Showing posts with label fixed operations. Show all posts
Showing posts with label fixed operations. Show all posts
Advisors like it Easy
http://www.dprsvcportal.com/portal/SupportCenter/EducationalArchive/tabid/827/Article/55/Advisors-Like-it-Easy.aspx
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
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?
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)
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?
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?
“An Enemy Called Average”
The title of this article comes from the book “An Enemy Called Average” by John Mason. The purpose of his book is to get you from where you are currently to where you dream to be. Mr. Mason says “Break the chains of mediocrity and then live the life you dream of.” This of course can apply in your personal life as well as your professional one.
Far too often in our industry we have Dealers, General Managers, Service Directors, etc. who focus on and measure themselves in terms of the “average” dealer. Here are some examples:
“The average dealer is grossing $700 PRU in F&I income”
“The average salesperson sells 11 units per month”
“The average Service Advisor sells 1.4 HPRO”
“The average CSI for my region is…..”
“The average …….for my 20 Group is ………”
Does this sound familiar to you?
Additionally your manufacturers also provide composites and reports showing the average this and the average that so you can compare yourself to what’s average.
Here‘s a simple exercise for you complete after reading my article. When you get up tomorrow morning ask your family to sit at the kitchen table for a brief family meeting before you go off to work and before the kids are off to school.
Stand up in front of your family and say the following: “It looks like it’s going to be an average day here in Hometown, U.S.A., and your average Dad and your average husband is going to his average job to put forth an average effort to maintain my average paycheck so I can support my average kids and my lovely average wife.
By the way kids, at school I want you to focus on getting average grades and you don’t really need to put forth the effort to be a great student so a “C” will be just fine.”
Does that work for you? How’s that average wife comment going to work out for you? Are you excited about holding that meeting?
If you are a manager how about you ask to meet with the Dealer and say the following: “Boss I just wanted to let you know that I think you are an average Dealer, so I’m going to give you an average effort today so I can produce for you some average results and manage my average department.” I bet nobody is taking notes on this one!
Let’s not forget what average really is. It is nothing more than a reference point.
Average means you are the “Worst of the Best or the Best of the Worst!”
Is that where you really want to be? I hope you answered NO WAY!
Well if that is true then why is it that when I speak to hundreds of dealers across our country I hear comments like “Well Don the average HPRO for my 20 Group is 1.4 and I’m averaging 1.5 so I’m doing a pretty good job.” No Sir-you are still hanging around with that “Best of the Worst crowd! Why do so many of you use the word average like it is a good place to be? Do you really want to be a straight “C” Dealer? Does the term mediocre Dealer appeal to you? I think not.
So how do you go from being average to becoming a Top Performer?
It all starts with one word-Commitment.
Are you committed to change? Are you committed to leaving your comfort zone? Are you committed to achieving different results? Think of it this way—when it comes to making “Bacon & Eggs” the chicken was a participant but the pig was totally committed.
If you, the Dealer, are not totally committed then nothing is going to happen differently. As Zig Ziglar says “You have the perfect processes in place to get you exactly what you got last year.” Get committed to change.
Next you must establish SMART goals. Specific-Measurable-Achievable-Realistic-Time based.
Here is an example: “I want to increase my retail HPRO by .5 over the next 6 months”
Specific: Yes it is—retail Ro’s only—increase .5 HPRO (Don’t forget to calculate how much specific gross profit you will produce on parts as well as labor with that extra .5 HPRO)
Measurable: Yes it is—your DMS can print a Service Advisor Performance Report DAILY showing the HPRO for each Advisor
Achievable: Not sure—what are my Advisors going to do differently to achieve different results? If they could sell the extra .5 HPRO why haven’t they already done so? Do they have a good menu to sell from? Do they have the proper communication skills and processes to make a feature benefit presentation to your customers? Are they willing to leave their comfort zones? Are they committed to change? (Chickens or Pigs?)
Realistic: Yes it is—since the average dealer is averaging 1.4 that means a lot of dealers are doing much better than 1.4 and since there is a multitude of dealers out there averaging 2.0 to 2.5 HPRO then another .5 is very realistic.
Time Based: Yes it is—you have 6 months to decide what you are going to do differently, what new processes will you implement, how will you train everyone on new skills that will increase their sales performance and provide the customer with a higher level of service?
Once you achieve your SMART goal then move on to the next one. Long term success is a journey not just a destination. That first SMART goal is just the first leg of your journey. Do not allow yourself to become complacent because you will gravitate back toward mediocrity.
John Mason in his book ”An Enemy Called Average” states: “Mediocrity is a region bound on the north by compromise, on the south by indecision, on the east by past thinking and on the west by a lack of vision.”
Every department in your dealership must be a profit center for the dealer who wants to thrive and not just survive in this very competitive industry of ours. The aftermarket service providers currently have over 80% of all the parts and service business in America. Don’t you think it’s time we started taking it back?
Don Reed-CEO
DealerPro Training Solutions
Far too often in our industry we have Dealers, General Managers, Service Directors, etc. who focus on and measure themselves in terms of the “average” dealer. Here are some examples:
“The average dealer is grossing $700 PRU in F&I income”
“The average salesperson sells 11 units per month”
“The average Service Advisor sells 1.4 HPRO”
“The average CSI for my region is…..”
“The average …….for my 20 Group is ………”
Does this sound familiar to you?
Additionally your manufacturers also provide composites and reports showing the average this and the average that so you can compare yourself to what’s average.
Here‘s a simple exercise for you complete after reading my article. When you get up tomorrow morning ask your family to sit at the kitchen table for a brief family meeting before you go off to work and before the kids are off to school.
Stand up in front of your family and say the following: “It looks like it’s going to be an average day here in Hometown, U.S.A., and your average Dad and your average husband is going to his average job to put forth an average effort to maintain my average paycheck so I can support my average kids and my lovely average wife.
By the way kids, at school I want you to focus on getting average grades and you don’t really need to put forth the effort to be a great student so a “C” will be just fine.”
Does that work for you? How’s that average wife comment going to work out for you? Are you excited about holding that meeting?
If you are a manager how about you ask to meet with the Dealer and say the following: “Boss I just wanted to let you know that I think you are an average Dealer, so I’m going to give you an average effort today so I can produce for you some average results and manage my average department.” I bet nobody is taking notes on this one!
Let’s not forget what average really is. It is nothing more than a reference point.
Average means you are the “Worst of the Best or the Best of the Worst!”
Is that where you really want to be? I hope you answered NO WAY!
Well if that is true then why is it that when I speak to hundreds of dealers across our country I hear comments like “Well Don the average HPRO for my 20 Group is 1.4 and I’m averaging 1.5 so I’m doing a pretty good job.” No Sir-you are still hanging around with that “Best of the Worst crowd! Why do so many of you use the word average like it is a good place to be? Do you really want to be a straight “C” Dealer? Does the term mediocre Dealer appeal to you? I think not.
So how do you go from being average to becoming a Top Performer?
It all starts with one word-Commitment.
Are you committed to change? Are you committed to leaving your comfort zone? Are you committed to achieving different results? Think of it this way—when it comes to making “Bacon & Eggs” the chicken was a participant but the pig was totally committed.
If you, the Dealer, are not totally committed then nothing is going to happen differently. As Zig Ziglar says “You have the perfect processes in place to get you exactly what you got last year.” Get committed to change.
Next you must establish SMART goals. Specific-Measurable-Achievable-Realistic-Time based.
Here is an example: “I want to increase my retail HPRO by .5 over the next 6 months”
Specific: Yes it is—retail Ro’s only—increase .5 HPRO (Don’t forget to calculate how much specific gross profit you will produce on parts as well as labor with that extra .5 HPRO)
Measurable: Yes it is—your DMS can print a Service Advisor Performance Report DAILY showing the HPRO for each Advisor
Achievable: Not sure—what are my Advisors going to do differently to achieve different results? If they could sell the extra .5 HPRO why haven’t they already done so? Do they have a good menu to sell from? Do they have the proper communication skills and processes to make a feature benefit presentation to your customers? Are they willing to leave their comfort zones? Are they committed to change? (Chickens or Pigs?)
Realistic: Yes it is—since the average dealer is averaging 1.4 that means a lot of dealers are doing much better than 1.4 and since there is a multitude of dealers out there averaging 2.0 to 2.5 HPRO then another .5 is very realistic.
Time Based: Yes it is—you have 6 months to decide what you are going to do differently, what new processes will you implement, how will you train everyone on new skills that will increase their sales performance and provide the customer with a higher level of service?
Once you achieve your SMART goal then move on to the next one. Long term success is a journey not just a destination. That first SMART goal is just the first leg of your journey. Do not allow yourself to become complacent because you will gravitate back toward mediocrity.
John Mason in his book ”An Enemy Called Average” states: “Mediocrity is a region bound on the north by compromise, on the south by indecision, on the east by past thinking and on the west by a lack of vision.”
Every department in your dealership must be a profit center for the dealer who wants to thrive and not just survive in this very competitive industry of ours. The aftermarket service providers currently have over 80% of all the parts and service business in America. Don’t you think it’s time we started taking it back?
Don Reed-CEO
DealerPro Training Solutions
Training Your Service Customers: Pays Big Dividends
If you are like most dealers, you are reading this article and scratching your head, wondering, “What the heck is this guy talking about training your service customers?” To begin with, I want you to come to grips with the concept that training can solve most any problem. Training can give you a higher return on your capital investment. Training can generate more bang for your working-capital buck. Training can reduce employee turnover. Training can improve closing ratios and increase owner retention. Training will generate more net profit. Think about it.
