R this and R that

R this and R that. Which one is the right R for our Dealership? If we concentrate on ROI, what do we lose in ROR? Is it possible to have too much focus on ROR?

Wait. I didn’t explain what I am talking about very well. Ok. ROI is referring to Return On Investment. This “Investment” can be anything. Time, Money, Parts, Labor…anything. And when we “Invest” we have a perceived “Return” we would like to get back.

ROR is Return On Relationship. And this too requires an “Investment.” Of ourselves. That’s why ROR is a little more important (IMHO) than ROI. Because we put “ourselves” in the building of the Relationship, when we don’t get a “Return”, we feel bad about the decision.

If we put a part on a car or give a discount, and the Customer goes sideways or doesn’t come back, we feel the loss of revenue. And when it doesn’t work out, we might mutter under our breath, but we can move past it because we don’t have a piece of us on the chopping block. We can “write it off” as a “bad investment.”

When we start building Relationships we put some of ourselves into this Relationship, and the last thing we want is our Customer to go someplace else to have Service work performed on their vehicle. Our “Return On Relationship” suffers and we have a difficult time “writing it off” because it is about us.

Yes, we need ROI. Profit is important. Revenue is important. We work for MONEY! But, the Relationships we build with our Customers is even more important. Without ROR, every Dealership will fail.

So, what do we do different in Service to build a Relationship that is different from every other department in the Dealership? Not much.
In Sales, do we not strive to build a Relationship or a connection with the Customer as they come on to the lot, call us on the phone or send us an email?

In Sales, do we not have a Sales process to guide the Customer from the initial Meet and Greet through the Sales transaction to delivery and then

Layers of a typical sales funnel. (Photo credit: Wikipedia)

follow-up?

In Sales, do we not advertise for additional business using every media available to us?

In Sales, do we not have a process that every Sales Customer is taken on a tour of the Dealership and introduced to every department so they can make the transition from “Here is a New Sales Customer” to “Here is OUR New Customer?”

In Sales, do we not have one meeting a week at a minimum to generate excitement, introduce upcoming Sales events, reinforce best practices, go over aging inventory, describe specials and define Goals for the coming week/weekend?

So, if we do all of these things in the Sales department, and it is part of the Standard Operating Procedure to build a Relationship with the Customer, why would we do something different in Service?

We wouldn’t. In building Relationships with our Customers, we need to be consistent and Send the same message to our Customers from the initial contact to the initial Service appointment.

In Service, we need to start the ROR process from the moment we first meet the Customer. The strongest message we can send begins with a proper Greeting, a friendly outgoing attitude and a complete and thorough walk around every time they come in for Service.

In Service, we must have a Sales process to efficiently guide the Customer and ADVISE them as to the proper way to MAINTAIN their vehicle so they get maximum life and value from their purchase.

In Service, we must have an advertising budget to keep in contact with our Customers in a manner they have come to expect and taking into account how they want to be contacted. We must be as media savvy as any other Dealership department.

In Service, our ROR process must include a “How to” of the Service department. Everything from “How to make an appointment” to “How will the Advisor advise me on needed services and repairs?”

In Service, we must conduct weekly meetings with our personnel to generate excitement, describe specials, discuss service issues, reinforce best practices and define Goals for the week.

If our Standard Operating Procedure was the same for every Department in our Dealership, would we not have an EXCEPTIONAL Return on Relationship which would give us an EXCELLENT Return On Investment?

“Missed it by that much”

There is an old saying carpenters use. “Measure twice, cut once.”

I recently went to a Dealer to present DealerPro and our Performance Driven Training Program and guess what…I measured once and missed the cut.

I didn’t miss by much. About a 1/16th of and inch or so. When you really think about it, on a small scale, 1/16th is not that much at all. It really does not seem that big a deal.

But miss by 1/16th of an inch when you are calculating something like the square footage of your home and taxes are involved and suddenly you remember things like high school algebra and can quote complex mathematical theories.

The point I am making is everyday we all say things to ourselves like “Oh, it’s ok if I don’t give that Customer a menu because I know that they don’t buy anything” or “I’m not going to worry about that multipoint inspection. They were in just a few months ago” and we give ourselves a pass.

Why?

It’s just a little bit and it won’t make a difference. Right?

I flew 200o miles to present our program to a Dealer that was not prepared to see me because I failed to follow my own process. I got busy with other things and did not “measure twice, cut once.” Can you guess the end result?

It’s never the big disaster that kills a deal. Big disasters almost always start with small decisions that don’t really seem that important when you are making them.

Deciding not to personally call this Dealer and get him on the phone even after we had talked a couple of times, did not seem that big a deal. I mean, everybody reads their email…right? And everybody can read and follow directions…can’t they?

It was only a little shortcut. And it caused a huge miss.

Are your Service Advisors taking those little “shortcuts” because in their minds “it’s just a little thing” and nobody will notice? Are you allowing your Service Team to circumvent, use “choice implementation” or refuse to follow processes that are in place? Are they “missing the cut?”

