One word every Service Department needs.
What would be the one word to describe what a Service Department needs these days to compete?
There are so many to choose from. However, the one word that keeps coming up when I visit Dealerships across the country is adaptability.
The Dealerships that are doing well, adapt to changing market conditions and Customer demands.
Even if this is your first day in a Dealership, you know that the ability to adapt is the key to Exceeding Expectations.
The dictionary tells us that it means to “adjust to new circumstances.” Boy, if that is not the definition or guiding principle of the Service Department these days, I don’t know what is.
If you think about it, the Service Department is the only “gray” area in the Dealership. Everything else is black and white.
We have the part in stock or we don’t. We have the car on the lot or we don't. We can fund you or we can't. We are open extended hours or we are not.
In the Service Department, they don’t have those hard and fast rules because Customers and the situations that Service Advisors deal with are seldom written in stone. It’s more like an “etchasketch.”
This requires a person that is adaptable, flexible and understanding with the backing of an organization that is adaptable, flexible and understanding. Having either without the other won’t work.
And if you have Service Advisors who do not understand this concept or cannot adapt to a Customers Expectations, you will have problems.
When you have staff that are rigid and inflexible, you end up with Customers getting service that they would describe one of several ways. They say things like “Functional, yet cold” or “They helped me but they were somewhat unfriendly” or “I had to yell at them to get them to listen to me” and lastly “What the %$&^ is wrong with you guys?”
On the flip side, if you have personnel that are really trying to work within your Dealership system and are not “Empowered with Authority” you end up with comments like “I have used you guys in the past and I’ll continue, but not as much as I used to” or “I don’t know if I’ll come back, even though your Advisors are great” and “They were ok, but if I find someone else that is closer or cheaper, I’m going to go with them” and lastly “What the *&^% is wrong with you guys? Don't you want my business?”
The Service Department that has “Empowered with Authority” all of their Advisors will consistently outperform and outsell any other Dealer that has not taken that step.
This means Advisors are Trained to be adaptable and flexible and they do what is in the Best Interests of the Customer.
This leads to a Customer experience that can only be described as “Exceptional at Exceeding Expectations” and "spontaneously helpful." And of course results in unsolicited referrals and an increase in business.
Learn to adapt, be flexible, change as needed and Empower with Authority and your Customers will respond with feverish repurchase loyalty and unsolicited testimonials.
Saving Newbie Advisor
In the movie “Saving Private Ryan”, an Army unit is sent to rescue the last surviving brother for a mother in waiting. The team is successful and Private Ryan returns home to live a life of fulfillment.
Nice story. Great plot. Excellent movie.
What has that got to do with Fixed Operations and Service Advisors?
Well, it is more about what you are not doing than what you are doing. And “Saving Newbie Advisor” could just as well be titled “Saving Every Advisor.” But I chose Newbie because it brings home that in every Service Manager there beats the heart of a Trainer and Coach (at least there should be) , and that last thing we want to do is put Newbie Advisor in a position to Fail.
So the question is, “If I am the Service Manager today, what 3 things would I need to teach my Newbie Advisor so that I could save him or her from the same mistakes that most every other Advisor makes in their respective careers?”
1st, lets teach them How to be Investigatory. In other words, how to ask good questions. Let me give you an example of a bad question. “Would you like fries with that?” Why is that a bad question?
Because everything preceding that question was order taking. Order taking is just that. Writing down what the person told you, putting that into the computer and waiting for the next request. Anybody can learn to do that. Heck, we taught a monkey to fly in space using the very same technique.
Advisors are investigatory. They ask questions that are investigative in nature. “Mr. Customer, I noticed that it’s been 6ooo miles since you had your tires rotated. Would you like for me to rotate them for you today?” or “Mr. Customer, during your last visit we recommended replacing the upper and lower radiator hoses. Has that been taken care of yet?”
2nd, lets teach them how to be Sell properly. A true Salesperson is the ultimate Professional. They study their craft by reading, training and role playing. They leave nothing to chance that is in their direct control. They always know how to respond even if they don’t know what they are going to say.
Too many times our Newbie Advisors are in the position to make a Sale and have no clue how to properly do it. They say the wrong thing or even worse, never say anything at all! They lack confidence to complete the transaction if there is anything outside of the ordinary because they haven’t been trained to deal with the unexpected. (Does Handling Objections sound familiar?)