You just hired a new payroll clerk who has five years of payroll experience using ADP. However, your payroll system is on Reynolds and Reynolds. What do you do? You train the clerk to use your computer system, and, within a few days, your payroll process is back to normal. You just lost your top F&I producer and you have this successful salesperson who has always wanted to move into F&I, so you do the right thing and offer him the position. You know that in order for him to be successful in producing F&I income, he must have some training on how to become a top F&I producer. So, you send him to a professional F&I training class. Now, how about that service advisor you just hired from the competition down the street (big mistake), who is supposed to improve your falling CSI, stop your declining repair order count and increase sales? Obviously, achieving those worthy goals will require a lot of communication and sales skills. Clearly, you will also seek out a professional to train this new advisor, right? (I hope you said yes).
Now you’re starting to get the picture regarding training. This trained advisor can now go to work each day and focus on achieving the goals that you have given him/her, improve your falling CSI, stop your declining repair order count and increase sales. All three of these can be accomplished by this advisor simply training your customers. It all starts with the first oil change.
When I was a service advisor, way back in the 70s the manufacturers actually helped me train my customers. That’s right; every customer was given a maintenance booklet that resembled a checkbook, with coupons about the size of a check. The customer was required to complete all of the required maintenance items listed on each coupon. As an advisor, I would remove the coupon upon completion of the service, attach it to the hard copy of the RO and validate the coupon stub with my dealership stamp and date. Upon delivering the vehicle back to my customer, I would review what was required on the next coupon, explain when the next service would be due and tell the customer that these services were required by the manufacturer in order to maintain their manufacturer’s warranty. It worked like a charm.
My customers would walk up to me with their keys and maintenance booklet in hand and state something like, “Hi Don, I’m here for my 15,000-mile service.” When they came back to pick up their vehicle, I reviewed the 18,000-mile service. In those days, the required service intervals were every 3,000 miles for the life of the vehicle. I had very happy customers (CSI) because their vehicles were properly maintained. My repair order count continued to climb each month and, of course, so did our sales. So, why can’t we use this same process in today’s service departments? The answer is, we can. The question is, why aren’t we using this same process in service departments? Do you realize this kind of training is exactly what the aftermarket quick lube centers are doing with your customers?
Starting today, ask each of your advisors what maintenance is required by your respective manufacturer. I’m betting they don’t know. If that is the case, then require them to read the warranty book and they will find the words “required maintenance” inside. So, wouldn’t it be a novel idea to advise each and every customer, on each and every visit to your service department, of the maintenance requirements for their respective vehicle? If you did so and they agreed, do you think they would be driving a more reliable vehicle? The people who build the vehicles think so. If they have a more reliable vehicle, will your CSI improve? Yes. If your CSI improves, will your customers keep coming back? Most likely. If you advise them on what is required next and when it is due, will even more of them come back? Probably. If more customers return for more required maintenance, would it be a good idea to offer them recommendations for additional maintenance based on your local driving conditions and their individual driving habits? Absolutely.
Now, what are the benefits of following this simple process from the 70s? Your CSI improves, your repair order numbers increase and your sales go up, along with a nice steady supply of repeat customers for your sales department. With someone always saying, “Sell more cars,” isn’t it about time you get serious about service and start training your service customers?
---Don Reed
You just hired a new payroll clerk who has five years of payroll experience using ADP. However, your payroll system is on Reynolds and Reynolds. What do you do? You train the clerk to use your computer system, and, within a few days, your payroll process is back to normal. You just lost your top F&I producer and you have this successful salesperson who has always wanted to move into F&I, so you do the right thing and offer him the position. You know that in order for him to be successful in producing F&I income, he must have some training on how to become a top F&I producer. So, you send him to a professional F&I training class. Now, how about that service advisor you just hired from the competition down the street (big mistake), who is supposed to improve your falling CSI, stop your declining repair order count and increase sales? Obviously, achieving those worthy goals will require a lot of communication and sales skills. Clearly, you will also seek out a professional to train this new advisor, right? (I hope you said yes).
Now you’re starting to get the picture regarding training. This trained advisor can now go to work each day and focus on achieving the goals that you have given him/her, improve your falling CSI, stop your declining repair order count and increase sales. All three of these can be accomplished by this advisor simply training your customers. It all starts with the first oil change.
When I was a service advisor, way back in the 70s the manufacturers actually helped me train my customers. That’s right; every customer was given a maintenance booklet that resembled a checkbook, with coupons about the size of a check. The customer was required to complete all of the required maintenance items listed on each coupon. As an advisor, I would remove the coupon upon completion of the service, attach it to the hard copy of the RO and validate the coupon stub with my dealership stamp and date. Upon delivering the vehicle back to my customer, I would review what was required on the next coupon, explain when the next service would be due and tell the customer that these services were required by the manufacturer in order to maintain their manufacturer’s warranty. It worked like a charm.
My customers would walk up to me with their keys and maintenance booklet in hand and state something like, “Hi Don, I’m here for my 15,000-mile service.” When they came back to pick up their vehicle, I reviewed the 18,000-mile service. In those days, the required service intervals were every 3,000 miles for the life of the vehicle. I had very happy customers (CSI) because their vehicles were properly maintained. My repair order count continued to climb each month and, of course, so did our sales. So, why can’t we use this same process in today’s service departments? The answer is, we can. The question is, why aren’t we using this same process in service departments? Do you realize this kind of training is exactly what the aftermarket quick lube centers are doing with your customers?
Starting today, ask each of your advisors what maintenance is required by your respective manufacturer. I’m betting they don’t know. If that is the case, then require them to read the warranty book and they will find the words “required maintenance” inside. So, wouldn’t it be a novel idea to advise each and every customer, on each and every visit to your service department, of the maintenance requirements for their respective vehicle? If you did so and they agreed, do you think they would be driving a more reliable vehicle? The people who build the vehicles think so. If they have a more reliable vehicle, will your CSI improve? Yes. If your CSI improves, will your customers keep coming back? Most likely. If you advise them on what is required next and when it is due, will even more of them come back? Probably. If more customers return for more required maintenance, would it be a good idea to offer them recommendations for additional maintenance based on your local driving conditions and their individual driving habits? Absolutely.
Now, what are the benefits of following this simple process from the 70s? Your CSI improves, your repair order numbers increase and your sales go up, along with a nice steady supply of repeat customers for your sales department. With someone always saying, “Sell more cars,” isn’t it about time you get serious about service and start training your service customers?
---Don Reed
Not Taking Action Has Consequences
Previously, we had the privilege of addressing a room of Service Managers and Factory Personnel. And I have to believe that everyone in that room was there to find or gather some new information that would help them take action on something that might be causing them some problems at their Dealerships. Why would you attend if you had no hope of getting something, right? I hope that everyone one of them got something that they can use right away at their Dealership this week. And because I had a long drive home afterwards I started thinking about the consequences of not taking action.
In the Service Department the consequences really multiply quickly.
Lets take a look at John Q. Advisor.
John Q. is a underachiever at ABC Motors. His HPRO is at .9 and his Gross Profit Margin is below 70%. Now, John Q. is not necessarily a bad guy. In fact, he is a likeable and hard-working employee. He comes to work on time and believes he contributing to the overall success of the Service Department.
Johns current performance level is not acceptable. And the consequence of not taking action has verifiable results. Lets break down the numbers.
With his .9 HPRO at the national labor rate of $85.00 an hour, John is earning $76.50 in Gross Labor Sales per RO. Add in his Parts Gross Sales of $61.20 per RO (which is a 80% parts to labor ratio)and that adds up to a total of $137.70 per CP Repair Order written. John has been performing at this level for 3 months.
The national average is 1.5 HPRO. By accepting Johns performance it is costing the Dealership money.
How much money?
Using 1.5 HPRO as a benchmark, adding .6 at $85.00 equals $51.00 in Gross Labor Sales. Factor in the Parts Gross of $40.80 and each RO that John Q. writes is costing the Dealership $91.80 in LOST SALES! John writes an average of 220 CP ROs a month.
That is a $20,196.00 per month loss of income and over a 3 month period that adds up to $60,588.00!
I have to ask you, would you pay any Advisor $20,196.00 extra a month? $252,352 a year?
By not taking action, YOU ARE!
Everyday that John is not held Accountable for his performance there is a concrete and verifiable loss. Not only a monetary loss but a performance loss that affects the whole department as well.
Why?
Accepting Johns performance sends a message to everyone in the Dealership that there is a lack of accountability and that continued performance at this level is A-OK! In fact, John and every employee in the Service Department need not worry about their future…it is secure at ABC Motors.
You know what is worse?
John thinks that it’s ok. Should John go to another Dealership for whatever reason, he would soon find himself out of a job, again.
Why? Because Underachievers are not tolerated everywhere!
So not only has John Q. become a drain on the daily cash flow at ABC Motors, the Service Manager at ABC Motors is costing the Dealership money as well.
How is that possible and Why is it the Service Managers fault?
By not Taking Action, not providing Training and Coaching and not holding Jonh Q. accountable for his daily performance, the Service Manager is perpetuating Poor Performance and Condoning it!
Do you have a John Q. in your store?
Are you suffering the consequences of not taking action? What are you going to do about it!
In the Service Department the consequences really multiply quickly.
Lets take a look at John Q. Advisor.
John Q. is a underachiever at ABC Motors. His HPRO is at .9 and his Gross Profit Margin is below 70%. Now, John Q. is not necessarily a bad guy. In fact, he is a likeable and hard-working employee. He comes to work on time and believes he contributing to the overall success of the Service Department.
Johns current performance level is not acceptable. And the consequence of not taking action has verifiable results. Lets break down the numbers.
With his .9 HPRO at the national labor rate of $85.00 an hour, John is earning $76.50 in Gross Labor Sales per RO. Add in his Parts Gross Sales of $61.20 per RO (which is a 80% parts to labor ratio)and that adds up to a total of $137.70 per CP Repair Order written. John has been performing at this level for 3 months.
The national average is 1.5 HPRO. By accepting Johns performance it is costing the Dealership money.
How much money?