Take the time NOW to review everything you are doing that is working and everything that is not working and find out why.

Grandma dropped her car off and did not get a multipoint inspection? Why?

Mr. Jones came in for a recall and was not offered a menu? Why?

Billybob the local twice a month customer came in and was not greeted properly? Why?

Silly Sally the Service Advisor did not complete and walk around on her 10 writeups today? Why?

Ms. Coffeecellphone came in and was completely taken care of and even wrote a letter to the owner about her recent service experience. Why?

It’s not just about what is not being done. It also about what is being done correctly.

Find out what is being done correctly… train, show,coach, review, train, show, coach, review, lather, rinse, repeat daily for maximum results.

Do this enough and missing by just a 1/16th becomes a footnote in your Success Story.

Me, I’m back to measuring twice. I hate missing the cut. Don’t you?

Was Last Month Defined By Two Simple Words?

Was your last month defined by these two words…”If only”?


“If only…”

The Dealer Principal

“If only” I had asked my Managers “What is your plan for increasing Profit this month?” and held them accountable for their replies.

“If only” I had taken a walk every day and made it my mission to talk to Sales and Service Customers, introduce myself and say “Is there anything I can do to help you today while you are here at our Dealership?”

“If only” I had walked through the Dealership and asked my personnel “What is there about your job you like to do?”

“If only” I had walked through the Dealership and asked my personnel “What is there about your job you don’t like?”

“If only” I had asked the Service Manager “What is your daily routine when you come into work in the morning…in other words…walk me through the first 10 things you do every day.”

“If only” I asked the Service Manager “What is your plan for getting Labor Margins to 75%?” and the Parts Manager “What is your plan for getting the Parts Margins to 45%?” and held them accountable for their actions.

“If only” I had asked the Service Advisors “How do you do a Walk-a-round?” and let them demonstrate it to me.

“If only” I had asked the Service Advisors “What does it mean to ask for a Pre-authorized amount when writing a repair order?” and then observed them doing it.

“If only” I asked my shuttle drivers to take me with some Customers on a shuttle ride so I could see how they were treating the most valuable asset I have…My Customers.

“If only” I had been more involved in the daily business of my Dealership. What would have happened? Would I have been able to influence the outcome?

“If only…”

General Manager

“If only” I had held a meeting in which I asked the Service Manager and the Parts Manager “What is your plan for increasing Gross Profit…increasing Repair Order Count…increasing CSI?” and held him/her accountable for their actions.

“If only” I had held a meeting in which I asked the Parts Manager “What is your plan for increasing Item Transactions…Gross Profit Margins…Wholesale Item Transactions?” and held them accountable for his/her reply.

“If only” I had walked through the Service Department once a day and introduced myself and asked my customers “Is there anything else I can do for you today?”

“If only” I had walked through the Service and Parts Departments and asked Dealership personnel “Is there something preventing you from doing your absolute best?”

“If only” I had weekly meetings with my Fixed Operations Managers and asked them “How are we doing in meeting our monthly objectives and what can I do to help you get there?”

“If only” I had taken the time to have a monthly meeting with the Fixed Operations personnel and congratulated them on something that they did well.

“If only” I had been less tied to my desk where I only hear what people want me to hear. Would I have been able to prevent a bad month from happening.

“If only”

Service Manager

“If only” I had been in the Service Drive every day especially during the busiest times to work with my Advisors and help them become more Professional.

“If only” I had taken the time to be available to the Technicians and Advisors especially during the busiest times and help them overcome problems with production.

“If only” I had coached my Advisors every day on the previous days results using the reports from the DMS.

“If only” I had coached my Technicians every day on the previous days results using the reports from the DMS.

“If only” I had taken the time to introduce myself to my customers and asked them “Is there anything else I can do for you today?”

“If only” I had asked my Service Advisors to demonstrate an ASR presentation and then coached them on the results…again and again.

“If only” I had reviewed the Customer Pay Repair Orders with the Advisors and Technicians and coached not only on what was wrong, I also coached them on what was done right.

“If only” I had taken control of my month.

Everybody

“If only” I had accepted responsibility for my actions, held myself accountable for what I needed to do, made changes when necessary and reviewed my progress, what kind of month would I have had?

Comfort Zone vs Accountability

As a Dealer, did last year bring you the return on investment that you expected?

As a General Manager did you meet or exceed your net profit projections for the year?

If you are a Fixed Operations Director did you increase your customer pay retail sales for parts and labor over last year?

For all three of you, is your Service Absorption rising year over year? If any of your answers were “NO”, then you must ask yourself...why?

To begin with, your financial statements will show you where the opportunities for improvement (conditions) are but what they won’t show you is how to fix them. To fix them you have to know what’s causing the out of line condition.

Once the cause is determined you can then make the corrections

necessary to properly bring the condition in line with industry guides. For those of you who have ever written a repair order you probably recognized this as the “Three C’s”, Condition-Cause-Correction.

