Chris Collins explains what to ask a service manager when considering a dealership job. Check when the pay plan last changed, confirm the technician-to-advisor ratio is at least 3:1 or 4:1, and request last month's performance report to see hours and RO mixes. High warranty percentages and rapid advisor turnover are red flags.
Dealer red flags.
Okay, so explain the context of that.
So a lot of people ask us and it comes up a lot in the.
Interwebs, like on Facebook, LinkedIn comments.
We get emails directly. I'll. I'd say I get one to two a week. I don't know how many you get, but people reach out to you on Instagram too. So interweb social media.
It's a comment asking, like, how do I know if a dealer is good or not? Like I'm talking to this dealer. How do I know? I'm scared to jump. Right. That sort of thing.
Yep.
And so we have made a little list. You made a list? I made a list of red flags for dealers. I'm not going to go in the order that I have here because I think.
Are you going to try and hit your big point last?
I don't know which one you would categorize as the big point.
Okay. Okay.
So a couple of things and they kind of go together is.
In an.
Interview I would ask when was the last time they changed the pay plan. So if I'm interviewing and I'm assuming to be an advisor, but even if I'm a tech, I want to know when they change the bonuses, when did they change the paper? Now, what does it tell you if they change the pay plan a lot?
That they don't really know what they're doing.
Yeah, they're chasing it. They're managing the department through the pay plan, not through systems. And it's not scalable.
Let's say that's a very reactive.
Yeah, yeah. Technician to advisor ratio. So a lot of times we see dealerships that have two technicians. To every advisor it should be three to one or four to one. But if you have two to one, the advisor probably doesn't have a chance to really make money and the technicians are probably going to be over overwhelmed.
Yep. So one thing that I would do in that aspect, one, asking how many techs, how many advisors is really, really good. Asking how many they're looking for. But what I would ask a service manager do if I was sitting in front of him, I would ask for an advisor performance report from the previous month. You can learn so much just by looking at that data.
Yeah.
Because it'll tell you whether the average hours per ro. It'll tell you what the mixes of customer pay work versus warranty work versus internal work. You learn a lot just by asking that question. Yeah.
So let's touch, touch on that really quick because you bring up something that I kind of hadn't thought about.
It depends on the brand. Right. But let's say you go, let's just say General Motors and you're looking at the advisor performance report and 50% of their work is warranty. What does that tell you?
That they're not converting it to customer pay. They're just one line.
And that they don't have enough tax.
Yeah.
Because most of the time, if your warranty starts to creep up, it means you don't have capacity. Customers have to come to you for the warranty. If you're booked out four weeks, you're going to lose the customer pay to Independence because they can go to an independent for customer pay. It's the warranty they have to come to the dealership for. So that warranty to customer pay ratio is an indicator of not having capacity in the shop.
That's a really good point. I like that.
The next one is how many ROs do the advisors write? So I would just say, hey, how many? How many on average? How many hours are we writing a day? A hundred. And then you do the math. Do the math. 10 advisors, 105 advisors. In 100, they're writing 20.
Right.
That's not good.
So oftentimes there's commonalities between how many ROs the advisors write and turnover. And that's. The next one I have is what's the turnover? Yep.
So the tenure of the employees.
Yeah. So if they're churning through advisors, there's no reason to think that you're going to be the one that sticks.
You also learn a lot if there's five advisors and everyone's been there for two months except one person that'll tell you a story or two.
Thanks so much for watching this clip of Service Driving Revolution. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333 asksDr and we'll answer your question on the show. We that's 8333 ask SDR. For special deals on our books and training, head over to offers Chris Collins Inc.com now that's offers.chriscollinsinc.com I'm Chris Collins and I'll see you in the next video.
