Make More Money with Service: Case #3 for the BBI Methodology
A healthy, profitable service department can drive traffic—and, yes, even revenue—to retail
Words by Graham Thompson
“So, is this how you did it in the real world?”
That’s the question often asked by students that this series of articles set out to answer. My response to that question is and always has been, “Yes”. My answer comes not only as a BBI instructor, but also from my experiences as a student and as a mechanic/service manager both in small shops and large multi-store environments.
In the previous two articles (“Faster Service” and “Make Customers Happier”) we looked at how following BBI’s quantifiable and repeatable results reduced my repair turnover time to just 48 hours, and vastly improved my overall customer experience. In this article, we’ll look at the culmination of all that—an increase in revenue. It’s like an early mentor of mine used to say, “If it doesn’t make dollars, it doesn’t make sense!”
When I attended BBI in 2011, the service department I worked for did a modest $30,000 in labor. That’s a gross number of labor dollars only, no parts or accessories. In 2012, I focused on what I’d learned at the Institute to bring down my turnaround time to 48 hours (from what had been as long as two weeks in the busy season). That first year, my labor revenue increased to $48,000.
The following year, I realized that following BBI methodology not only made for a more efficient service department, but it could be used to create a far better customer experience. I focused on creating timely and accurate estimates, as well as creating a shop culture of transparency (something of a rarity in our industry). The customer response was overwhelmingly positive—to the tune of $60,000.
In the following years, while continuing to refine my procedures and customer experience through BBI methodology, my shop experienced exponential growth. This culminated in 2016 (the year before I became a BBI instructor), with a labor number of $90,000. Growth in my service department consistently outpaced the growth of the retail store by a significant margin.
Following quantifiable and repeatable procedures helped to make me and my staff more efficient, meaning that the size of the service staff didn’t have to grow in a one-to-one ratio with the increase in revenue. However, the quantifiable aspect of the process allowed me to quickly identify when the workload exceeded the workhours available, so I could add hours or staff as needed, confident that I wasn’t over staffing.
The success story doesn’t end there. My employer did a study of customers using our service department, and discovered that they spent 60% more in the store than those who didn’t. They also frequented the store more often—once a month, on average, as compared to nine times per year for patrons who didn’t use our services. For some, this may represent a shift in thinking: A healthy service department is profitable, yes, but it can also drive traffic and revenue to the retail side of the business (rather than the other way around).
The value of a BBI education founded in quantifiable and repeatable results then becomes clear. Applying those methodologies not only made me a better bike mechanic, but allowed me to grow my business, be profitable, and elevate my customer experience
Master Technician Graham Thompson is a Bicycle Mechanic Instructor at Barnett Bicycle Institute. For more information on Barnett, and how it can train your mechanics for success, visit bbinstitute.com.