The Technician needs the Condition to properly diagnose the Cause which then enables him to make the necessary Correction. It’s no different for the Dealer, the General Manager or the Fixed Operations director when it comes to making money.

So, now that you have studied your financials carefully to determine the conditions that prevented you from attaining your respective financial goals, let’s determine what the cause might have been. I believe the culprits here are Comfort Zones and Accountability.

Everyone in your dealership has a comfort zone just as you do. The issue is not to get rid of them but to simply move them again and again until you achieve the results you’re looking for and then move them again!

This is important because it enables you to focus on the performance

of your employees. Next, you must hold them accountable for their individual performance.

Currently, most of you are doing that in the New Car, Used Car and F&I departments, which of course is where you devote much of your time and energy anyway, but you fail to do so in the Service and Parts departments.

Allow me to give you some examples to clarify what I’m talking about:

1. If I am a Salesperson and I sold an average of 5 units per month last year, what are you going to do with me? Answer: Train me how to sell 10 units or more per month or replace me with someone who can.

2. If I am a Service Advisor and I sold an average of 1.5 hours per customer pay repair order last year, what are you going to do with me? Answer: I have a job for life!

3. If I am a Sales Manager and my Sales Team averages 5 units per month and my gross per retail unit is at $700, what are you going to do with me? Answer: Train me how to average 10 units per Salesperson and gross $1500 PRU or replace me with someone who can.

4. If I am a Service Manager and my Service Team averages 1.5 HPRO and my Technicians’ productivity is at 80%, what are you going to do with me? Answer: Leave me alone because the other dealers in your 20 Group are about the same!

5. If I am your General Sales Manager and my Sales Team averages 5 units per salesperson, $700 gross PRU, $200 F&I gross PRU and loose $600 per wholesale unit, what are you going to do with me? Answer: I wouldn’t have lasted 6 months let alone a year!

6. 6. If I am a Fixed Operations Director and my Parts and Service Team averages 34% in retail parts gross, 62% in labor gross, averages 1.5 HPRO, shop productivity of 80% with a declining repair order count, what are you going to do with me? Answer: Thank you for being back there because I sure as heck don’t want to fool with that stuff!

Are you starting to see my point?

Most Dealers and General Managers will hold their Sales Team accountable for their performance on a daily, weekly and monthly basis and make any adjustments (moving their comfort zones) on an as needed basis NOW!

Meanwhile their Parts and Service Team remain in their comfort zones to continue to dwell in the land of “underachievers”.

Why does this happen?

My belief is that most Dealers and GM’s are outside their comfort zone in the “back end” of their dealership since their roots are in the “front end.” What can a dealer do to enable him or her to leave their comfort zone and cross over the demarcation line to the back end of their business?

• Measure the performance of the people you intend to manage.

• Your people must know that you are measuring their performance.

• Their performance will be compared to industry benchmarks.

• They must understand that they will be held accountable for achieving or exceeding those benchmarks.

Simply say what you mean but more importantly mean what you say. Again, most dealers don’t hesitate to do this in their Sales and F&I departments. Start making it happen in Fixed Operations.

Now I want you to rid yourself of the usual whiny excuses that I here from dealers when I’m speaking to 20 Groups, Dealer Associations, Dealer groups or individual Dealers. It doesn’t matter whether it’s north, south, east, west or rural versus metropolitan. I hear this all across the U.S.,

Canada and the United Kingdom:

“Don, you don’t understand, my market is depressed.”

“Don, you don’t understand, my Service Manager has been with me for a long time.”

“Don, you don’t understand, I can’t find an Advisor that’s any better.”

“Don, I don’t want to run off my customers by up selling”

Well folks, here is what I do understand.

A depressed market has nothing to do with accountability for performance.

Time on the job does not dictate a good performance on the job.

If you can’t find better people, look harder because they are out there. If you or any of your people are afraid of “running off customers from up selling” then you need to get out of the retail business of selling parts and service. (By the way, the aftermarket already has 70% of your customers’ maintenance)

Don’t you think it’s time to get out of your comfort zone and make the return on your investment that you deserve? Please, drag your Fixed Operations Team out of their comfort zones and start holding them accountable! Once they stop kicking and screaming they will all make more money, they will be happier and your customers will realize you have the best dealership in town.

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.” -Peter F. Drucker

Don Reed

CEO

DealerPro Training Solutions

“Pro Solutions-Pro Results”

The one word every Advisor needs to hear...

There is one word every Service Advisor needs to hear.


This word is the key to their future...whether they become a top-notch superstar a middle of the road average Joe or a washout...they need this word.

It defines greatness as well as highlights deficiencies.

The word is...No.

Since our Company (DealerPro) trains in Dealerships all over the country, we are exposed to every level of Service Advisor imaginable.

From the greenpea who is day one in a new job to the old dog who knows every customer who has come in for the past 5 years!

In the Seattle area there is a Service Advisor named Chad who became a believer in the word No!

Chad did not come from an automotive background, unless you count driving a car, and had no more special skills than anybody else. He does not come to work wearing a cape and he does not have x-ray vision.

