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Welcome to NCM's Up to Speed Blog

Why Should You Care About Your Alignment Penetration?

Written By: Stephen Smith
Posted on October 04, 2018

If you’re not tracking your customer pay alignment penetration in your service department, you need to start today. Your service department is rich with gross profit potential and maximizing its efficiency should be a priority for every dealer. If you need convincing on the importance of alignment penetration, here are three reasons why it should be on your priority list.

First: Your Customers Need Them

There is a positive correlation between high customer satisfaction and achieving benchmark (or above) hours per RO. In other words, providing the customers with needed service maintenance makes them happy. If your alignment penetration is low, you are potentially doing your customers a disservice. Set alignment penetration goals by individual advisor and track it. Make a game out of it. Top performers will be over 15%. The best service departments in the industry did not become that way by failing to maintain their customers’ vehicles.

Second: Additional Diagnosis. 

Depending on your process, performing the alignment allows the technician to spend time diagnosing additional needed repair or maintenance work. Nothing leads to customer attrition faster than an issue arising soon after their vehicle was in your shop. To mitigate these types of issues, optimized dispatching is critical. Ensure a technician with adequate experience performs the alignment on higher mileage vehicles, leaving the later models for your apprentices or lower-paid techs. It’s a balance between maintaining high gross for maintenance work while not neglecting diagnostic opportunities.     

Third: Gross Profit Opportunity.  

If this op code is a “loss leader,” i.e., priced below market to stimulate sales of more profitable services, why is that? Let your loss leader be your LOF. How many of your customers come to you primarily for an alignment? Some do, but it is not the majority. Price your alignment to account for the value you are providing the customer. Highlight that you have the best trained technicians in town, best customer service in town, best coffee in town, etc. Review the itemized pricing on your menu regularly from a gross and effective labor rate perspective. Then adjust the variables (Price, Tech Pay, Hours Paid) to maintain your high gross. 

According to Kaleb Silver, Hunter Engineering Senior Product Manager, “Approximately, 60% of vehicles on the road are out of alignment.” Meaning there is a huge opportunity out there for your business. Train your service writers to sell alignments and track penetration by individual.  With a sound process, increasing your alignment penetration will increase your service department sales, gross, CSI, and profitability!
Learn more from Stephen and our other automotive consultants by joining a 20 Group, scheduling dealership consulting, or registering for automotive training in the NCM Institute. You'll be glad you did!

Mark Phillips July 15, 2019 7:01 PM

Great article. Basics

Mike Harvey July 15, 2019 6:22 PM

Great stuff!

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