You know this will start a firestorm from those showing dealers how to increase their “back end” results. I’ve already received a couple of diatribes from “consultants,” but they can’t deny that their “model” is based on the old “cost plus” pricing model, something you have positively proven to be invalid in this new market!

My personal feeling is that the old GM model of 67% of retail labor rate for internal and “cost plus 30% for parts is a good starting point. I wouldn’t mark up sublet. I would encourage the sales departments to use the dealership’s services whenever it makes good sense, but I would not allow the “back end” to hold the front end hostage. There is too much at stake. Our industry has already driven many consumers to the Jiffy Lubes of the world. The perception of high dealer prices is real, even if it is not always substantiated. Losing business because we are trying to high gross our own sales departments never made sense to me.

They say “you can’t manage what you can’t measure.” But what we should have gotten, but didn’t get is lost revenue too, even though it can’t be exactly quantified.

Using velocity methods to drive volume tends to increase the internal account anyway, but the results are based on competitive pressures, not an arbitrary stroke of the pencil.

You know this will start a firestorm from those showing dealers how to increase their “back end” results. I’ve already received a couple of diatribes from “consultants,” but they can’t deny that their “model” is based on the old “cost plus” pricing model, something you have positively proven to be invalid in this new market!

My personal feeling is that the old GM model of 67% of retail labor rate for internal and “cost plus 30% for parts is a good starting point. I wouldn’t mark up sublet. I would encourage the sales departments to use the dealership’s services whenever it makes good sense, but I would not allow the “back end” to hold the front end hostage. There is too much at stake. Our industry has already driven many consumers to the Jiffy Lubes of the world. The perception of high dealer prices is real, even if it is not always substantiated. Losing business because we are trying to high gross our own sales departments never made sense to me.

They say “you can’t manage what you can’t measure.” But what we should have gotten, but didn’t get is lost revenue too, even though it can’t be exactly quantified.

Using velocity methods to drive volume tends to increase the internal account anyway, but the results are based on competitive pressures, not an arbitrary stroke of the pencil.