When we first started training in Chad's store and introduced Professional Selling Skills to the Advisors, Chad was skeptical just like everybody else.

After being trained on the 12 Step Process and ASR Presentation Skills he went to work in the service drive. At first, did some of the Write-up processes some of the time and followed the ASR Presentation process sometimes... and just like everybody else, he got what you might expect...some results.

But Chad was a little different.

He understood the value in presenting all of the recommended repairs and maintenance to the customers but didn't always follow through. Like many other Advisors, he didn't want to seem "pushy" or "sell them something they didn't need."

And he didn't like the word No.

What changed for Chad is referred to as a paradigm shift. His view of "what it means to be a Service Advisor" became radically different when he realized that the customers were having repairs done someplace else even though he had made the recommendations.

And other customers were coming in with the maintenance on their vehicle up to date because it was completed by other shops...his competition! He realized he was getting all of the "leftovers"...and the "warranty work."

He asked himself "Why are customers leaving my shop without having the work their vehicle needs completed right here at my Dealership?"

And then it hit him...it was because he NEVER ASKED!

He realized he was afraid to ask!

He made up his mind that his customers were going to be serviced at his Dealership! He started believing that the recommendations he was making were helpful to the customer in maintaining their vehicle and actually saved them money!

And he became a fan of the word No.

He started presenting recommended services...and repair recommendations ...and in the beginning he heard a No a lot. In fact, if you ask him, he will tell you that he almost gave up!

But he had decided that in order to be successful as an Advisor he needed to learn how to sell. And so, he heard even more No's.

And in his mind he decided that every No was a good thing because that led the next YES!

And because he stuck with it...more and more No's came his way... and still Chad kept going... and going... until finally one day...he started getting YES.

And soon the amount of YES'es doubled the N0's.

Can you guess what happened to Chad's HPRO?

Yep...it doubled as well... in fact...he became the number one Service Advisor in his store. Can you guess what happened to his income?

Yep...it nearly doubled as well.

Chad is still happily employed at that same Dealership...can you guess how his CSI is? Yep...it's better too!

All of us like to deal with a Trained Professional...someone who can guide us and help us make the right decision based on our needs and wants. Know what else is true?

We will gladly pay for it...and in some cases pay even more. It's because we all like to be taken care of.

Want to be succesful as a Service Advisor?

Be like Chad.

Get more No's!

A recent Fixed Operations Study and what it reveals about Service Sales, Profitability and more...

Recent studies show that Service Advisors that hand out menus during the write up process experience an increase in Customer Maintenance Sales. The study also shows that this corresponds to an increase in the Service Advisors pay.

These recent studies also show that Technicians that completed a Multipoint Inspection on every vehicle flagged more hours than Technicians who did not. An interesting side note to the study, Technicians who completed the most Multipoint Inspections made the most money.

Furthermore, the study revealed that Professionally Trained Advisors had higher CSI Scores than Advisors who received little or no Training at all. In fact, during the study, Customers preferred talking to a monkey rather than an Un-Trained Un-Professional Service Advisor by a margin of 5-1. (Note; no monkeys were harmed in the study and were paid in peanuts for their participation, same as the Un-Trained Advisors)

Customers also preferred to have their vehicles repaired in one visit rather than having to return to the Dealership for repairs later due to an Un-Trained Un-Professional Advisor not being able to reach them during the day to complete the repair process. The Advisors who asked for a Pre-Authorized Repair Amount out serviced and outperformed the monkeys…er…Un-Advisors by a margin of 100%.

Additionally, Dealerships with Trained Professional Advisors had higher Gross Profit amounts than other Dealers who have monkeys... er…Un-Advisors. This was not too surprising to the Professional Advisors and Service Personnel but came as a shock to the monkeys…er…Un-Advisors who blamed the results on “demanding customers and high management expectations.”

One other aspect the study revealed was that Dealers who increased their Gross Profit had a Net Profit Increase as well. And interestingly enough, those same Dealers had an increase in Service Absorption. And the most telling aspect of the study revealed that Dealers that had an Increase in Gross Profit, Net Profit and Service Absorption stayed in business longer than those who did not.

One final note on this recent study…all of the Dealers that had monkeys…er…Un-Advisors working in the Service Department have closed.

Missed Profit Opportunities

In the pursuit of additional profit opportunities in your service department, you must focus on maintenance of your customers’ vehicles. This is a missed opportunity for many dealers who do not perform complete, thorough inspections of their customers’ vehicles and do not make recommendations for preventative maintenance based on time, mileage, local conditions, etc. The value of these missed profit opportunities might surprise you.

To begin with, let me ask you this question: What percentage of your customers take delivery of their new or used vehicle and then, once they get home, remove that maintenance manual so they can review and study their required and recommended maintenance services? I don’t know the exact answer but I’m pretty confident the answer is, not very many. I’m talking about the transmission services, coolant flushes, air filters, pollen filters (which very few customers know they need), alignments, tire rotations, and the list goes on, and on. Everyone knows when to change the engine oil, but how many do you really think know when to perform all of those other maintenance services?

