R this and R that

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

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

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

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

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

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

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

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

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

follow-up?

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

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

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

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

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

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

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

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

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

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

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

One word every Service Department needs.

What would be the one word to describe what a Service Department needs these days to compete?

There are so many to choose from. However, the one word that keeps coming up when I visit Dealerships across the country is adaptability.

The Dealerships that are doing well, adapt to changing market conditions and Customer demands.

Even if this is your first day in a Dealership, you know that the ability to adapt is the key to Exceeding Expectations.

The dictionary tells us that it means to “adjust to new circumstances.” Boy, if that is not the definition or guiding principle of the Service Department these days, I don’t know what is.

If you think about it, the Service Department is the only “gray” area in the Dealership. Everything else is black and white.

We have the part in stock or we don’t. We have the car on the lot or we don't. We can fund you or we can't. We are open extended hours or we are not.

In the Service Department, they don’t have those hard and fast rules because Customers and the situations that Service Advisors deal with are seldom written in stone. It’s more like an “etchasketch.”

This requires a person that is adaptable, flexible and understanding with the backing of an organization that is adaptable, flexible and understanding. Having either without the other won’t work.

And if you have Service Advisors who do not understand this concept or cannot adapt to a Customers Expectations, you will have problems.

When you have staff that are rigid and inflexible, you end up with Customers getting service that they would describe one of several ways. They say things like “Functional, yet cold” or “They helped me but they were somewhat unfriendly” or “I had to yell at them to get them to listen to me” and lastly “What the %$&^ is wrong with you guys?”

On the flip side, if you have personnel that are really trying to work within your Dealership system and are not “Empowered with Authority” you end up with comments like “I have used you guys in the past and I’ll continue, but not as much as I used to” or “I don’t know if I’ll come back, even though your Advisors are great” and “They were ok, but if I find someone else that is closer or cheaper, I’m going to go with them” and lastly “What the *&^% is wrong with you guys? Don't you want my business?”

The Service Department that has “Empowered with Authority” all of their Advisors will consistently outperform and outsell any other Dealer that has not taken that step.

This means Advisors are Trained to be adaptable and flexible and they do what is in the Best Interests of the Customer.

This leads to a Customer experience that can only be described as “Exceptional at Exceeding Expectations” and "spontaneously helpful." And of course results in unsolicited referrals and an increase in business.

Learn to adapt, be flexible, change as needed and Empower with Authority and your Customers will respond with feverish repurchase loyalty and unsolicited testimonials.

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

Service Advisor Training---Expense or Investment?

Service Advisor Training---Expense or Investment?

A significant number of dealers these days are becoming more and more aggressive in selling used vehicles. Some have even lost their new car franchises and now rely solely on used vehicle sales along with parts and service sales to pay the overhead and hopefully provide them with a significant Return On Investment (ROI). I’m confident you will agree that it is critically important for all dealers to earn the highest possible ROI on every single investment they make, right?

Now, in order to increase sales in any department you have to start doing things differently and/or do different things. If not, then you simply continue to do what you’ve always done as stated so clearly by Zig Ziglar: “You have the perfect processes in place to get you exactly what you got last year.” I’m talking about training here in order to positively affect change. Some of you will take the approach of “saving your way into profitability” by vowing not to increase your expenses but you remain willing to make investments every day of your business life. Let’s consider some examples.

NADA research shows that the average used car cost (investment) is about $13,300 and sells for around $15,000 resulting in a gross profit of $1700 which is a ROI of 13%. ($1700 divided by $13,300 = $13%). Assume you can turn that inventory investment of $13,300 every 30 days (great job) that would be 12 turns per year at $1700 gross PRU for a total gross profit of $20,400 resulting in a ROI of 153%! My guess is none of you would hesitate to invest $13,300 in a used car knowing that you will realize a 153% ROI over the next 12 months. As a matter of fact, many of you wouldn’t hesitate to make multiple investments: 50, 75 or even 100 of those $13,300 cars to earn that kind of an ROI. Makes perfect sense to me!

Research also shows that a Service Advisor servicing 12 customers per day (4 Warranty and 8 Customer Pay) and averaging 1.5 Hours Per Repair Order at NADA benchmark’s will produce about $1637 in Gross Profit per day, $36,016 in Gross Profit per month and a total of $432,194 in Gross Profit per year. Let’s assume you diverted just one of those $13,300 used car inventory investments into a $13,300 training investment in your Service Advisor and that training produced an extra .5 HPRO (33% Improvement), you would realize a Gross Profit increase of about $12,000 per month or $144,000 over the next 12 months resulting in a ROI of 1082%! (If your stock broker can do that for you please send me his name and number.) Let’s finish the math here by adding the additional gross profit of $144,000 to the $432,194 and you have a total gross profit of $576,194 produced by one employee—The Service Advisor. Now I ask you, how many employees do you have producing over $576,000 a year in Gross Profit? Maybe your F&I Producers. How many salespeople are producing that kind of gross for you? This is the equivalent of selling 28 used cars a month at $1700 PRU. How many sales people are selling an average of 28 cars a month to match the performance of a 2.0 HPRO Service Advisor? How’s that $13,300 training investment working out for you now? Is it an expense or an investment? Maybe you should ask your broker to answer that one for you?