Using 1.5 HPRO as a benchmark, adding .6 at $85.00 equals $51.00 in Gross Labor Sales. Factor in the Parts Gross of $40.80 and each RO that John Q. writes is costing the Dealership $91.80 in LOST SALES! John writes an average of 220 CP ROs a month.
That is a $20,196.00 per month loss of income and over a 3 month period that adds up to $60,588.00!
I have to ask you, would you pay any Advisor $20,196.00 extra a month? $252,352 a year?
By not taking action, YOU ARE!
Everyday that John is not held Accountable for his performance there is a concrete and verifiable loss. Not only a monetary loss but a performance loss that affects the whole department as well.
Why?
Accepting Johns performance sends a message to everyone in the Dealership that there is a lack of accountability and that continued performance at this level is A-OK! In fact, John and every employee in the Service Department need not worry about their future…it is secure at ABC Motors.
You know what is worse?
John thinks that it’s ok. Should John go to another Dealership for whatever reason, he would soon find himself out of a job, again.
Why? Because Underachievers are not tolerated everywhere!
So not only has John Q. become a drain on the daily cash flow at ABC Motors, the Service Manager at ABC Motors is costing the Dealership money as well.
How is that possible and Why is it the Service Managers fault?
By not Taking Action, not providing Training and Coaching and not holding Jonh Q. accountable for his daily performance, the Service Manager is perpetuating Poor Performance and Condoning it!
Do you have a John Q. in your store?
Are you suffering the consequences of not taking action? What are you going to do about it!
Exceeding the Expectations
What would a Service Professional do?
A Professional understands their Customers Expectations.
Now this has got to be the easiest “no brainer” post you have read in years! You would think that every person who works in the Dealership has heard of Customer Service (here’s a little hint: WE ALL DO) and would take the time to understand their Customer expectations.
You would think.
And every day in the field at a Dealership there is a couple of moments where there is the “I have no idea” look on people’s faces when asked about what their Customer came in for, what was the reason for their visit, why are they here, how are we helping them, what’s the story etc....It's like a mystery novel.
The reason is they have become order takers. This new breed of Service Advisor has been trained by corporate America all of their lives with “instantology”, which is using the smallest amount of brain activity required to actually have meaningful interactions with their Customers.
This in turn has led us to a new term in Training called “you don’t need to know” in which Customers are regularly greeted and serviced by non-communicators who cannot distinguish between a request for service or a statement of concern unless it’s printed on the touch screen menu in front of them.
This collection of "Service (aacckkkk, cough cough) Professionals” are then left to founder and fumble with your Dealership Customers (you know, the "lifeblood of the Dealership, our main focus, why we are open"...etc...you've heard all of that before, right?) with more skills in “instantology” than in COMMUNICATION and CRITICAL THINKING!
This has reduced our once world renown model of Service Excellence we called the “American Way of Doing Business” to a misdirected application called "Someone told me to stand here and talk to you."
And because we choose to do business this way we find ourselves in constant need of reminding our Service "Professionals" what they are supposed to do and why they are supposed to do it.
In turn, this has increased our Customers chances of having to do business with someone who has little desire and are completely clueless how to deliver Exceptional Customer Service because it does not come with instructions on the box.
The true Professional Service Advisor not only knows what his or her Customers expectations are, they EXCEED them. They are anticipatory because they have taken the time to study their product and their Customer. And they truly understand Service. More importantly, they understand how the Customer could EXPECT to use their vehicle in their daily lives. Lastly, they understand their Customers EXPECTATIONS when they come in for Service.
How do they know these "magical things?"
The true Professional Service Advisor has taken the time to become an excellent COMMUNICATOR and only relies on “instantology” for storage and processing of the Customers information as a means of assistance and not as a means of conveyance.
Basically folks, you can’t get the computer to pull out its wallet no matter how hard you try.
When you have taken the time to really understand and anticipate your Customers Expectations by asking if they have been met one on one and by becoming a true Communicator through study and application will you become a True Service Professional.
Be Professional.
A Professional understands their Customers Expectations.
Now this has got to be the easiest “no brainer” post you have read in years! You would think that every person who works in the Dealership has heard of Customer Service (here’s a little hint: WE ALL DO) and would take the time to understand their Customer expectations.
You would think.
And every day in the field at a Dealership there is a couple of moments where there is the “I have no idea” look on people’s faces when asked about what their Customer came in for, what was the reason for their visit, why are they here, how are we helping them, what’s the story etc....It's like a mystery novel.
The reason is they have become order takers. This new breed of Service Advisor has been trained by corporate America all of their lives with “instantology”, which is using the smallest amount of brain activity required to actually have meaningful interactions with their Customers.
This in turn has led us to a new term in Training called “you don’t need to know” in which Customers are regularly greeted and serviced by non-communicators who cannot distinguish between a request for service or a statement of concern unless it’s printed on the touch screen menu in front of them.
This collection of "Service (aacckkkk, cough cough) Professionals” are then left to founder and fumble with your Dealership Customers (you know, the "lifeblood of the Dealership, our main focus, why we are open"...etc...you've heard all of that before, right?) with more skills in “instantology” than in COMMUNICATION and CRITICAL THINKING!
This has reduced our once world renown model of Service Excellence we called the “American Way of Doing Business” to a misdirected application called "Someone told me to stand here and talk to you."
And because we choose to do business this way we find ourselves in constant need of reminding our Service "Professionals" what they are supposed to do and why they are supposed to do it.
In turn, this has increased our Customers chances of having to do business with someone who has little desire and are completely clueless how to deliver Exceptional Customer Service because it does not come with instructions on the box.
The true Professional Service Advisor not only knows what his or her Customers expectations are, they EXCEED them. They are anticipatory because they have taken the time to study their product and their Customer. And they truly understand Service. More importantly, they understand how the Customer could EXPECT to use their vehicle in their daily lives. Lastly, they understand their Customers EXPECTATIONS when they come in for Service.
How do they know these "magical things?"
The true Professional Service Advisor has taken the time to become an excellent COMMUNICATOR and only relies on “instantology” for storage and processing of the Customers information as a means of assistance and not as a means of conveyance.
Basically folks, you can’t get the computer to pull out its wallet no matter how hard you try.
When you have taken the time to really understand and anticipate your Customers Expectations by asking if they have been met one on one and by becoming a true Communicator through study and application will you become a True Service Professional.
Be Professional.
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?
“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?
Use the "3T System" to make more money in Fixed Ops.
Making more Money in Fixed Operations is everyone's goal.
Think not?
Just go tell your Dealer Principal that this month you've decided that making money is not important... and see what happens to you, Mr. /Ms. Jobless.
Making money is much easier when you use a system to do it and it is much better than just wishing for more Money. Use the "3T System" to drive more dollars to the bank.
The first T stands for "Tell Everybody" what you want to accomplish this month. It is also called "Create a Compelling Vision" and the more Compelling it is, the more people are drawn to it.
Additionally, it must be specific, memorable and most importantly, reinforced at every opportunity!
It cannot be the same old tired "We need to do better or else!" stuff. They have already heard it before.
If it is, people will just ignore it. Start the month off with a kickoff meeting detailing exactly what it is you must accomplish, what role each person has and how you will be holding people accountable.
Remember, the more specific you are, the better your results!
The second T stands for "Teach me Something New." Everybody wants to be part of the newest, latest and greatest.
New is fun...New is exciting...New is way better than "old and stale." Let me give you an example.
When was the last time a you offered to make a sandwich for a guest in your home, and they said to you "Please make mine using old stale bread, month old lunchmeat and could you put some expired mayonnaise on it"?
Not gonna happen. It's the same way in the Service Department.
People want to feel like they are part of a new challenge and accomplishing new things. Don't make them a stale old sandwich and expect them to eat it.
Teach them something new about their job, the Customer, the Dealership...anything!
And the last T stands for "Train to Win!"
Bobby Jones said it best when he said "If you fail to get the proper instruction you'll only get better at making yourself worse." Train to Win means the best Training by the Best Method yields the Best Results!
Train your personnel using the Best Methods available (like DealerPro VT) and you will consistently improve and reach new Goals!
Think not?
Just go tell your Dealer Principal that this month you've decided that making money is not important... and see what happens to you, Mr. /Ms. Jobless.
Making money is much easier when you use a system to do it and it is much better than just wishing for more Money. Use the "3T System" to drive more dollars to the bank.
The first T stands for "Tell Everybody" what you want to accomplish this month. It is also called "Create a Compelling Vision" and the more Compelling it is, the more people are drawn to it.
Additionally, it must be specific, memorable and most importantly, reinforced at every opportunity!
It cannot be the same old tired "We need to do better or else!" stuff. They have already heard it before.
If it is, people will just ignore it. Start the month off with a kickoff meeting detailing exactly what it is you must accomplish, what role each person has and how you will be holding people accountable.
Remember, the more specific you are, the better your results!
The second T stands for "Teach me Something New." Everybody wants to be part of the newest, latest and greatest.
New is fun...New is exciting...New is way better than "old and stale." Let me give you an example.
When was the last time a you offered to make a sandwich for a guest in your home, and they said to you "Please make mine using old stale bread, month old lunchmeat and could you put some expired mayonnaise on it"?
Not gonna happen. It's the same way in the Service Department.
People want to feel like they are part of a new challenge and accomplishing new things. Don't make them a stale old sandwich and expect them to eat it.
Teach them something new about their job, the Customer, the Dealership...anything!
And the last T stands for "Train to Win!"
Bobby Jones said it best when he said "If you fail to get the proper instruction you'll only get better at making yourself worse." Train to Win means the best Training by the Best Method yields the Best Results!
Train your personnel using the Best Methods available (like DealerPro VT) and you will consistently improve and reach new Goals!