Next question: Are all of your customers mechanically inclined and can they perform all maintenance services on their vehicles themselves? Most customers rely upon someone with knowledge of their vehicle to provide recommendations for the proper maintenance and service on their vehicle.

It’s kind of like going to the dentist; the dentist performs an inspection of your teeth on each and every visit and makes recommendations to you based on the time since your last visit and the condition of your teeth. You know that you have to brush after every meal and floss, but there are other things your teeth need that you may not be aware of.

You rely upon a professional to help you maintain healthy teeth. An automobile customer is no different. They rely upon a professional, your technician or your service advisor, to properly advise them on how to maintain a reliable and safe vehicle which, in the long run, provides a much more enjoyable driving experience. There’s nothing worse than going on a trip with the family and having a problem occur with your vehicle, right?

Okay, so let’s look at the profit potential regarding this process of inspecting every vehicle and making recommendations to your customers for additional maintenance. In working with dealers all over the country, I have found that a complete and thorough inspection will produce, on average, an additional 0.7 hour of labor per retail work order. Let’s use the following assumptions when calculating the profit opportunity in our model dealership/service facility:

•Retail labor rate of $85 per hour
•Retail labor profit margin of 75% (Techs are paid $21.25 per hour)
•Parts-to-labor sales ratio of 0.8-to-1 ($0.80 in parts sales = $1.00 in labor sales)
•Retail parts profit margin of 45%
•Average 500 retail work orders per month

By performing complete and thorough inspections of all 500 vehicles we find, on average, 0.7 additional hours to sell at $85 per hour equals $59.50 in labor sales. At a profit margin of 75 percent, this produces additional gross profit of $44.63. At a 0.8-to-1 ratio our parts sales would be $68 per hour with a profit margin of 45 percent, which produces additional gross profit of $30.60 per repair order. Add the two together, and our total additional gross profit equals $75.23 per work order. Multiply that by our 500 work orders and the result is an additional gross profit of $37,615 per month. That comes to $451,380 for the year, based on 500 work orders each month.

Now ask yourself this question: “How many additional vehicles would I need to sell throughout the year to produce another $451,380 in gross profit?” If your average gross profit per unit is $1,500, this equates to approximately 301 additional vehicles. Does that get your attention? The point is, you need to start looking at your service and parts departments as true profit centers that can not only stand on their own, but also actually generate enough profit to cover all of your dealership’s fixed expenses. That’s service absorption! This means you have less dependency on new and used vehicle sales to make a net profit, which becomes a huge benefit during a soft market, high interest rates, expensive fuel, bad weather and a whole lot of other ills.

In far too many dealerships, the service and parts departments are simply there to provide support for the sale and delivery of new and used vehicles. Their secondary role is to take care of all the warranty repairs, and last of all, if time permits, they will write a retail work order for cash business. I’ve actually been in a service department that told customers that if they didn’t buy their vehicle from the dealership, they were low priority.

If this philosophy makes sense to you, then welcome to the dark ages! As you can imagine, this dealer was losing money in his service and parts department in numbers that would take your breath away. Would you want to be a service advisor or service manager in that store? It’s worth noting that the turnover in those two positions was quite high.

Why would you want to operate any department in your dealership at a loss to support another department? I believe it makes a lot more sense to operate every department as a standalone enterprise that works with the other departments to maximize overall performance and profits. It’s called return on investment.

Don Reed
CEO, Fixed Ops Solutions
DealerPro Training Solutions

Today is number 56. There are 309 days left in this year.

It’s the end of February. Are you happy with the results you achieved this month? Is your year on track to be better than last year? Are you concerned or content? Lets review 3 possible answers and see which one fits you.

For you the month of February in the Service Department was Great! You hit the Goals you set for HPRO, EFL and Profit Margins! Your CSI has never been better! Overall, you could not have done any more. Congrats! And, March looks like it is going to take off as well! Your overall strategy is to keep that ball rollin’ baby!

Ok, maybe your February was not as good. Maybe you got close to your Goals, HPRO was near the bar you set, and EFL was just a few dollars under what you felt you needed to get to and maybe your Margins were just under standards. Basically, you are not overly concerned, you felt you got everything you could and March is just around the corner and hey, you couldn’t possibly have two so so months in a row, right? It’s got to get better, doesn’t it?

Perhaps you are the Dealer with the worst month ever. Your HPRO is barely above the minimum you need to keep the doors open, your EFL and Profit Margins are just north of “this really sucks”, and your CSI is about as good as the last Customer who said “I wouldn’t come back here if this was the last place on earth.”

3 completely different results requiring 3 completely different Action Plans.

If you are Dealer number 1, your biggest challenge is finding a new set of Goals that are just out of reach for your Team to go after. Maybe you want to focus in HPRO and set a .2 increase as a new benchmark. Or, you want to increase CSI and are doing it by installing a new process to complete a write-up in the service drive. Whatever it is, you will need to make it harder to reach. “Maintaining Success is more difficult than achieving Success.”

