As a General Manager, Service Manager, or Service Advisor in the automotive industry, you understand the importance of maximizing revenue and improving efficiency.
One key metric that seems to run the world when it comes to the financial health of your business is the Average Repair Order (RO) value. The Average RO is the average amount of money earned by a dealership for each service visit or repair job performed on a vehicle. It is calculated by dividing the total revenue generated from service visits or repairs by the total number of ROs during a specific period.
In this article, we will explore five effective strategies to enhance your price per RO and drive profitability. Whether you’re running an auto shop or a car dealership, these tips will help you optimize your operations and elevate customer satisfaction.
- Streamline the Diagnostic Process:
Efficient and accurate diagnostics lay the foundation for a successful repair order. Don’t let outdated technology slow you down.
Invest in the latest diagnostic tools and software to expedite the diagnosis process. Ensure that your technicians are adequately trained to use these tools effectively.
By reducing the time spent on diagnostics, you can increase the number of repair orders completed, ultimately boosting your revenue. - Utilize a Menu in the Service Lane:
Implementing a service menu in your service lane can have a significant impact on your price per RO.
A service menu provides transparent pricing and offerings to customers, education on why they should be maintaining their vehicles, and empowering them to make informed decisions.
A well-designed menu can also be a revenue-retention strategy when paired with a free vehicle protection program such as the Titanium Warranty from Wynn’s. This approach fosters trust with customers and encourages them to opt for more comprehensive services, ultimately increasing your revenue. - Enhance Customer Communication:
Effective communication is vital for customer satisfaction and increasing the average RO value.
Training your service advisors to listen actively and ask open-ended questions to understand customers’ concerns. Use a customer relationship management (CRM) like Thryv or Salesforce (Best Auto Dealership CRMs) to track customer history, preferences, and past services. It shows them you’re informed about their vehicle + purchase history which invokes trust.
Lastly, be sure to follow up with customers regularly (via phone, SMS, or email) to remind them of upcoming maintenance or service intervals. Strengthening customer relationships leads to trust, loyalty, and higher RO values. - Implement a Maintenance Reminder System:
A maintenance reminder system is a powerful tool to boost your RO values.
Set up a system that automatically sends reminders to customers when their vehicle is due for regular maintenance or specific services.
This proactive approach ensures that customers are aware of their vehicle’s needs and are more likely to schedule an appointment with your shop. By capturing more frequent service opportunities, you can increase your average RO value. - Offer Value-Added Services:
Expand your service offering beyond routine repairs and maintenance.
Consider providing value-added services that complement your core offerings. Examples include tire rotations, wheel alignments, fluid solutions like Wynn’s, or comprehensive vehicle inspections.
These additional services not only generate additional revenue but also increase the overall value of each repair order. Educate your service advisors to effectively communicate the benefits of these services to customers, enabling them to make informed decisions.
Improving your Average Repair Order is crucial for the financial success of your auto shop or car dealership. By implementing these five strategies, we’ve seen shop after shop enhance their price per RO, drive profitability, and deliver exceptional customer service. I
f you’re able to streamline your diagnostic process, utilize a service menu, enhance customer communication, implement a maintenance reminder system, and offer value-added services. Remember, continual improvement and a customer-centric approach will pave your path to success.
