Best Practices: Length of Use (LOU)

One significant metric to measure the effectiveness and efficiency of your fleet is length of use (LOU): the average number of days that agreements at a given location remain open. TSD DEALER uses the following formula to calculate LOU: Agreement days divided by (/) number of closed agreements.

This metric has a direct effect on the number of repair orders (ROs) your Service Department can write, utilizing the fleet you have. The lower your LOU, the more ROs you are able to write, which directly affects revenue and profits.

Manage LOU

Monitor engagement of Service Advisors. Before the unit leaves the lot, how are your Service Advisors asking customers for the unit to be returned? How are they asking for the unit to be returned when repairs are completed on the customer's unit? How actively and broadly are they contacting customers?

Set customer expectations before the unit leaves the lot. Let the customer know the unit is promised to another person when it is returned, and that delays can cause problems for others.

Review the Length Of Use metric tile on the Agreement Performance dashboard. See "Agreement Operations and Performance Dashboard".

Run the Length of Use (LOU) report at least monthly. Run the Length of Use (LOU) Report to gauge average length of use for your current location, broken down by Service Advisor.

Use the Fleet Calculator tool to help you assess your LOU compared to recommended values for the industry. The Fleet Calculator tool on the Fleet Performance dashboard takes the number of ROs you write per month and your current Fleet Performance dashboard metrics and displays your actual length of use (LOU), utilization, turn rate, and fleet size compared to recommended values for the industry. Use this information to make business decisions that aim for a lower LOU so you can write more ROs and ultimately bring in more revenue.