rates
November 9, 2011
Filed under MDCE News, News
ORLANDO – At the 2011 Marine Dealer Conference & Expo, Bob Schwartz of Performance Inc., an ADP Company, explained how to maximize your effective labor rates, reducing the variances that are hurting service departments.
According to Schwartz, many service departments are struggling to come within $20 to $30 of their posted door rates. In fact, no more than 50 percent of work is collected at that posted door rate, Schwartz said.
Maximizing these rates can often begin with a dealer’s management system, which Schwartz said has the ability to break down labor into categories, like retail, internal, rigging and warranty.
Most important, according to Schwartz, is to refrain from quoting a labor job to a customer before having the knowledge to adequately quote the cost of the work. If the type of service work is new to your dealership, it is crucial to get everyone involved who should be involved, including anyone from another manager to a fiberglass technician, Schwartz said.
Schwartz said refraining from early quoting can be made easier by developing a word track for both over the phone and in person with phrases like “I cannot give you a price for that until we have our technician look at the job and find out what is involved.”
Schwartz laid out a number of methods to maximize your effective rates that include how to best manage the time allotted for a job, maintenance package pricing options and how to use discounts to increase your profitability, rather than hurt it.
