What’s A Technician Worth?

This is directed to all dealers and general managers that spend most of their time “up front” and hardly ever go to the “back” – or service department. Before I start this conversation, I want to clarify that I know nothing about selling cars. In fact, if you have ever read one of my articles you know that I have never sold a car in my life. I am amazed at all the paperwork, all the steps of the sale, and I don’t have a clue how to work a 4 square or do a T-O, or any of the other things you guys do.

I do, however, have some pretty strong dealer friends and clients that give me some basic information I can use when I need it – and I needed it for this article. So if I have been given false information, it's their fault, not mine, OK? They tell me that the average salesperson sells about 10 cars per month. They also tell me that the average gross profit on a vehicle sale is about $1,300, not counting F&I income. So, even though I don’t know how to sell cars, I do know how to do math to find out that the average vehicle salesperson generates about $13,000 in gross profit, with the help of sales managers, the dealer, a business development center and several lot lizards. Let me say it again, $13,000 per month, per vehicle salesperson. I am not sure what your number is, but do the math and get a number.

Now, let’s take a look at your service department. You remember where it is; it's back there where the mechanics…er, technicians, work. You were there once, remember? It was dirty. While you're thinking or trying to remember where it is, think about this – the average technician turns about 50 flat rate hours per week, or 200 a month.

Let’s also assume that your effective (average) labor rate is at least $68 per hour and that you hold at least 70 percent gross profit on labor – which you should at least be doing, by the way. Let’s also assume that you average out about 70 cents on the dollar for parts and hold about 40 percent gross – not pie in the sky numbers here guys. Do the math at your store, but with this scenario: using these “not so hot numbers,” each technician generates about $13,328 in gross profit each month. Isn’t that special? About the same as your average vehicle salesperson, isn't it? Bet you never thought of it that way.

Think about this – when was the last time you had a motivational service meeting instead of a gripe session? And why do you just buy pizzas for your technicians, but take the sales team to Ruth's Chris Steakhouse? Give top-producing techs an award or a gift certificate to recognize them like you do for your vehicle salespeople each month. You could also sponsor a bowling team for your techs.

So my point is this – take a walk to the back. Build a relationship with your technicians. Take them to lunch or dinner sometime when they do a good job. Know and recognize their birthday or make a big deal out of the number of years they have worked for you. They are, in fact, just as valuable to your dealership as your "up front" salespeople, and a lot more stable! Stop back there and say “hi” and shake their dirty hands once in a while. You can wash the grease off later with $13,000 worth of hand cleaner.