Do You Actually Want Your Service Department to MAKE Money?

By Rich Lindblom

If you answered yes to the headline, let me start out by saying that I agree with you wholeheartedly. Your service department absolutely should be a profit center, not a cost of doing business. 

Unfortunately, there are lots of dealers whose service departments aren’t profitable. Now, I could literally talk all day about the various ways to boost your service operation’s bottom line, but that would turn into a War and Peace-sized novel, and I only have a few hundred words to get my point across here. 

So instead of writing a book, I’m going to talk about what I believe is the single most important thing that can make your service department more profitable: First call completes!

More than once this year, ServiceSource and YourSourceNews have published articles about the cost of doing business and, more importantly, the cost of running a service call.  I think the experts are in general agreement that on average it costs you somewhere between $100 and $110 to run a call, which sadly is often less than you are getting paid for it.

With that number in the back of your head, here’s why first call completes are absolutely critical: That dollar figure is not per completed call, it’s per call.  Meaning every time you send a tech out to a customer’s home, it costs you upwards of $110!

The math is pretty simple here folks. If your tech makes two trips to a customer’s home to complete a repair, your cost is actually $200 to $220 for that service call. And since I’m pretty sure that none of you are charging over $200 for a visit, that would mean that every time one of your technicians needs to make two (or more) trips to a customer’s home, YOU ARE LOSING MONEY.

I think every servicer should be shooting for a first call complete rate of somewhere between 60 percent to 80 percent. I know that in my company, our first call completed rate was right around 70 percent, which is a number that I felt pretty good about. I would tell you that if you are currently below 50 percent for first-call completes, you’ve got a serious problem that needs to be addressed immediately. 

So how can you fix it if you’re below breakeven?  The answer is pretty simple: Training.

When I talk about training, I’m addressing several fronts. I’m sure the first thing that came to your mind was service technician training, and of course that is part of the equation. You need to take advantage of every single opportunity presented to you and your technicians for product training. 

Again, trying to keep the math simple, would you rather pay your tech once for four to eight hours of service training or pay an extra $100 to $110 to repair a product over and over again?  I know what my answer was every single time.

But there is a different kind of training that is just as, if not more important, and that is training your service call takers. The people taking your service calls need to be trained to pre-screen every single service call and get to the bottom of the problem with your customer’s machine, in the hope of sending the technician out to their home with the correct part on the first trip.

Your call takers need to be trained to ask the right questions and to probe for answers that give them clues as to what is truly wrong with the customer’s appliance. Once they have that information, a good service tech can quite often tell without even seeing the machine what the most likely cause of failure is 80 percent of the time.

Let me give you a quick example. The customer says their gas dryer isn’t heating. Your call taker needs to dig deeper: Is it not heating enough? Is it not heating at all? Is the gas turned on? Is the vent free of obstructions? Does the burner come on once or twice and then stop heating? Do you see the ignitor glowing?

You get the idea. Don’t stop at the short answer, dig deeper for the important clues.

The bottom line is that if you want to start making money (or more money, as the case may be), the first thing you need to do is increase your first call completed rate today!

I have three goals in mind with my columns: To motivate, educate and entertain.  If I have achieved at least one of those, then I’ve done my job. Don’t be shy about letting me know if you agree. Write me at egvrich@gmail.com.