Some dealerships measure performance in the service department in ways other than fixed absorption.
Steve Quezada, service manager at West Point Buick-GMC in Houston, for example, forecasts monthly revenue and sets a goal of retaining 35 percent of gross profit from fixed operations. And, he says, "We have always hit our forecast or better."
The monthly targets are based on the number of working days and the average gross per hour booked by techs. He posts the targets and progress updates in the shop as incentives. If the targets are met, techs get a bonus of 75 cents to $1.25 for each hour they booked that month. Service advisers get spiffs based on labor hours and parts sold.
"This encourages them to work as a team to hit our goal," Quezada says. "It's hard for me to pinpoint one or two things that I do because it's a team effort, and you have to have everyone on board."
A key enabler, Quezada adds, is high customer retention, which runs about 75 percent at West Point Buick-GMC on vehicles 1 to 6 years old.