Lastly, lets teach them how to Listen properly. Listening is a skill like any other. Stop practicing good Listening habits and watch the Sales tumble like BP’s stock after the oil spill. Straight down the Leader board.
Good Listening start with eye contact and paying attention. If you find your Advisors staring at the computer screen and answering the phone when the Customer is standing in front of them, it might be time for a “Saving.”
Saving Newbie and Every Advisor does not need to be a rescue mission if Training and Coaching are a priority and practiced daily. Take a look at your Advisors and see if they are in need of being saved. Teach and Coach How to ask Investigative Questions, How to Sell and How to Listen and watch your Service Sales increase.
Service Advisor Training---Expense or Investment?
A significant number of dealers these days are becoming more and more aggressive in selling used vehicles. Some have even lost their new car franchises and now rely solely on used vehicle sales along with parts and service sales to pay the overhead and hopefully provide them with a significant Return on Investment (ROI). I’m confident you will agree that it is critically important for all dealers to earn the highest possible ROI on every single investment they make, right?
Now, in order to increase sales in any department you have to start doing things differently and/or do different things. If not, then you simply continue to do what you’ve always done as stated so clearly by Zig Ziglar: “You have the perfect processes in place to get you exactly what you got last year.” I’m talking about training here in order to positively affect change. Some of you will take the approach of “saving your way into profitability” by vowing not to increase your expenses but you remain willing to make investments every day of your business life. Let’s consider some examples.
NADA research shows that the average used car cost (investment) is about $13,300 and sells for around $15,000 resulting in a gross profit of $1700 which is a ROI of 13%. ($1700 divided by $13,300 = $13%). Assume you can turn that inventory investment of $13,300 every 30 days (great job) that would be 12 turns per year at $1700 gross PRU for a total gross profit of $20,400 resulting in a ROI of 153%! My guess is none of you would hesitate to invest $13,300 in a used car knowing that you will realize a 153% ROI over the next 12 months. As a matter of fact, many of you wouldn’t hesitate to make multiple investments: 50, 75 or even 100 of those $13,300 cars to earn that kind of an ROI. Makes perfect sense to me!
Research also shows that a Service Advisor servicing 12 customers per day (4 Warranty and 8 Customer Pay) and averaging 1.5 Hours Per Repair Order at NADA benchmark’s will produce about $1637 in Gross Profit per day, $36,016 in Gross Profit per month and a total of $432,194 in Gross Profit per year. Let’s assume you diverted just one of those $13,300 used car inventory investments into a $13,300 training investment in your Service Advisor and that training produced an extra .5 HPRO (33% Improvement), you would realize a Gross Profit increase of about $12,000 per month or $144,000 over the next 12 months resulting in a ROI of 1082%! (If your stock broker can do that for you please send me his name and number.) Let’s finish the math here by adding the additional gross profit of $144,000 to the $432,194 and you have a total gross profit of $576,194 produced by one employee—The Service Advisor. Now I ask you, how many employees do you have producing over $576,000 a year in Gross Profit? Maybe your F&I Producers. How many salespeople are producing that kind of gross for you? This is the equivalent of selling 28 used cars a month at $1700 PRU. How many sales people are selling an average of 28 cars a month to match the performance of a 2.0 HPRO Service Advisor? How’s that $13,300 training investment working out for you now? Is it an expense or an investment? Maybe you should ask your broker to answer that one for you?
Let’s continue on with this logic and consider the following:
1. Who gets the most incoming Sales Calls per day—Salesperson or Service Advisor?
2. Who meets and greets the most Sales Opportunities per day—Salesperson or Service Advisor?
3. Who has the greatest impact on Owner Retention—Salesperson or Service Advisor?
4. Who has the greatest impact on Brand Loyalty—Salesperson or Service Advisor
5. Who needs Telephone & Sales Training—Salesperson or Service Advisor
The answer to questions 1, 2, 3, and 4 is the Service Advisor. The answer to question number 5 is both the Salesperson and the Service Advisor. The simple fact is anyone in your dealership who comes in contact with your customers as well as your potential customers, must be professionally trained on how to effectively communicate (Sell) to them all.
