Many shop owners believe that their Effective Labor Rate (ELR) is the ultimate way to measure shop performance. If you want to boost your ELR, you have two choices:
Since your employees are the lifeblood of your company, team efficiency is the way to go. The more efficient your business is, the better your month-over-month performance will be, positively impacting not only your bottom line but also your peace of mind.
Here are 6 strategies that you can use to boost team efficiency and enhance your ELR.
Communication is key to providing good service. It is up to your service advisor to make the best first impression on your guests. When a guest walks through your shop’s doors, your service writer should immediately greet them and learn what’s wrong with their vehicle. But if that service writer has to then leave the desk to carry a message to the technicians, there may not be a service writer available to offer a friendly greeting to the next guest that walks into your shop.
The moral of the story is that while some communication tasks require the human touch of good old-fashioned face-to-face conversation, others can be automated with technology. The less time a service writer has to spend jumping through hoops, the more time they can spend providing a quality service experience to your guests. Your team also needs to be able to take care of simple tasks quickly. If a part arrives, and the person you have in charge of receiving that part is busy, you might have a tech waiting for the part to get to work.
The funnels in your shop should help you complete repairs, not clog up your process.
Oftentimes, the people who have the best ideas for improving your shop are the people who work there day-to-day: your team. The people who are directly greeting guests or working on their vehicles sometimes see things that management doesn’t see. They know where small inefficiencies are and how those small inefficiencies can snowball into large service delays.
When you set up a foundation for your team to confidently let management know where the hold-ups are, they can begin to work together and open up a whole new way of doing business. Conversely, if your management and individual team members are broken into siloes, problems remain unsolved, causing labor operations to drag and potentially bringing down team morale.
Often when we’re looking at our balance sheet and our shop’s Effective Labor Rate, we lose sight of the fact that our team members are not just numbers but are also people who have their own dreams: their goals, their wishes, things they want to do, and places they want to go. When was the last time you asked them about them?
When employees know that you care about what they want for their future, they tend to do a better job. They feel more motivated. They take pride in their work and bring a positive attitude into the shop. They pay more attention to detail. And they are more likely to support other team members because they have a greater sense of solidarity with one another. They are also more loyal, reducing overall turnover and angst among your ranks.
Let’s face it: spending money on car repairs isn’t fun. People would rather spend their money on something they’ll enjoy, so when they are spending money on auto repair, they want to be certain that their auto repair costs are worth it, especially since they will not have their vehicle for at least a few hours. If they don’t understand their estimate, their repair order, or the progress of their repair, and don’t feel confident in the information provided to them, your guests may become frustrated or even decide to take their vehicle somewhere else.
On the other hand, good communication by service writers can make guests feel more comfortable with your overall guest experience, making it more likely that they will stick with your shop and refer their family and friends. After all, word of mouth is one of the most powerful ways to get new customers.
In other words, good communication with your guests can exponentially improve your revenue.
Chances are that your technicians have a passion for working on cars. But working on the same dozen models day in and day out can become monotonous and make work less exciting. Similarly, your service writers might really enjoy talking to people but feel worn down after a long day of talking to customers and building repair orders.
One way to reignite your team’s spark is by giving them something to be excited about—friendly competition. According to TalentLMS’ 2019 Gamification and Work study, employees say gamification makes them feel more productive (89%) and happier (88%) at work.
Imagine your mechanics ending each week by comparing who received the most customer compliments or which service writer upsold the most tire rotations. And what if you rewarded weekly or monthly winners with gift certificates or a party for your entire team when everyone does a great job as a company?
Gamifying gives you the chance to have fun while you work and reward your whole team for going above and beyond. And when auto repair teams feel rewarded, they are more loyal and more likely to provide quality service with a smile. And what shop owner doesn’t want a team like that?
Processes are a huge help to bringing order to day-to-day operations, but processes with too many checkpoints or too narrow a funnel can slow the business down. For example, if service writers are required to get your approval to lower an estimate or make other changes that may close the deal, they can’t move orders as quickly as they want, leading to frustration and lowering their overall performance.
Meanwhile, you may find yourself spending more time directly managing employees instead of doing what shop owners should be doing: innovating and making enhancements to their auto repair business.