Do the math: Comebacks cost stores $$$

By Dan Marinucci

Why work hard to do the job right the first time?
Because having to do it over again costs the business at least twice! So tire dealers who want to compete in automotive service must understand the real cost of comebacks. Skeptical readers may be rolling their eyes now, muttering, "Any owner or manager worth his salt understands this stuff, Dan!"

Well, I wish I could agree. But my experiences out in the field tell me otherwise. Too many service personnel I meet—from technicians right up to owners—pay lip service to the issue of comebacks. What's ironic about it is that these are the same people frantically searching for magic elixirs to keep their stores competitive in the auto repair market!

Beating comebacks builds profitability by eliminating a big time and money drain from the store's ledger. It also strengthens the store's long-term health by boosting customer loyalty. So approximating the real cost of comebacks is a worthwhile exercise.

Available vs. billed time
Suppose two competing tire stores with comparable manpower have service departments that operate 60 hours per week. As is often the case, the stores are very price-competitive because the owners monitor each other's prices closely. One doesn't want his store to look way out of line with his competitor.

Which store will out-duel the other in automotive service? Likely, the one that maximizes its time by billing for the largest percentage of those 60 available hours.

To look at it another way, each tech at the store has the potential of producing 60 billable hours. The healthier the business, the closer each tech is to delivering 60 hours of paid labor per week. The more productive a tech is, the more billable hours he logs.
Productivity seems to be a relatively obvious aspect of running a service department. In my opinion, a crucial but less obvious factor is the financial impact of a comeback. Everyone understands they can't charge for a comeback. But they miss the fact that correcting comebacks actually costs twice the time they think it does.

Here's why:
Suppose it takes your best tech two hours to straighten out a comeback. For now, the root cause of the comeback—it could be improper diagnosis, incorrect repair technique, a wrong part for the application or premature failure of a replacement part—is immaterial. Also, we'll assume there's no backup, such as a labor warranty, paying for the tech 's time.

The store's first loss was the two hours of free labor required to correct the job. The second loss, which most service personnel overlook, is the loss of two hours of available billable time.

Remember: The store only has a total of 60 hours of time it can sell every week. Any amount of that available time that's squandered is another debit on the ledger because it prevented another service sale from occurring.

How can you prevent a comeback from costing your store twice? First, locate an ace technician who wants to serve your store on an on call basis. Then bind him to a contract wherein he picks up the vehicle and corrects the cause of the comeback at his shop instead of yours. Then he returns the vehicle to you the same day and charges you the same labor you'd pay your own techs.

It astonishes me to hear ex-techs boast about being promoted to manager—so now they don't have someone pestering them anymore about their time. Strictly speaking, being a tech is easy because you're only responsible for your own time.

I think the manager's got the worst of the deal because he is, or should be, responsible for the time of everyone reporting to him. If he isn't accounting for their time, there's a fatal blind spot in the store's operation.

Coming to grips with lost time— particularly time lost handling comebacks—is difficult at best. The toughest step may be convincing owners and managers to treat every comeback at least as the double debit I described here.

In previous columns, I've argued that the negative impact of comebacks is magnified many times by unhappy customers who telegraph their unhappiness to friends, relatives and neighbors. But until a store's leadership recognizes and accepts the impact of comebacks, there's often little incentive to invest in things that stop.