When Performance is Measured—It Improves
If you are a baseball fan like I am, you have most likely watched a game or two on TV or have gone to the ballpark to root for your favorite team (St. Louis Cardinals for me). In doing so, you have undoubtedly noticed the constant display of Player Statistics at the bottom of your TV screen or boldly displayed on the huge electronic scoreboard. For each batter who comes to the plate we see their Batting Average, RBI’s (Runs batted in), # of Home Runs, OBP (On base percentage), and for pitchers we see their ERA (Earned run average), number of games won versus lost, number of starts, how many innings pitched, etc. We even see the speed of every single pitch he makes displayed on the screen. Why? Maybe it’s because we as fans want to see and evaluate the performance of each player. Maybe it’s because the team’s coaches want to see and evaluate their individual player’s performance as well as that of the team. Maybe it’s because the opposing team’s coaches and players want to see and evaluate the other players’ performance. Or, just maybe it’s all of the above. When performance is measured it improves.
Top Performers are identified as such through constant, on-going performance evaluations. If you can’t evaluate their performance then how can you identify their status as a Top Performer? All of the players inducted into the Baseball Hall of Fame do not have the same stats. They are all different yet they all excelled in the sport of baseball and became the best players in the game. As a Dealer, General Manager or department manager you can learn a lot from this analogy because unless you have the stats on every individual on your team you cannot possibly evaluate their performance. You can’t identify their strengths or their weaknesses. You can’t measure improvement or failure accurately or fairly. You don’t know who needs training and what they need trained on. Now let’s take this concept of “you can’t manage what you don’t measure” and look at it from the perspective of “Front End” versus “Back End.”
The vast majority of Dealers have processes in place to measure the performance of their sales team every single day so they can evaluate their performance. Here are some typical examples:
Finance & Insurance Department:
• Gross Profit Per Retail Unit-New & Used
• Finance Penetration as a percent of total vehicle deliveries
• Extended Service Contract Penetration as a percent of total vehicle deliveries
• GAP Penetration as a percent of total vehicle deliveries
• Lease Penetration as a percent of total vehicles financed
• Number of contracts pending loan approval
• Total F&I Gross Profit produced Month to Date
This is typically measured for each Finance Producer as well as the entire F&I department and is done so DAILY so that you can effectively identify the Top Performers from the Underachievers and act accordingly.
New & Used Sales Departments:
• Gross Per Retail Unit-New & Used
• Number of units sold Month to Date
• Number of “UPS” Month to Date
• Number of Demos Month to Date
• Number of Written Proposals Month to Date
• Closing Ratio of UPS to Closed deals
• Number of Appointments for the day
• Number of T.O’s
• Conduct a lot walk to view inventory additions/deletions
• Number of Phone UPS Month to Date
• Wholesale Profit/Loss Month to Date
• Internet Sales Leads Month to Date
• Number of Internet Sales closed Month to Date
• Results from advertising campaigns
• Used Vehicle Reconditioning Cost PUVR
Most of these measurements are calculated for each Salesperson and each Manager for the same reasons as listed above for the Finance Producers and they are done DAILY. Most sales departments start their day with a brief Sales Meeting to review many of the items listed above. These are the typical 23 “Front End” processes that separate the average Dealer from the Top Performing Dealer. How would you rate your Sales Department?
Okay, now let’s cross over the demarcation line to the “Back End” of your dealership and take a look at the Service & Parts Departments and identify the typical processes for evaluating their performance DAILY. I emphasize DAILY not monthly.
Parts Department:
• Wholesale Parts Sales
• Counter Retail Sales
• Repair Order Sales
• Gross Profit Margin
• Lost Sales
• Fill Rate
My experience has been that far too many Dealers, GM’s and Parts Managers measure all of the above for the department but too often fail to do the same for each parts employee. For example do you run a DAILY Exception Report for each employee to identify the “Unauthorized Discounts?” Do you review a Performance Report DAILY by employee to identify their performance on parts margin—Wholesale, Retail Repair orders and Retail counter? Do you compare your performance to the benchmarks in our industry? Do you measure dollar sales per employee? Do you measure transactions per employee? Remember, if you only measure the performance of the department, you can’t effectively identify the Top Performers from the Underachievers. You can’t identify their individual strengths and weaknesses.
Service Department:
• Technician’s Flat Rate Hours Produced
• Technician’s Clock Hours Worked
• Hours per Repair Order by Advisor
• Number of Repair Orders Month to Date—Retail-Warranty-Internal by Advisor
• Number of Appointments Scheduled
• # of Carryovers
• Shop Productivity
Again, based on my experience and that of my 20 Trainers working in dealerships all across the country, we can’t find very many Dealers, GM’s, Service Directors/Managers and Parts Managers who measure anything else. Those who do measure more invariably will produce more. Measure things like their Advisors’ Unauthorized Parts & Labor Discounts, Policy Adjustment, Parts Margin, Labor Margin, # of Up-sells, Closing Ratio of Up-sells, Un-sold Hours per day, # of Menu Presentations, Closing Ratio on Menus, # of Inspection presentations, etc.
For Technicians let’s measure how many completed Inspections per day, # of additional repairs sold from inspections, # of comebacks, HPRO and the number of RO’s.
To sum it up, I see most dealers measuring about 23 stats per day in their Sales Departments and only about 13 stats per day in Service & Parts. If you follow my recommendations listed above that number jumps to about 30 stats per day and the good news is it costs you absolutely nothing! Now take a pen and check off all of the stats you measure DAILY in your Sales Department and then check off all of the ones you measure DAILY in your Service & Parts Departments. How did you score—Top Performer or Underachiever? It’s all in the stats!
Don Reed—CEO DealerPro Training Solutions
Top Performers are identified as such through constant, on-going performance evaluations. If you can’t evaluate their performance then how can you identify their status as a Top Performer? All of the players inducted into the Baseball Hall of Fame do not have the same stats. They are all different yet they all excelled in the sport of baseball and became the best players in the game. As a Dealer, General Manager or department manager you can learn a lot from this analogy because unless you have the stats on every individual on your team you cannot possibly evaluate their performance. You can’t identify their strengths or their weaknesses. You can’t measure improvement or failure accurately or fairly. You don’t know who needs training and what they need trained on. Now let’s take this concept of “you can’t manage what you don’t measure” and look at it from the perspective of “Front End” versus “Back End.”
The vast majority of Dealers have processes in place to measure the performance of their sales team every single day so they can evaluate their performance. Here are some typical examples:
Finance & Insurance Department:
• Gross Profit Per Retail Unit-New & Used
• Finance Penetration as a percent of total vehicle deliveries
• Extended Service Contract Penetration as a percent of total vehicle deliveries
• GAP Penetration as a percent of total vehicle deliveries
• Lease Penetration as a percent of total vehicles financed
• Number of contracts pending loan approval
• Total F&I Gross Profit produced Month to Date
This is typically measured for each Finance Producer as well as the entire F&I department and is done so DAILY so that you can effectively identify the Top Performers from the Underachievers and act accordingly.
New & Used Sales Departments:
• Gross Per Retail Unit-New & Used
• Number of units sold Month to Date
• Number of “UPS” Month to Date
• Number of Demos Month to Date
• Number of Written Proposals Month to Date
• Closing Ratio of UPS to Closed deals
• Number of Appointments for the day
• Number of T.O’s
• Conduct a lot walk to view inventory additions/deletions
• Number of Phone UPS Month to Date
• Wholesale Profit/Loss Month to Date
• Internet Sales Leads Month to Date
• Number of Internet Sales closed Month to Date
• Results from advertising campaigns
• Used Vehicle Reconditioning Cost PUVR
Most of these measurements are calculated for each Salesperson and each Manager for the same reasons as listed above for the Finance Producers and they are done DAILY. Most sales departments start their day with a brief Sales Meeting to review many of the items listed above. These are the typical 23 “Front End” processes that separate the average Dealer from the Top Performing Dealer. How would you rate your Sales Department?
Okay, now let’s cross over the demarcation line to the “Back End” of your dealership and take a look at the Service & Parts Departments and identify the typical processes for evaluating their performance DAILY. I emphasize DAILY not monthly.
Parts Department:
• Wholesale Parts Sales
• Counter Retail Sales
• Repair Order Sales
• Gross Profit Margin
• Lost Sales
• Fill Rate
My experience has been that far too many Dealers, GM’s and Parts Managers measure all of the above for the department but too often fail to do the same for each parts employee. For example do you run a DAILY Exception Report for each employee to identify the “Unauthorized Discounts?” Do you review a Performance Report DAILY by employee to identify their performance on parts margin—Wholesale, Retail Repair orders and Retail counter? Do you compare your performance to the benchmarks in our industry? Do you measure dollar sales per employee? Do you measure transactions per employee? Remember, if you only measure the performance of the department, you can’t effectively identify the Top Performers from the Underachievers. You can’t identify their individual strengths and weaknesses.
Service Department:
• Technician’s Flat Rate Hours Produced
• Technician’s Clock Hours Worked
• Hours per Repair Order by Advisor
• Number of Repair Orders Month to Date—Retail-Warranty-Internal by Advisor
• Number of Appointments Scheduled
• # of Carryovers
• Shop Productivity
Again, based on my experience and that of my 20 Trainers working in dealerships all across the country, we can’t find very many Dealers, GM’s, Service Directors/Managers and Parts Managers who measure anything else. Those who do measure more invariably will produce more. Measure things like their Advisors’ Unauthorized Parts & Labor Discounts, Policy Adjustment, Parts Margin, Labor Margin, # of Up-sells, Closing Ratio of Up-sells, Un-sold Hours per day, # of Menu Presentations, Closing Ratio on Menus, # of Inspection presentations, etc.
For Technicians let’s measure how many completed Inspections per day, # of additional repairs sold from inspections, # of comebacks, HPRO and the number of RO’s.