I’m sure far too many of you Dealers, General Managers and Service Directors will continue to try and “save your way into profitability” versus being proactive and commit to re-allocating some of your inventory investment into your training investment. For those Dealers, General Managers and Service Directors who “get it” you can look forward to record Service and Parts Net Profits in 2010. It’s your choice to make.
Article by:
Don Reed
CEO-DealerPro Training Solutions
NADA University Partner
Recruiting Top Performers:
How To Hire What You Want And Need
Do you plan on hiring additional fixed operations personnel this year or possibly replacing someone who currently isn’t getting the job done? I’m talking specifically about technicians, service advisors, parts managers and service managers. If so, do you have a well-thought-out strategy for recruiting top performers?
What is a top performer? It is simply someone who can perform above the industry’s performance guides for the position you wish to fill. These people thrive on performance-based compensation and are looking for more than just a weekly paycheck. They expect to be well-compensated for the above-average efforts that produce above-average results, which usually means more profit for their dealer. To put it another way: you get what you pay for! That being said, how do you find and recruit these top performers? You can be sure they’re not standing in line at the unemployment office or sitting at home waiting for the phone to ring. They are most likely employed by one of your competitors.
The first step in recruiting for any position is to determine the maximum compensation you are willing to pay to a top performer. Secondly, you must prepare a list of the benefits you can offer this person. Thirdly, you must decide how you are going to search for this person. Let’s look at technicians, for example.
To begin with, determine the W-2 earnings last year for your highest-paid technician. This is probably a technician who has a productivity level of 140 percent or higher. Let’s assume he earned $70,000 for the year. This now becomes the benchmark for the new hire’s compensation.
Next you must define your benefits. Remember that you want to recruit from not only your aftermarket competitors but from other dealers as well, so you must list the benefits of working at your dealership. (See the sample ad below for examples.)
Lastly, you must decide how and where you intend to advertise for this position, which for most of you will be your local newspaper. When advertising in the newspaper, do not buy a 3- or 4-line ad in the help-wanted section. Instead, spend the money to buy a display ad, maybe two columns by five inches.
I know it will cost a lot more than the liner ad, but here again, you get what you pay for. A liner ad will probably produce two or three applicants, whereas a display ad will bring in closer to 10, which of course gives you a lot more candidates from which to choose. Keep in mind that it doesn’t matter whether you want to recruit an A-, B- or C-level technician; an effective ad will attract all of them.
To see what the ad content will look like, see the sample ad below:
WANTED
Automotive Technicians
ALL skill levels needed
Earn Up to
$70,000
PAID Health Insurance No Sundays
401K Plan Paid for Training Programs
Professional Work
Environment Full Appreciation for Work
Done
Terrific Bonus Program Ohio's Top Pay Plan
No Nights (Apply In Person)
Obviously, C- and B-level technicians will respond to this ad, and so will A-level technicians who aren’t currently earning $70K a year or who don’t have health insurance or a 401K. Aftermarket technicians will respond as well, attracted by the promise of no nights or Sundays and looking for additional training to increase their skill level.
As you can see, the ad was effective because it was able to attract a wide range of applicants. If you need help designing your recruiting ads, just send me an e-mail (Don@AutoDealerMonthly.com) and I’d be glad to send you some samples.
Everywhere I go, I hear dealers and service managers utter these same words: “Don, you don’t understand; technicians are hard to find.” Well, I do understand this: there are nearly four times as many aftermarket service facilities (over 80,000) as there are new car dealers (about 22,000). Who do you think employs the majority of the technicians in the work force?
I recommend you strive to recruit aftermarket technicians because most bring some very good work habits with them, such as performing a complete inspection of every vehicle before making repairs. Aftermarket technicians service all makes and models. They are trained on light repairs and maintenance services, which is exactly the kind of work you need in your service department to increase your retail service sales.
Over time, these technicians can become top performers in your dealership. Don’t limit your options when looking for top performers. Be aggressive and open-minded in your recruiting efforts and start growing your service business.
Don’t end up with someone else’s underachiever. Be aggressive, spend a little money and recruit as many applicants as possible, and I’m confident you will be able to hire a top performer.
Don Reed
CEO, Fixed Ops Solutions
DealerPro Training Solutions