If you are Dealer number 3, it’s all upside for you! Hey, you know you already need a change, Right! Personnel, attitude, training, processes…everything! It’s got to be changed because you cannot hit Profitability Goals and achieve the level of Success with what you have in place right now! Congratulations, this is an exciting and fantastic time to be in your Dealership!

But, if you are number 2, you are in a lot of trouble my friend. Why? Because I left one little “C” word out in the very beginning.

Complacency.

It’s the evil that all Leaders fear more than anything. When you become complacent, you start to die!

If your Management and Leadership strategy sounds like this “Oh, it was just a slow month, and the weather was terrible, and we had some people sick, and the Customers…oh man…the Customers were just mean, nobody wanted to buy anything. They just wanted oil changes. Yep, next month will be better. Don’t worry, because we are not changing anything! All we need to do is just hang on until things get better” then I want you to immediately take out a sheet of paper and write down 3 NEW GOALS for March.

Whatever your HPRO was for February, add .5 to it, whatever your EFL was for February, add $5.00 to it, whatever your Profit Margins for February add 5%.

YOU NEED A JOLT! AN ELECTRIC SHOCK STRAIGHT TO THE HEART OF YOUR DEALERSHIP!

As soon as you have them written down, make a copy for everyone in the Fixed Operations Department, hold a meeting, TODAY!, pass them out and tell them “Failure is not an option!”

Because if you don’t, at the end of March, you will be saying ““Oh, it was just a slow month, and the weather was terrible, and we had some people sick, and the Customers…oh man…the Customers were just mean, nobody wanted to buy anything. They just wanted oil changes. Yep, next month will be better. Don’t worry, because we are not changing anything! All we need to do is just hang on until things get better” and you will be on the road to an entire year of wasted opportunity!

By the way, just to let you know, we are experts here at DealerPro in delivering the shock to jump-start your Dealerships Fixed Operations.

Posted by Leonard Buchholz February 25, 2011

DealerPro Guarantees $200K in Added Service Gross Profits!

COLUMBUS, OH—Don Reed, CEO of DealerPro Training Solutions and an NADA Top 10 speaker since 2008, has announced an increased Service Gross Profit Guarantee for automobile dealers nationwide.

This applies for dealers who implement DealerPro’s In-Dealership Performance Driven Training program. This 13-month program installs new policies and processes guaranteed to increase customer pay hours per RO and CSI.

The results from this No-Risk program are so dramatic that DealerPro says a typical dealer will increase Service Gross Profits at least $200,000 within the program’s 13 months. Dozens of dealers have hit this mark and become proud members of the DealerPro $200K Club.

More important, dozens more dealers have exceeded the $200K mark, earning more than $300,000 … and $400,000 in additional Service Gross Profits. One dealer is currently on track to make more than $900,000 additional Service Gross Profits in his first 13 months on the program.

Because dealers are enjoying such tremendous success under the DealerPro Performance Driven Training program, Mr. Reed is providing a Performance Guarantee … and a Money-Back Guarantee as well. “We do the job, or we don’t get paid,” says Mr. Reed.

DealerPro trains Service Advisors to sell, and provides them with the tools for success. The result: 40% or better Increases in customer pay sales … Increased RO count, Increased sales per RO, more incoming calls converted into appointments … and more.

Mr. Reed has more than 20 years experience as a dealer and more than 10 years as a trainer. As a Twenty Group Advisor and consultant, he has helped hundreds of dealerships dramatically improve Service Gross Profits.

“The real growth in Service Gross Profits comes from monthly monitoring and refresher training built into the DealerPro process,” says Mr. Reed. “That’s how we can guarantee success.”

For more information visit www.dealerprotraining.com, call toll-free at 1-888-553-0100 or email Don Reed: dreed@dealerprotraining.com.

DealerPro Announces NADA Convention Seminar Schedule

Don Reed, CEO of DealerPro Training Solution is scheduled to present “Implementing The Four Essentials To Service Absorption” at the NADA Convention in February 2011.

There are four seminars to choose from.

Friday February 4th@1:30pm in Room 2018 West.

Saturday February 5th@1:00pm in Room 303 South Esplanade.

Sunday February 6th@11:00am Room 2016 West.

Monday February 7th@8:30am Room 2016 West.

Don has been a Top 1o NADA Convention Speaker since 2007. He recently completed a seminar schedule in England where he delivered workshops and seminars on The Four Essentials To Service Absorption to Dealer Principals and Service Managers.

You will leave with Action Steps you can take to start increasing your Service Absorption right away.

3 Ways Service Advisors Can Speed Up Service Sales

One of the most frustrating things that Service Advisors have to deal with is the unavailability of the Customer after they have left the Dealership.

In 100% of the cases there is a series of steps the Advisor can do during the writeup and repair process to increase the chances that they will be able to contact the Customer once the vehicle has been inspected or the repairs have been completed.

Step Number One.