To sum it up, I see most dealers measuring about 23 stats per day in their Sales Departments and only about 13 stats per day in Service & Parts. If you follow my recommendations listed above that number jumps to about 30 stats per day and the good news is it costs you absolutely nothing! Now take a pen and check off all of the stats you measure DAILY in your Sales Department and then check off all of the ones you measure DAILY in your Service & Parts Departments. How did you score—Top Performer or Underachiever? It’s all in the stats!
Don Reed—CEO DealerPro Training Solutions
Hater or Creator?
It has been said that “the world is divided into haters and creators.”
As a Creator, we must embrace the role because we find ourselves besieged by Haters.
So, how do we become Creators?
Creators are people who decide which direction to go in and take the first step.
This is where the wheat is separated from the chaff. Creators are different than others. Creators are "first steppers." They use this first step as an act of ….Faith.
Faith in themselves and the tools they possess. This Faith comes from the belief that the actions they take will result in a desirable outcome.
Creators then mold and pull and add and push and turn and twist to keep moving forward no matter the circumstances.
A Creator in the act of creating rarely questions the material given to him or her.
No doubt, they seek the best material, but in the end, they still accomplish what they set out to do with what they have.
Creators are people who others want to follow. It's a natural instinct all people have. When someone is in the act of creating and there is Leadership, Pride and a Sense of Accomplishment, everyone wants to be close to the person who is responsible.
Who wouldn't?
Haters.
Haters question everything and everybody. They have little belief in themselves and thereby want to control an outcome by proxy.
They know that if anything anyone is trying to accomplish turns out bad, they can stand on one side, pointing their finger while saying "I told you so, I told you so."
Haters would rather tell you and everyone in earshot why it is dangerous to do anything new, when they tried something new something bad happened to them, how many times they had something bad happen to them, how many times they have seen others have something bad happen to them, etc...
They use this to create a feeling of control over themselves and others while never realizing that they gave up control when they decided to stand and watch instead of Create and Take Action.
Haters are out to prove themselves right and everybody else is wrong. They spend more time deciding how the world should run if they were in charge and yet take no charge of their world. Life is what happens to them.
There is not one spark of Creation anywhere.
So, at the end of it all, will you be remembered as a Creator or a Hater?
As a Creator, we must embrace the role because we find ourselves besieged by Haters.
So, how do we become Creators?
Creators are people who decide which direction to go in and take the first step.
This is where the wheat is separated from the chaff. Creators are different than others. Creators are "first steppers." They use this first step as an act of ….Faith.
Faith in themselves and the tools they possess. This Faith comes from the belief that the actions they take will result in a desirable outcome.
Creators then mold and pull and add and push and turn and twist to keep moving forward no matter the circumstances.
A Creator in the act of creating rarely questions the material given to him or her.
No doubt, they seek the best material, but in the end, they still accomplish what they set out to do with what they have.
Creators are people who others want to follow. It's a natural instinct all people have. When someone is in the act of creating and there is Leadership, Pride and a Sense of Accomplishment, everyone wants to be close to the person who is responsible.
Who wouldn't?
Haters.
Haters question everything and everybody. They have little belief in themselves and thereby want to control an outcome by proxy.
They know that if anything anyone is trying to accomplish turns out bad, they can stand on one side, pointing their finger while saying "I told you so, I told you so."
Haters would rather tell you and everyone in earshot why it is dangerous to do anything new, when they tried something new something bad happened to them, how many times they had something bad happen to them, how many times they have seen others have something bad happen to them, etc...
They use this to create a feeling of control over themselves and others while never realizing that they gave up control when they decided to stand and watch instead of Create and Take Action.
Haters are out to prove themselves right and everybody else is wrong. They spend more time deciding how the world should run if they were in charge and yet take no charge of their world. Life is what happens to them.
There is not one spark of Creation anywhere.
So, at the end of it all, will you be remembered as a Creator or a Hater?
Optimism Abounds in Fixed Operations
Over the past couple of months I’ve conducted several workshops for NADA and the Detroit Auto Dealers Association. In attendance were Dealers, GM’s and Service Directors and I was amazed at the level of optimism displayed by all. Dealers are selling more cars and trucks. Retail service traffic is increasing and net profits are improving. Great news for us all!
Many dealers tell me that the dealership closings in their markets have resulted in more customers coming into their dealerships for both sales and service. This of course is a positive trend but my concern is this: “What are you going to do with the additional service customers when they show up?” Have you prepared your service team for these new opportunities? Do you have a customer friendly appointment process, on-line, on the phone and in person? Do you have the proper selling processes in place to professionally engage your customers? Once you get these new customers do you have the right processes in place to keep them coming back?
In my last article for ADM I addressed the Five Rules of Engagement for service customers whereby I outlined how a dealer must hold their service team accountable for following the Rules as outlined below:
• Rule #1: Offer an Appointment to 100% of the incoming service calls
• Rule #2: Conduct a Vehicle Walk-around with the customer
• Rule #3: Present a Maintenance Menu at the time of write up
• Rule #4: Complete a Vehicle Health Check with every RO
• Rule #5: Conduct an Active Delivery of the vehicle back to the customer
Interestingly enough, J.D. Powers conducted a recent study of new car dealers’ service departments measuring a dealer’s performance in following Rules 2 thru 5 and Worldwide Phone Pops evaluated the dealers performance with Rule #1 after shopping over 9000 dealerships nationwide. Let’s review the results of each of these.
Starting with Rule #1, Worldwide Phone Pops states that 57% of all Service Advisors do not ask the customer for an appointment. Why would a dealer allow that to happen? Why would you not hold everyone accountable to offering 100% of your service customers an appointment? (My dentist does!) To make matters worse, Phone Pops states that 38% of operators keep customers on hold too long causing hang ups. So the question is are you going to let this happen to all of the new opportunities that we are all so excited about? Would it be acceptable for your salespeople to only offer 57% of your phone ups an appointment to come into your dealership to test drive a new or used vehicle? Do your phone ups stay on hold for prolonged periods of time waiting for a salesperson to speak to them?
The survey from J.D. Powers shows that Rule #2 did not fare much better since only 53% of the Service Advisors conducted a walkaround. My guess is this means that the remaining 47% of Advisors performed the function of a clerk preferring to stay at their work station waiting for the customer to come to them. When you install a walkaround process you will discover that your customers like it and your CSI will most likely go up along with your sales and gross profits.
The walkaround is a perfect lead in to a Maintenance Menu presentation, Rule #3. Survey shows that only 29% of Service Advisors made recommendations for other maintenance or repairs. Even more interesting is the fact that 46% of the customers said YES to have additional work performed on their vehicle at the time of write up. That sounds like a Closing Ratio of 46%! How would you like that closing ratio on extended service contracts in your finance department? What happens when the 29% becomes 100%? Most likely your menus sales will triple!
Rule #4 is what I call the Vehicle Health Check or multi-point inspection. It’s really like giving your customer’s vehicle a “physical check up” to insure they are in fact driving a safe and reliable vehicle. Survey shows when an Advisor calls a customer and reviews the results of the Vehicle Health Check and makes recommendations for additional repairs or maintenance services that a whopping 56% of them said “YES”. Now we have a 56% closing Ratio which in my book is a great job! Are your Technicians inspecting 100% of the vehicles in your service department every single day? Are your Service Advisors reviewing the results of the inspection with every customer?
The Active Delivery, Rule #5, is one of the most important processes for building owner retention and increasing CSI. This process is quite simple and costs you absolutely nothing: Always retrieve the vehicle and bring it to the customer—never send the customer to find their vehicle. J.D. Powers states that 23% of Advisors had their customer wait alone while their vehicle was retrieved and 5% of Advisors waited with the customer while the vehicle was retrieved and 16% of Advisors escorted the customer to their vehicle. So, let’s be generous and give the Advisors a combined compliance ratio of 44%. By now I’m sure you see where I’m going with this scenario-----56% of the customers were simply told where the vehicle was. When you deliver a new or used vehicle to a customer do you tell them where it’s parked and tell them to have nice day finding it? Again, this is a very simple process that costs you absolutely nothing. Why not make it a rule starting today!
Yes, optimism abounds in fixed operations and that optimism will turn in to record sales, record profits and record CSI scores for those dealers who choose to make the Five Rules of Engagement company policy and then holds their service team accountable for 100% compliance. You might hear a few moans and groans from your underachievers but remember—you are not running a Democracy here!
Don Reed
CEO-DealerPro Training Solutions
Many dealers tell me that the dealership closings in their markets have resulted in more customers coming into their dealerships for both sales and service. This of course is a positive trend but my concern is this: “What are you going to do with the additional service customers when they show up?” Have you prepared your service team for these new opportunities? Do you have a customer friendly appointment process, on-line, on the phone and in person? Do you have the proper selling processes in place to professionally engage your customers? Once you get these new customers do you have the right processes in place to keep them coming back?
In my last article for ADM I addressed the Five Rules of Engagement for service customers whereby I outlined how a dealer must hold their service team accountable for following the Rules as outlined below:
• Rule #1: Offer an Appointment to 100% of the incoming service calls
• Rule #2: Conduct a Vehicle Walk-around with the customer
• Rule #3: Present a Maintenance Menu at the time of write up
• Rule #4: Complete a Vehicle Health Check with every RO
• Rule #5: Conduct an Active Delivery of the vehicle back to the customer
Interestingly enough, J.D. Powers conducted a recent study of new car dealers’ service departments measuring a dealer’s performance in following Rules 2 thru 5 and Worldwide Phone Pops evaluated the dealers performance with Rule #1 after shopping over 9000 dealerships nationwide. Let’s review the results of each of these.
