Retail Observer

RETAILOBSERVER.COM AUGUST 2023 56 S erviceSource, the exclusive AVB BrandSource initiative that helps servicing members run their repair operations more efficiently and profitably, made the rounds at the group's regular series of regional meetings this past season. And, just like last year, economic conditions drove our message to the members: Mind your service rates, recruitment strategies, and percentage of warranty work. • Service Rates. It's crucial to regularly monitor your cost of doing business (CODB) for the service department and adjust your service rates accordingly. Service labor rates should not be arbitrary, but based on your current cost of doing business. Check CNBC's survey of America's Top States for Business last year to see where your state falls in the rankings. Dealers should use ServiceSource's CODB calculator, available to members in the BrandSource Backroom, to determine their hourly labor rate based on the formula Technician wage + Overhead + Profit ÷ Department efficiency. If your service, trip, or diagnostic call rate is still under $100, you are undercharging and leaving money on the table. The national average is $119.95 according to the Original Blue Book Major Appliance Job Rate Guide. Call me if you struggle with this and I will help you with the calculation. • Technicians. Undoubtedly, with 3.4% unemployment and 11 million jobs open, you're still struggling to find service technicians and staff in general. An Indeed ad alone won't cut it in today's market. If you missed our monthly ServiceSource Thursdays Coffee Break session with CareerPlug on where to find qualified technicians, you can watch it on the ServiceSource channel on YouTube. Point is, it's time to get creative with your recruitment strategies. Posting job openings on your media feeds and on industry job boards like the one at Fred's Academy, and adding a link to your Indeed ad in your email signature, are three successful outside-the-box tactics. • Warranty Service. During the pandemic, many dealers resorted to providing only warranty service and sending COD (cash call) requests to local independents. Providing warranty service only is a guaranteed recipe for losing money on service, and it's time to reverse that thinking. A service dealer's warranty goal should be a healthy ratio of 70% COD to 30% warranty billings. Service dealers can't stop providing warranty service, but they should sustain it and grow their out-of-warranty offering. To do so requires a little effort in marketing your service business. While on the subject, if you have any OEM warranty rates under $100 per call, now is the time to correct that. Negotiating warranty rates with manufacturers is not merely a simple request for more money; it's a negotiation you must prepare for. Do your homework before contacting an OEM's regional service manager, and you'll have more success securing rates over the $100 mark. It's a team effort, so include your sales department in the negotiations with all manufacturers. Sales and service go hand in hand – you can't have one without the other. OF RATES, RECRUITMENT, AND WARRANTY WORK Each was top of mind at BrandSource's region meetings Paul Mac.Donald Appliance Service Trends RO Paul MacDonald is senior lead of ServiceSource, the exclusive AVB BrandSource initiative that helps servicing members run their repair operations more efficiently and profitably. Paul previously headed his own 38-tech service business. He has served as president of the UASA and currently operates The Expert Service Program. You can reach Paul at (647) 500-7785 or at Paul.m.Macdonald@brandsource.com

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