Get a “Pre-Approval” amount. This is amazingly easier than what you would think it would be. Why? Because the Customer wants to have the vehicle repaired the same day as much as the Advisor does.

And the easiest way to do that is for the Customer to authorize an “up to” amount. This amount is typically a figure based on what the average RO dollar amount is for your Dealership.

And it is just as simple as asking the Customer. It might sound like this.

“Mr. Jones, I have here on the Repair Order to do an oil change, check the brakes for a grinding noise and diagnose the check engine light. If I can repair all of these items for less than $250.00 dollars, do you want me to go ahead and take care of it?”

This does not mean spend the $250.00. What it means is if the repairs can be handled for $250.00 or less then the Customer is authorizing you to complete those repairs and to call him (or her) if the repairs exceed $250.00 dollars.

Step Number 2

Have the Technician do a complete and thorough Inspection and report back to the Advisor before any other repairs are completed. This will ensure that the Advisor has a complete report to share with the Customer and advise them on any needed repairs before the vehicle comes off the rack.

Step Number 3

Verify the Customers Information.

Now you would think that this would be a “no brainer.”

And every day in a Dealership a Customer is being written up right now and the Advisor is not asking the Customer “Is the information listed here correct?” while pointing to the address and telephone number on the RO.

Or asking “What is the best way to reach you today?” and “Is there another number or email that I can use if I don’t have any success reaching you on the primary number?”

If you are a Service Advisor and you want to increase Service Sales, why would you not ask for a telephone number and email address? It makes no sense not to ask. Service Advisors are in the Communication Business and the first rule is “Know How To Contact Your Customer!”

These 3 Simple Steps will Speed Up your ability to contact your Customer and make more Service Sales.

The Hundred Mile An Hour Goat

Two friends are out hunting, and as they are walking along they come upon a huge hole in the ground. As they approach it they are amazed by the size of it.

The first hunter says “Wow, that’s some hole; I can’t even see the bottom. I wonder how deep it is.” The second hunter says” I don’t know, let’s throw something down and listen and see how long it takes to hit bottom.”
The first hunter looks around and spies an old automobile transmission lying in the grass. He tells the other hunter “Hey, there’s this old automobile transmission here. Give me a hand and we’ll throw it in and see”.

So they pick it up, carry it over and count “One, two, three!” and
throw it into the hole.

They are standing there listening and looking over the edge when they hear a rustling in the brush behind them. As they turn around they see a goat come crashing through the brush, run up to the hole and with no hesitation jump in head first!

They are totally shocked and suprised to say the least! While standing at the edge of the hole looking at each other and then looking into the hole trying to figure out what just happened, an old farmer walks up.

“Say there”, says the farmer, “you fellers didn’t happen to see my goat
around here anywhere, did you?”

The first hunter says ” Funny you should ask, but we were just standing here a minute ago and a goat came running out of the bushes doin’ about a hunert miles an hour and jumped headfirst into this hole here!”

The old farmer said “Why that’s impossible…… I had him chained to a
transmission!”

The moral of the story…don’t chain your 2011 Fixed Operations Gross Profit to anything that can be tossed into a deep hole. If your 2010 ended up like a goat chained to a transmission, now is the time to make a plan for 2011.

This is the time to measure what you accomplished or did not accomplish in 2010, what you want to improve in 2011 and plan how you are going to do it.

Goal setting is critical for achieving Success.

Here are 10 0f the most important areas to measure in Fixed Operations and their standards to help you set defined Goals for 2011.

■Labor Gross Profit Margins (75% is the correct number)
■Parts Gross Profit Margins (45% is the correct number)
■Parts to Labor Ratio (80% is the correct number)
■Multi-point Inspection Completion Rate (100% is the correct number)
■Additional Service Requests (30-40% of CP ROs is the correct number)
■ASR Closing Ratio (30-50% is the correct number)
■RO Count to Sold Units (6-1 Ratio is the correct number)
■Effective Labor Rate (90% of Door Rate is the correct number)
■Gross Profit Increase Year over Year (10% or more is the correct number)
■RO Count Increase (Yearly 10% or more is the correct number)
These are the bare minimum numbers for planning next years Goals. By planning now you are keeping yourself from “chaining your goat” to something that can be tossed at the first sign of trouble or adversity, which we all know happens when things are not going smoothly.

Goal Setting with everyone involved will prevent the possibility of 2011 being tossed into a deep hole before it even gets started.

“The Cheapest Oil Change In Town”

In every market and at every dealer there is the perception in Fixed Operations that cheap oil changes will add profit.



While it is true that cheap oil changes will bring Customers to your door, it is up to you to do something with them when they arrive.

Here are 3 Ways you can maximize the cheap oil change.