Starting with Rule #1, Worldwide Phone Pops states that 57% of all Service Advisors do not ask the customer for an appointment. Why would a dealer allow that to happen? Why would you not hold everyone accountable to offering 100% of your service customers an appointment? (My dentist does!) To make matters worse, Phone Pops states that 38% of operators keep customers on hold too long causing hang ups. So the question is are you going to let this happen to all of the new opportunities that we are all so excited about? Would it be acceptable for your salespeople to only offer 57% of your phone ups an appointment to come into your dealership to test drive a new or used vehicle? Do your phone ups stay on hold for prolonged periods of time waiting for a salesperson to speak to them?
The survey from J.D. Powers shows that Rule #2 did not fare much better since only 53% of the Service Advisors conducted a walkaround. My guess is this means that the remaining 47% of Advisors performed the function of a clerk preferring to stay at their work station waiting for the customer to come to them. When you install a walkaround process you will discover that your customers like it and your CSI will most likely go up along with your sales and gross profits.
The walkaround is a perfect lead in to a Maintenance Menu presentation, Rule #3. Survey shows that only 29% of Service Advisors made recommendations for other maintenance or repairs. Even more interesting is the fact that 46% of the customers said YES to have additional work performed on their vehicle at the time of write up. That sounds like a Closing Ratio of 46%! How would you like that closing ratio on extended service contracts in your finance department? What happens when the 29% becomes 100%? Most likely your menus sales will triple!
Rule #4 is what I call the Vehicle Health Check or multi-point inspection. It’s really like giving your customer’s vehicle a “physical check up” to insure they are in fact driving a safe and reliable vehicle. Survey shows when an Advisor calls a customer and reviews the results of the Vehicle Health Check and makes recommendations for additional repairs or maintenance services that a whopping 56% of them said “YES”. Now we have a 56% closing Ratio which in my book is a great job! Are your Technicians inspecting 100% of the vehicles in your service department every single day? Are your Service Advisors reviewing the results of the inspection with every customer?
The Active Delivery, Rule #5, is one of the most important processes for building owner retention and increasing CSI. This process is quite simple and costs you absolutely nothing: Always retrieve the vehicle and bring it to the customer—never send the customer to find their vehicle. J.D. Powers states that 23% of Advisors had their customer wait alone while their vehicle was retrieved and 5% of Advisors waited with the customer while the vehicle was retrieved and 16% of Advisors escorted the customer to their vehicle. So, let’s be generous and give the Advisors a combined compliance ratio of 44%. By now I’m sure you see where I’m going with this scenario-----56% of the customers were simply told where the vehicle was. When you deliver a new or used vehicle to a customer do you tell them where it’s parked and tell them to have nice day finding it? Again, this is a very simple process that costs you absolutely nothing. Why not make it a rule starting today!
Yes, optimism abounds in fixed operations and that optimism will turn in to record sales, record profits and record CSI scores for those dealers who choose to make the Five Rules of Engagement company policy and then holds their service team accountable for 100% compliance. You might hear a few moans and groans from your underachievers but remember—you are not running a Democracy here!
Don Reed
CEO-DealerPro Training Solutions
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.
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.
Business Development Centers Can Maximize Service Appointments
I recently reviewed some research findings from a Detroit 3 manufacturer that revealed a very disturbing statistic: “The average dealer has a drop rate of about 35% on incoming service calls.” This simply means the customer hangs up the phone without speaking to anyone. This is disturbing, particularly in light of the declining warranty and retail repair order counts we are experiencing in our industry today. As a dealer or general manager, would you allow 35 percent of your incoming sales calls to be dropped? What would happen to your service appointments if you could find a way to capture all of these lost calls?
Additionally, research shows that for every five incoming calls that are answered, one results in an appointment, one is calling on the status of their vehicle and three are calling for a price quote or availability. What would happen to your service appointments if you could convert just one of the three incoming calls for price and availability to an appointment?
How does this happen in so many dealerships across the country? It’s because most dealers send incoming service calls to their service advisors. Some dealers even have a direct phone line to the service advisors. Most of these calls are coming in during the morning hours, midday and late afternoon, which is exactly the same time the advisors are their busiest working with customers and technicians. These processes are not conducive to increasing appointments, increasing sales, improving CSI or building owner retention.
Here are a few situations to consider evaluating in your dealership:
•Your advisor is making a maintenance menu presentation to a customer and the phone rings. What do they do?
•Your advisor is on the phone with a customer and the phone rings. What do they do?
•Your advisor is reviewing a repair order with a technician or customer and the phone rings. What do they do?
•Do your advisors ever answer the phone, “Service, hold”?
•Does your receptionist ever complain about your advisors not answering their phone?
The correct answer to the first three is: never stop working with the customer in front of you to answer the phone. The answer to the last two is probably yes, which is exactly why 35 percent of the service calls are dropped. What can you do to change this?
One very effective way to correct this is to send all incoming service calls to a business development center (BDC). Properly trained BDC personnel can provide a multitude of services that will increase owner retention and CSI while enabling your advisors to become more productive, thereby increasing sales and shop productivity. Here are some examples:
•Answer all incoming calls eliminating the 35 percent dropped calls and increase appointments set.
•Convert one of the three customers who call for price and availability to an appointment.
•Call all lost service customers to invite them back for service
•Make CSI follow-up calls
•Contact all no-shows to reschedule their missed appointment
•Call customers for appointments to install special order parts
•Contact all customers with an appointment reminder
•Advise customers on recall campaigns
Now your advisors have the time available to focus on providing your customers the highest level of service they expect and deserve. Advisors tell me that the phone consumes more of their time than any other function they perform. With a BDC, you can greatly reduce the number of time-consuming incoming service calls going to your advisors, giving them the available time they need.
How much time do your advisors spend answering incoming service calls? Well, again the research shows that the average dealer will schedule one appointment for every five incoming service calls. Let’s assume your service department schedules 500 appointments per month (retail and warranty), or 24 per day. That equates to about 2,500 service phone calls per month or about 120 per day.
If you had two service advisors taking these calls, then each would handle approximately 60 service calls per day to schedule 12 appointments each. Assuming each call lasts for three minutes, each service advisor would spend three hours on the phone. With a 9-hour workday, that means your advisors are spending 33 percent of their day answering the phone. This does not include outgoing calls advising their customers on needed repairs or services, reviewing the repair order with their customer, getting authorization for extended service contract repairs or advising on completion times, all of which could easily add another three hours. Is a business development center starting to make sense?
If you don’t think you are quite ready for a BDC, then you might want to consider hiring appointment coordinators. Appointment coordinators will receive all incoming service calls and schedule service appointments. They can perform the exact same functions as the BDC would for the service department, except they only work for the service department. The benefits to the advisors and customers are still the same, and your sales and CSI will increase. Your increase in sales and CSI will far outweigh the costs of this position.
If you are of the opinion that you don’t need a BDC or appointment coordinators, then here is a simple exercise for you to complete as soon as you finish reading this magazine. Phone shop each of your advisors. Ask a friend, a relative or maybe someone in your office staff to do the phone shopping. Make a note of how many times the phone rings, whether the caller was put on hold at any time during the conversation, whether the advisor offered an appointment for a specific time for today or tomorrow, and if the advisor give his or her name and asked for the callers. Did the advisor exceed your expectations?
Don Reed
CEO, Fixed Ops Solutions
DealerPro Training Solutions
Additionally, research shows that for every five incoming calls that are answered, one results in an appointment, one is calling on the status of their vehicle and three are calling for a price quote or availability. What would happen to your service appointments if you could convert just one of the three incoming calls for price and availability to an appointment?
How does this happen in so many dealerships across the country? It’s because most dealers send incoming service calls to their service advisors. Some dealers even have a direct phone line to the service advisors. Most of these calls are coming in during the morning hours, midday and late afternoon, which is exactly the same time the advisors are their busiest working with customers and technicians. These processes are not conducive to increasing appointments, increasing sales, improving CSI or building owner retention.
Here are a few situations to consider evaluating in your dealership:
•Your advisor is making a maintenance menu presentation to a customer and the phone rings. What do they do?
•Your advisor is on the phone with a customer and the phone rings. What do they do?
•Your advisor is reviewing a repair order with a technician or customer and the phone rings. What do they do?
•Do your advisors ever answer the phone, “Service, hold”?
•Does your receptionist ever complain about your advisors not answering their phone?
The correct answer to the first three is: never stop working with the customer in front of you to answer the phone. The answer to the last two is probably yes, which is exactly why 35 percent of the service calls are dropped. What can you do to change this?
One very effective way to correct this is to send all incoming service calls to a business development center (BDC). Properly trained BDC personnel can provide a multitude of services that will increase owner retention and CSI while enabling your advisors to become more productive, thereby increasing sales and shop productivity. Here are some examples:
•Answer all incoming calls eliminating the 35 percent dropped calls and increase appointments set.
•Convert one of the three customers who call for price and availability to an appointment.
•Call all lost service customers to invite them back for service
•Make CSI follow-up calls
•Contact all no-shows to reschedule their missed appointment
•Call customers for appointments to install special order parts
•Contact all customers with an appointment reminder
•Advise customers on recall campaigns
Now your advisors have the time available to focus on providing your customers the highest level of service they expect and deserve. Advisors tell me that the phone consumes more of their time than any other function they perform. With a BDC, you can greatly reduce the number of time-consuming incoming service calls going to your advisors, giving them the available time they need.
How much time do your advisors spend answering incoming service calls? Well, again the research shows that the average dealer will schedule one appointment for every five incoming service calls. Let’s assume your service department schedules 500 appointments per month (retail and warranty), or 24 per day. That equates to about 2,500 service phone calls per month or about 120 per day.
If you had two service advisors taking these calls, then each would handle approximately 60 service calls per day to schedule 12 appointments each. Assuming each call lasts for three minutes, each service advisor would spend three hours on the phone. With a 9-hour workday, that means your advisors are spending 33 percent of their day answering the phone. This does not include outgoing calls advising their customers on needed repairs or services, reviewing the repair order with their customer, getting authorization for extended service contract repairs or advising on completion times, all of which could easily add another three hours. Is a business development center starting to make sense?
