Fixing a Door Dealer’s Biggest Problem
© 2005 Door & Access Systems
Publish Date: Summer 2005
Author: Tom Wadsworth
Page 72
Fixing a Door Dealer’s Biggest Problem
An Interview With Bruce McConnell
Editor’s Note:
Bruce McConnell has personally visited and counseled hundreds of door dealers nationwide on issues related to business analysis and planning. We stopped him in the midst of a busy week and picked his brain for some free advice for dealers.
Bruce, when you work with garage door dealers, what specific topic is most often their primary financial concern?
Wasted labor costs. Basically, a door dealer doesn’t make money unless the guys in the field are kept busy. They must spend a good portion of their time producing billable hours. You must maximize these hours every day.
Is there a rule of thumb for what constitutes “a good portion” of their time?
Actually, yes. A target range for door installations is 75 to 80 percent. Thus, if a technician works eight hours in one day, at least six of those hours should be billable hours spent on a job. Since you can bill more than one service call in an hour, you might even generate 10 hours of billable work in an 8-hour day.
Should dealers be able to measure an installer’s or service guy’s billable and non-billable time?
Absolutely. Since most of your income comes from the guys in the trucks, it makes sense to be able to measure that. Many dealers don’t, and they are typically paying for that mistake. If you can track billable hours, you can figure out how to make them more efficient.
To track billable hours, compare your actual hours worked on jobs to the total paid hours. It’s not really that hard.
What are some tried-and-true tactics for improving efficiency in the field?
Here are three: better training, better scheduling, and better pricing.
First, training is critical. Dealers need competent techs who can do the job faster, without compromising quality. If you train the new guys with an experienced, top-performing, efficient worker, the new guys will learn how to increase efficiency.
But today, it seems to be harder to motivate efficient work. Some dealers are held hostage by inferior employees who don’t want to work that fast or that hard. I hear this complaint from dealers every week, everywhere.
Some dealers offer incentives to motivate technicians to produce more billable hours.
Yes, incentives can help. But what motivates one employee may not motivate others. For some, you can feed them pizza and beer on Fridays, and that works great. Others are motivated by being able to start working earlier or later.
Some might respond to getting a commission for extra service work or making parts sales on the job. Although more hours may not be billed, more revenue is generated, and that’s the whole point. But as your magazine has reported, some greedy technicians and dealers abuse this by ripping off customers. Commissions can work fine with honest employees who keep the customer’s interests in mind.
Explain the “better scheduling” tactic.
Take the time to schedule each technician’s day for maximum billable hours. Minimize loading time at the beginning of the day to get them on the road. Schedule a truck’s jobs in the same area to minimize travel time. Schedule the time spent on each job so that it is aggressive, but realistic.
A lot of dealers set the schedule in the morning, and that’s it. But many dealers have their techs call in when each job is near or at completion. This lets you track the time each tech takes on a job. And since they know that you expect their calls, this can encourage a good work pace. Plus, when they call, you can send them to fresh calls on the way back to the shop.
Again, the challenge is to fill that guy’s day with billable hours.
And “better pricing”?
If everything else isn’t helping your bottom line, then you need to look at your fee structure. Are you charging enough for travel, or for the trip charge? Are your labor rates appropriate? Your prices need to cover the additional cost of non-billable hours so you can maximize profits.
To respond to this story, send an E-mail to daseditor@dasma.com. Bruce McConnell is available at 815-288-3556 or at bhmc@grics.net.