The 6-Month Gut Check:

I had a call last June with a dealer in the Mid-Atlantic — solid operation, good team, and a spring that by all appearances had gone well. He was in a good mood. Units had moved, the service board was clearing, and revenue was up. Then I asked him one question: “How did your service department perform against budget?”

“Honestly, George, I haven’t looked. I assume it was good — we were slammed all spring.”

We pulled the numbers that afternoon. Service revenue was up 11% over the prior year. Service gross profit margin was down 6 points. He had run the department harder than ever, logged more repair orders than any spring in his history — and made less on each one than he should have. Nobody caught it because the top line looked fine.

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