■Be “Over The Top” with your Customer Service. Be clean and neat, be accomodating, be prompt, be courteous and be Thankful. Think of the Customer as someone who is test driving your Dealership to see if they like the ride. Give them the best ride possible.
■Do a Complete and Thorough Inspection of the vehicle. Instead of a “27 Point” how about a “Driveability Check” or a “Winter Safety Check” or a “Brake, Light and Fluid Check” in addition to your usual 27 Point Inspection. The object is to give the Customer something that they were not expecting when they came in for “just an oil change.”
■Give them a Reason to Complete Service Work with You. Hey, you advertise, you plan for, you spend money and you lose money on the oil change and then…you don’t give your Customer a compelling reason to have service work completed at your Dealership? What are you thinking?
Making money in Fixed Operations is difficult when you don’t plan for the Oil Change Customer who might or might not be your Customer. It is impossible if you do not maximize the Cheap Oil Change Customers visit.

Passionate About Success in Service? Are You Using “Old Thinking” In New Times?

I was reading a post on another site when I read something I found quite profound. It was a comment by another gentleman.

He said ”If you are not passionate about what you do, if you do not believe in it with every fiber of your being, it will be reflected in your achievements.”

In my role as a Trainer, this is the single biggest reason I see people fail in this business as Service Advisors and Service Managers.

1st, they don’t want to be there. This is “just a job.” For many it is just the “means to pay the bills.” The amount of effort they put into the day is just enough to get them through it. Yet, when questioned, many people say “I need my job.”

Really? Lots of people need a job.

The truly successful Service Advisors see themselves not only as Advisors, they see themselves as Caretakers of the Customer. Not as Order Takers and Phone Answerers.

2nd, they don’t believe that what they do has real meaning. The Truth is, in our roles as Service Managers and Service Advisors, it can be a thankless and grinding task.

You are not going to rescue a child from a burning building or invent a cure for a life threatening disease.

However, if you are looking for something that involves working with people, thinking, commuication skils, sales, action management, technical knowhow, Customer Service knowledge and the ability to remain calm during stressful situations then you are going to love this position. It has all of that and more.

I like to think of the Service Advisor as more of a Traffic Controller than anything else. Just as important as the Air Traffic Controller is to the Tower, the Advisor is to the Dealership.

The average Advisor has more to do with the overall profitability of the Dealership than any other single person employed by the Dealership.

It is an important role and if you don’t have that mentality, then you should find another profession. And, once in awhile. there will be someone who recognizes your efforts and Thanks you. Sometime they bring donuts, sometimes they just look you in the eye, and say “Thanks for taking care of me.”

Lastly, Resistance To Change. Why is it in our business everyone thinks that once you are trained, nothing else need be done?

What single business on the planet remains static, frozen in process and procedure? What single busines on the planet has a constant supply of the Customers who are exactly the same as they were the year before? With all of the same buying habits, demographics and metrics? Not one that is still in business. Because every single business that thinks that way goes out of business.

Look around you. In the past 5 years, Dealerships have Decreased! and Aftermarket Competition has Increased!

Why are you using old thinking in new times?

Change is inevitable. Become a Change Agent. Read everyday about your Profession. Find and attend Training relevant to your areas of opportunity. Ask your Customer what is important to them. Become proactive and not reactive.

Service Absorption Rule #3

“Maintain a 6 to 1 ratio of C/P RO count to total vehicle sales” says Don Reed, CEO of DealerPro Training Solutions.

That sounds simple enough. If you are currently selling 100 New and Used a month, then that pencils out to 600 Customer Pay Repair Orders per Month, not including Warranty and Internal. It’s the CP RO count we are after.

So, you just realized that your RO count is low, right? What are you going to do about it? If you are thinking that you need a big production that costs a lot of money and the only thing that you can do is advertise to get more Customers in the door, think again.

Certainly advertising can be a part of the overall strategy to bring customers back in. “You don’t need to spend more money-you need to spend more of your money wisely” says Don. Which means that you need to look at reallocating some of what you already spend elsewhere (Sales) and give it to Service where you can realize a much better ROI.

“The average dealer is spending $500 to sell a new customer while spending $8.40 to keep the customers they have.”

And, if you do the math on a 500 RO (Customer Interaction) Service Drive and the typical 100 car store, you can expect to pay $50000.00 to get results that are somewhere north of say $145,000.00 in Gross Profit from the sale of those cars, or, you can spend $5000.00 in your Service Department ($10.00 per Customer) for a $153,000.00 Gross Profit return.

Thats 30 times over what you invested…vs a 2.9% ROI in Sales. 30 times! If I asked you to give me a $10.00 bill and I told you that in exchange for that $10.00 I would give you back $300.00, would you do it? Of course you would!

While advertising is part of the overall strategy and is part of your planning, it is another tool to be used in conjunction with everything else you do in Customer retention and marketing.

In fact, there are at least 20 different things that you can do right away (in the next few months) that will have an immediate impact on your RO count. Most of them require nothing more than a little elbow grease and awareness.

Send me an email at lbuchholz@dealerprotraining.com and put “Send me the 20″ in the subject line and I’ll send you back 20 ways you can increase RO count in your service department.

In the meantime, measure your current numbers using the 6/1 Rule and see where you stackup. If you are struggling, it might be time for a fresh look.

Getting to 100% Service Absorption is a decision. Decide to have better Absorption this year