Time is money—it’s an aphorism attributed to Ben Franklin, and it makes obvious sense. So obvious, like maybe oxygen or gravity, business managers don’t even think about it (until it’s gone).
A better way to drive the lesson home, for dealership leaders, is to think of time as inventory. If tens of thousands of dollars of trailers routinely disappeared from the lot, that’s a big problem. And so should be the valuable hours lost on the shop floor, virtually every day.
That’s the key takeaway to the Trailer Tech Expo Tow Talk session, "Driving Profit: Understanding Dealership Revenue Flow and Developing Service Leaders." The panel featured Sara Hey, president of Bob Clements International; Mark Spader, a 20 Group moderator and trainer with NCM Associates; and Ronnie Enns, owner of Happy Trailers.
Together, they explored how dealerships can shift from viewing service as a mere necessity to treating it as a primary engine for financial stability and growth. Their discussion provided a strategic roadmap for transforming the service department into a high-performing profit center by focusing on people, processes, and productivity.
Here are the three most critical actions a dealership can take to optimize its bottom line, based on the panel discussion:
1. Treat time as your most valuable inventory
The most significant mental shift a dealership leader can make is to recognize that time is the service department's primary inventory. Unlike physical trailers on a lot, lost time can never be recovered. Every day, a dealership "buys" eight hours of time from each technician; a manager's job is to ensure that inventory is sold efficiently.
Losing just one hour of billable time per technician each day can be catastrophic. For a dealership with three technicians and a $100 hourly labor rate, this inefficiency translates to a loss of $92,000. To protect this inventory, dealerships must implement rigorous processes for technicians to clock in and out of specific repair orders, treating a "missing hour" with the same urgency as a stolen trailer.
2. Implement flat rating and menu pricing
Many dealerships inadvertently give their customers massive discounts by billing via "time and material". When an expert technician completes a task quickly, the dealership loses revenue because it only bills for the hours worked. Instead, dealerships should adopt flat rating based on the time a B-level technician requires to complete a job with hand tools.
Efficiency is further enhanced by selling "solutions" through menu pricing. For example, rather than quoting an hourly rate for a toolbox installation, a dealer should offer a flat "out-the-door" price that includes the part and labor. To ensure accuracy, dealerships can use condition multipliers: adding a 50% time buffer for trailers in excellent condition and an additional 30% for those in poor or "fair" condition. This approach removes guesswork, improves billing accuracy, and rewards technician efficiency.
3. Establish independent profit centers with integrated incentives
Dealerships often fail when they treat service and parts as mere extensions of the sales department. To maximize efficiency, each department must be managed as an independent profit center with its own revenue goals and leadership.
True optimization occurs when these departments are integrated through shared incentives. By combining the profits of parts and service into a single "bonus pool," employees are motivated to work together rather than in silos. This creates a culture of mutual accountability where team members "police" each other to ensure everyone is pulling their weight. Furthermore, dealerships should focus on developing service leaders rather than simply promoting top technicians without providing them the management tools and training necessary to succeed in a leadership role.
The bottom line has to be the bottom line. Hey concluded the discussion with an anecdote about a senior technician who just didn’t like the idea of being tracked all day, every day.
“He said, ‘Sara, my wife doesn't get to know where I am all the time. What makes you think that the service department gets to know where I am all the time?’” she explained. “Okay, point taken. But there was not a long-term career for him at this dealership, because we started treating the service department's inventory, which is time, with the same dignity and respect that we treated whole goods with and parts with.”
This story appears in the May print edition of TBB.