If you don’t think you are quite ready for a BDC, then you might want to consider hiring appointment coordinators. Appointment coordinators will receive all incoming service calls and schedule service appointments. They can perform the exact same functions as the BDC would for the service department, except they only work for the service department. The benefits to the advisors and customers are still the same, and your sales and CSI will increase. Your increase in sales and CSI will far outweigh the costs of this position.
If you are of the opinion that you don’t need a BDC or appointment coordinators, then here is a simple exercise for you to complete as soon as you finish reading this magazine. Phone shop each of your advisors. Ask a friend, a relative or maybe someone in your office staff to do the phone shopping. Make a note of how many times the phone rings, whether the caller was put on hold at any time during the conversation, whether the advisor offered an appointment for a specific time for today or tomorrow, and if the advisor give his or her name and asked for the callers. Did the advisor exceed your expectations?
Don Reed
CEO, Fixed Ops Solutions
DealerPro Training Solutions
Menus Can Make a Difference
Most dealers today understand the value of an F&I department, and history shows that this department can be a significant profit center when the right processes are implemented, enabling managers to sell additional products and services to every customer who takes delivery of a new or used vehicle. One of those processes is menu selling.
These menus are designed to offer the customer choices for protecting their vehicle, credit, payment, etc. Most menus will give the customer the opportunity to choose from three or four different options such as Platinum, Gold, Silver or Bronze coverage. We know that if the customer chooses any one of these options, it results in an automatic upsell, which of course means more gross profit in the car deal.
Additionally, the finance producer is usually required to present these menus to 100 percent of your customers with no exceptions! This process breeds consistency and ensures that every customer is treated the same, meaning that each and every customer receives a feature/benefit presentation on all of the products contained in the menu. Starting today, why don’t you install this same process in your service department?
Menus can be just as effective in your service department. Here are five steps to properly implement maintenance menus:
1. Create your own menu
2. Train service advisors how to make a feature/benefit presentation
3. Require this process to be followed with every customer on every visit
4. Measure menu sales for each service advisor
5. Hold managers and advisors accountable for performance
Designing a maintenance menu can be very time consuming if you do it right, but I can assure you the time will be well spent. You can choose to design a paper menu or you might prefer an electronic one. Technology is a wonderful thing when it’s used properly. I prefer the electronic menus, which require nothing more than Internet service.
Electronic menus cost less, allow for more pricing flexibility, are easy to use, offer 100-percent accountability tracking for advisors, are customer-friendly and are available 24/7 for your customers. Research shows that online menus partnered with an online appointment process will generate about 20 percent more in sales per repair order than those written by your advisors. Do the math in your store and you’ll probably see an opportunity to add at least $50 per repair order. The fact is, online customers will go to your online menu and “sell themselves” because 100 percent of the customers are presented the menu when they log in.
All maintenance menus should start with the manufacturer’s requirements and recommendations based on months in service and/or mileage. From there, you must add services for local driving conditions as well as the customer’s own driving habits. For example, the driving conditions in Mesa, Ariz., are not the same as those in Bangor, Maine, and a truck owner towing boats does not have the same driving habits as one hauling a horse trailer in the mountains.
Training your advisors on how to make a feature/benefit presentation starts with taking a plain sheet of paper and drawing a line down the middle of the page. On the left, you should list all of the features outlined in your menu. On the right, list the corresponding benefits of each feature, which are the reasons a customer will say yes to a menu presentation. Remember, your advisors must understand that customers only buy benefits; they don’t buy features. An example would be a tire rotation. Nobody wants to buy a tire rotation (a feature), but they do want to have longer-lasting tires to save money (a benefit). Electronic menus also have full-color video feature/benefit presentations that enable the customer to actually see the benefits as well as hear about them.
Now, you must require every advisor to follow this process every day with each customer they greet, both warranty and customer-pay. This is not an option for your finance producers, and it should not be an option for your service advisors. You will never get 50 percent service contract penetration in F&I by offering contracts to only those customers who might buy them, right? It’s no different in service.
You can’t manage what you don’t measure, so it’s imperative that you keep a record of each advisor’s sales performance. I’m talking about sales per RO, hours per RO, profit margins on parts and labor, effective labor rate, closing ratio on menu sales, and closing ratio on inspection upsells. You’re most likely measuring every measurable statistic in your sales and F&I departments every day, so start doing the same for your service and parts departments. Then, you will have complete accountability for their individual performance.
These five steps outlined in this article will boost your bottom line starting with day one. Your customers will become trained on how to pay attention to preventative maintenance, which will give them a much more pleasurable ownership experience and save them money over time. If you doubt me, just go visit any aftermarket service facility and observe their processes since they now own 84 percent of the parts and service business in America.
Don Reed, CEO DealerPro Training Solutions
These menus are designed to offer the customer choices for protecting their vehicle, credit, payment, etc. Most menus will give the customer the opportunity to choose from three or four different options such as Platinum, Gold, Silver or Bronze coverage. We know that if the customer chooses any one of these options, it results in an automatic upsell, which of course means more gross profit in the car deal.
Additionally, the finance producer is usually required to present these menus to 100 percent of your customers with no exceptions! This process breeds consistency and ensures that every customer is treated the same, meaning that each and every customer receives a feature/benefit presentation on all of the products contained in the menu. Starting today, why don’t you install this same process in your service department?
Menus can be just as effective in your service department. Here are five steps to properly implement maintenance menus:
1. Create your own menu
2. Train service advisors how to make a feature/benefit presentation
3. Require this process to be followed with every customer on every visit
4. Measure menu sales for each service advisor
5. Hold managers and advisors accountable for performance
Designing a maintenance menu can be very time consuming if you do it right, but I can assure you the time will be well spent. You can choose to design a paper menu or you might prefer an electronic one. Technology is a wonderful thing when it’s used properly. I prefer the electronic menus, which require nothing more than Internet service.
Electronic menus cost less, allow for more pricing flexibility, are easy to use, offer 100-percent accountability tracking for advisors, are customer-friendly and are available 24/7 for your customers. Research shows that online menus partnered with an online appointment process will generate about 20 percent more in sales per repair order than those written by your advisors. Do the math in your store and you’ll probably see an opportunity to add at least $50 per repair order. The fact is, online customers will go to your online menu and “sell themselves” because 100 percent of the customers are presented the menu when they log in.
All maintenance menus should start with the manufacturer’s requirements and recommendations based on months in service and/or mileage. From there, you must add services for local driving conditions as well as the customer’s own driving habits. For example, the driving conditions in Mesa, Ariz., are not the same as those in Bangor, Maine, and a truck owner towing boats does not have the same driving habits as one hauling a horse trailer in the mountains.
Training your advisors on how to make a feature/benefit presentation starts with taking a plain sheet of paper and drawing a line down the middle of the page. On the left, you should list all of the features outlined in your menu. On the right, list the corresponding benefits of each feature, which are the reasons a customer will say yes to a menu presentation. Remember, your advisors must understand that customers only buy benefits; they don’t buy features. An example would be a tire rotation. Nobody wants to buy a tire rotation (a feature), but they do want to have longer-lasting tires to save money (a benefit). Electronic menus also have full-color video feature/benefit presentations that enable the customer to actually see the benefits as well as hear about them.
Now, you must require every advisor to follow this process every day with each customer they greet, both warranty and customer-pay. This is not an option for your finance producers, and it should not be an option for your service advisors. You will never get 50 percent service contract penetration in F&I by offering contracts to only those customers who might buy them, right? It’s no different in service.
You can’t manage what you don’t measure, so it’s imperative that you keep a record of each advisor’s sales performance. I’m talking about sales per RO, hours per RO, profit margins on parts and labor, effective labor rate, closing ratio on menu sales, and closing ratio on inspection upsells. You’re most likely measuring every measurable statistic in your sales and F&I departments every day, so start doing the same for your service and parts departments. Then, you will have complete accountability for their individual performance.
These five steps outlined in this article will boost your bottom line starting with day one. Your customers will become trained on how to pay attention to preventative maintenance, which will give them a much more pleasurable ownership experience and save them money over time. If you doubt me, just go visit any aftermarket service facility and observe their processes since they now own 84 percent of the parts and service business in America.
Don Reed, CEO DealerPro Training Solutions
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 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.
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.
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.
Customers and Communications…Are You Missing Sales?
The number one area that your Customers would like you to improve in is… Communicating with your Customers.
Most of you reading this would say “We do communicate with our Customers all the time! We call them; we send them emails…why we even have a monthly newsletter that we send out. What more could they possibly want?”
Maybe…just maybe…they might want you to communicate with them the way they like to be communicated with…whaddya think?
Have you asked your Customers this question…”Mr./Ms. Customer, which way would you like me to communicate with you? Do you we contact you by cell phone? Do you prefer we text you? Would you prefer we send you an email? Or is there another form of communication that you would like for us to use?”
Once you have the answer to that question, you need to have people who are Trained to Communicate! And by training your personnel to Communicate they will become better at the one thing that they must be the BEST at in a Dealership…SALES!
“If you are willing to commit to training your entire Fixed Operations team how to effectively communicate with every customer on every phone call and at every visit you are well on your way toward creating a culture of salesmanship within your entire organization.” says Don Reed, CEO of DealerPro Training Solutions.
And that Culture is what is required to be successful and competitive in today’s Dealership.
You must have people who can effectively Communicate and that means you need to do 3 things.
1.Train everyone in Sales, Service and Parts how to answer the phone. It is a skill set like any other. There is a script or word track for just about every conceivable situation. Once they learn the script and begin to use it, it begins to sound natural and they gain confidence. There is nothing worse for a Customer and a Dealership than to have your Customer phone in and get someone who has absolutely no idea how to answer the phone or what to do. It sets the wrong tone and establishes the idea in the Customers mind that they may have made a mistake in choosing you to do business with. And that Customer will remember that experience for a long time. Think they don’t? Have you ever had a Customer start off a conversation with “One time I called here and _______ happened.”?
2.Train your Service Advisors to ask every Service Customer the following. “Mr. /Ms. Customer, what is the best way for us to contact you today?” when they drop it off for Service. The follow up question is “In case I’m having some difficulty getting in contact with you, is there another way or another person I can get in touch with?” These two questions will boost Sales in Service. Why? How many times have your Service Advisors set an RO aside for hours at a time because they could not reach the Customer? And when they finally did get them, it was too late in the day, there were other issues, the Technician was busy doing other work…blah, blah, blah. That leads to a Lost Sale and that leads to Lost Gross.
3.Train your Service Advisors to be investigatory. Investigatory means simply being inquisitive and asking questions. What kind of questions do you ask? Anything that leads to the discovery of more information. Questions in the service drive sound like “Have you had your tires rotated?”…”When was the last time you had ________?”…”Have you noticed any leaks? What color was the fluid?” These questions and others like them, will get you more action items on your Repair Order. At the writeup area you can ask other questions like “I noticed that the last time in we recommended ______ and I don’t see where we have taken care of that yet…is that right?”…These examples of investigatory questions help the Customer get the Best Service Experience and make the Service Advisor more proactive which leads to more Sales. This is the beginning of developing a culture of Salesmanship.
And that leads to a culture of Success.
Communication with the Customer is the key to Service Department Profitability. Training every Service Advisor in phone skills, how to contact the Customer and becoming an Investigator will pave the way on the Road to Success.
Send an email to rheywood@dealerprotraining.com or call 888-553-0100 and find out what your Dealership is capable of with a Profit Potential Analysis. You don’t know until you look.
Most of you reading this would say “We do communicate with our Customers all the time! We call them; we send them emails…why we even have a monthly newsletter that we send out. What more could they possibly want?”
Maybe…just maybe…they might want you to communicate with them the way they like to be communicated with…whaddya think?
Have you asked your Customers this question…”Mr./Ms. Customer, which way would you like me to communicate with you? Do you we contact you by cell phone? Do you prefer we text you? Would you prefer we send you an email? Or is there another form of communication that you would like for us to use?”
Once you have the answer to that question, you need to have people who are Trained to Communicate! And by training your personnel to Communicate they will become better at the one thing that they must be the BEST at in a Dealership…SALES!
“If you are willing to commit to training your entire Fixed Operations team how to effectively communicate with every customer on every phone call and at every visit you are well on your way toward creating a culture of salesmanship within your entire organization.” says Don Reed, CEO of DealerPro Training Solutions.
And that Culture is what is required to be successful and competitive in today’s Dealership.
You must have people who can effectively Communicate and that means you need to do 3 things.
1.Train everyone in Sales, Service and Parts how to answer the phone. It is a skill set like any other. There is a script or word track for just about every conceivable situation. Once they learn the script and begin to use it, it begins to sound natural and they gain confidence. There is nothing worse for a Customer and a Dealership than to have your Customer phone in and get someone who has absolutely no idea how to answer the phone or what to do. It sets the wrong tone and establishes the idea in the Customers mind that they may have made a mistake in choosing you to do business with. And that Customer will remember that experience for a long time. Think they don’t? Have you ever had a Customer start off a conversation with “One time I called here and _______ happened.”?
2.Train your Service Advisors to ask every Service Customer the following. “Mr. /Ms. Customer, what is the best way for us to contact you today?” when they drop it off for Service. The follow up question is “In case I’m having some difficulty getting in contact with you, is there another way or another person I can get in touch with?” These two questions will boost Sales in Service. Why? How many times have your Service Advisors set an RO aside for hours at a time because they could not reach the Customer? And when they finally did get them, it was too late in the day, there were other issues, the Technician was busy doing other work…blah, blah, blah. That leads to a Lost Sale and that leads to Lost Gross.
3.Train your Service Advisors to be investigatory. Investigatory means simply being inquisitive and asking questions. What kind of questions do you ask? Anything that leads to the discovery of more information. Questions in the service drive sound like “Have you had your tires rotated?”…”When was the last time you had ________?”…”Have you noticed any leaks? What color was the fluid?” These questions and others like them, will get you more action items on your Repair Order. At the writeup area you can ask other questions like “I noticed that the last time in we recommended ______ and I don’t see where we have taken care of that yet…is that right?”…These examples of investigatory questions help the Customer get the Best Service Experience and make the Service Advisor more proactive which leads to more Sales. This is the beginning of developing a culture of Salesmanship.
And that leads to a culture of Success.
Communication with the Customer is the key to Service Department Profitability. Training every Service Advisor in phone skills, how to contact the Customer and becoming an Investigator will pave the way on the Road to Success.
Send an email to rheywood@dealerprotraining.com or call 888-553-0100 and find out what your Dealership is capable of with a Profit Potential Analysis. You don’t know until you look.
Not Taking Action Has Consequences
Yesterday I had the privilege of addressing a room of Service Managers and Factory Personnel. And I have to believe that everyone in that room was there to find or gather some new information that would help them take action on something that might be causing them some problems at their Dealerships.
Why would you attend if you had no hope of getting something, right? I hope that everyone one of them got something that they can use right away at their Dealership this week, something they can take action on.
And because I had a long drive home afterwards I started thinking about the consequences of not taking action.
In the Service Department the consequences really multiply quickly.
Lets take a look at John Q. Advisor.
John Q. is a underachiever at ABC Motors. His HPRO is at .9 and his Gross Profit Margin is below 70%. Now, John Q. is not necessarily a bad guy. In fact, he is a likeable and hard-working employee. He comes to work on time and believes he contributing to the overall success of the Service Department.
Johns current performance level is not acceptable. And the consequence of not taking action has verifiable results. Take a look at Johns numbers.
His current HPRO at .9 at the national labor rate of $85.00 an hour equals $76.50 in Gross Labor Sales. His Parts Gross Sales are $61.20 at a 80% parts to labor ratio which adds up to a total of $137.70 per CP Repair Order written. John has been performing at this level for 3 months.
The national average HPRO is 1.5 and by accepting Johns performance it is costing the Dealership money.
How much money?
Adding .6 at $85.00 equals $51.00 in Gross Labor Sales. Factor in the Parts Gross of $40.80 and each RO that John Q. writes is costing the Dealership $91.80 in LOST SALES! John writes an average of 220 CP ROs a month.
That is $20,196.00 per month and over a 3 month period that adds up to $60,588.00! I have to ask you, would you pay any Advisor $20,196.00 extra a month? $252,352 a year?
By not taking action, YOU ARE!
Everyday that John is not Trained and not held Accountable for his performance there is a concrete and verifiable loss. Not only a monetary loss but a performance loss that affects the whole department as well.
Why?
Accepting Johns results sends a message to everyone in the Dealership that a lack of performance is ok and that continued performance at this level is not a concern that needs to be taken care of. In fact John and every employee in the Service Department need not worry about the future. It is secure at ABC Motors.
You know what is worse? John thinks that it’s ok. Should John go to another Dealership for whatever reason, he would soon find himself out of a job, again. Why? Because Underachievers are not tolerated everywhere!
So not only is the Service Manager at ABC Motors costing the Dealership money by not Taking Action, by not Training John, by not holding John Accountable, the Service Manager is perpetuating Poor Performance and Condoning it!
Do you have a John Q. in your store?
Are you suffering the consequences of not taking action? What are you going to do about it!
Why would you attend if you had no hope of getting something, right? I hope that everyone one of them got something that they can use right away at their Dealership this week, something they can take action on.
And because I had a long drive home afterwards I started thinking about the consequences of not taking action.
In the Service Department the consequences really multiply quickly.
Lets take a look at John Q. Advisor.
John Q. is a underachiever at ABC Motors. His HPRO is at .9 and his Gross Profit Margin is below 70%. Now, John Q. is not necessarily a bad guy. In fact, he is a likeable and hard-working employee. He comes to work on time and believes he contributing to the overall success of the Service Department.
Johns current performance level is not acceptable. And the consequence of not taking action has verifiable results. Take a look at Johns numbers.
His current HPRO at .9 at the national labor rate of $85.00 an hour equals $76.50 in Gross Labor Sales. His Parts Gross Sales are $61.20 at a 80% parts to labor ratio which adds up to a total of $137.70 per CP Repair Order written. John has been performing at this level for 3 months.
The national average HPRO is 1.5 and by accepting Johns performance it is costing the Dealership money.
How much money?
Adding .6 at $85.00 equals $51.00 in Gross Labor Sales. Factor in the Parts Gross of $40.80 and each RO that John Q. writes is costing the Dealership $91.80 in LOST SALES! John writes an average of 220 CP ROs a month.
That is $20,196.00 per month and over a 3 month period that adds up to $60,588.00! I have to ask you, would you pay any Advisor $20,196.00 extra a month? $252,352 a year?
By not taking action, YOU ARE!
Everyday that John is not Trained and not held Accountable for his performance there is a concrete and verifiable loss. Not only a monetary loss but a performance loss that affects the whole department as well.
Why?
Accepting Johns results sends a message to everyone in the Dealership that a lack of performance is ok and that continued performance at this level is not a concern that needs to be taken care of. In fact John and every employee in the Service Department need not worry about the future. It is secure at ABC Motors.
You know what is worse? John thinks that it’s ok. Should John go to another Dealership for whatever reason, he would soon find himself out of a job, again. Why? Because Underachievers are not tolerated everywhere!
So not only is the Service Manager at ABC Motors costing the Dealership money by not Taking Action, by not Training John, by not holding John Accountable, the Service Manager is perpetuating Poor Performance and Condoning it!
Do you have a John Q. in your store?
Are you suffering the consequences of not taking action? What are you going to do about it!
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