Let’s continue on with this logic and consider the following:

1. Who gets the most incoming Sales Calls per day—Salesperson or Service Advisor?

2. Who meets and greets the most Sales Opportunities per day—Salesperson or Service Advisor?

3. Who has the greatest impact on Owner Retention—Salesperson or Service Advisor?

4. Who has the greatest impact on Brand Loyalty—Salesperson or Service Advisor

5. Who needs Telephone & Sales Training—Salesperson or Service Advisor

The answer to questions 1, 2, 3, and 4 is the Service Advisor. The answer to question number 5 is both the Salesperson and the Service Advisor. The simple fact is anyone in your dealership who comes in contact with your customers as well as your potential customers, must be professionally trained on how to effectively communicate (Sell) to them all.
I’m sure far too many of you Dealers, General Managers and Service Directors will continue to try and “save your way into profitability” versus being proactive and commit to re-allocating some of your inventory investment into your training investment. For those Dealers, General Managers and Service Directors who “get it” you can look forward to record Service and Parts Net Profits in 2010. It’s your choice to make.

Article by:

Don Reed

CEO-DealerPro Training Solutions

NADA University Partner

Does 100 Percent Service Absorption Interest You?

I hope you answered “Yes” to the question above. So, let’s begin with defining what “service absorption” means.

It is calculated by taking your total gross profit from the sale of parts and labor, which is sales minus the cost of parts and labor sales and dividing that total by your dealership’s fixed expenses. Do not include any variable sales expenses such as sales commissions or floor plan interest.

To put it simply, if one can achieve 100 percent service absorption, then all of the dealership’s fixed expenses are paid for by the service and parts departments, which means that the sales department is producing net profit on the very first unit it sells. For example, if your sales gross profit is $4,000, your sales commission is $1,000, and your floor plan interest is $500, then you have $1,500 in variable expenses to deduct from gross profit, which leaves you with a net profit of $2,500.

Based on our financial evaluations of RV dealerships across the country, we find that most dealerships are well below 45 percent. That means it is difficult for the average dealer to believe that 100 percent service absorption is indeed attainable since he or she never did it nor do they know of any other dealer who achieved such a feat.

Well let me assure you that it can be done if you are willing to change.

The most significant change needed is to change your attitude toward your service department. First, you must believe your service department will become a profit center. Currently, many dealers perceive this department as a support department for the sales department and to prep units for delivery, then handle warranty headaches after the sale.

Once the warranty period expires, there does not seem to be much effort to keep the customer coming back for retail repairs. After all, during the “season,” the shop is booked for two weeks or longer on any given day, so why worry about retail repair work? This attitude needs to change because retail customers will spend thousands of dollars on parts and labor, which have the highest profit margins of any product you sell. Additionally, we know the RV owners who have their RV serviced at the dealer who sold it to them are much more likely to buy their next unit from that dealer.

We find that the dealers who have low service absorption also suffer from low shop productivity. Shop productivity is defined as the number of hours sold on retail, warranty, and internal repair orders, divided by the number of clock hours the technicians actually work. For example, 100 hours sold on all repair orders divided by 200 technician hours actually worked, equals 50 percent shop productivity.
Our experience shows that most dealers fall into the range of 50-55 percent shop productivity. Are you starting to get a picture of the opportunity for improvement? How can you be booked out two weeks in appointments when your technicians are only 50 percent productive? What happened to the other 50 percent of their working hours?

Technicians, for the most part, are hard working employees. They brave the cold, the heat, the rain, and the snow to perform whatever service or repair is printed on the face of the repair order, and most of the time they complete the service or repair to the satisfaction of the customer. However, do they complete the service or repair in as short a time as possible? More importantly, do they have the incentive to complete service or repairs as quickly as possible? It’s called “performance based compensation.” At most RV dealerships, the answer is “No,” since technicians are simply paid by the number of clock hours worked with no regard for the number of hours sold. If you are a technician, what difference does it make to you if you spend four hours completing a two hour job? Conversely, if you were paid two hours to complete a two hour job, would you try your best to finish in two hours so you could get another repair order to get paid on? If you completed that same two hour job in 90 minutes and still got paid for two hours, would that be a good thing or a bad thing? If you are a good technician, a good employee, and you have a good attitude, you just gave yourself a pay raise. You also, just gave the dealer a pay raise.

Now, let’s assume that you install this “performance based pay plan” in your shop and your technicians’ productivity jumps to 75 percent from the current 50 percent. You just realized a 50 percent increase in labor gross profit. If your dealership is currently profitable, this 50 percent increase in labor gross profit then becomes 100 percent net profit. Take a look at your total labor gross profit for last year and increase it by 50 percent, and then ask yourself if it would be worth changing your attitude to put that much money in your bank account. What would it cost you to do that? Nothing!

by: Don Reed

The Top Ten Excuses and Myths of Dealership Training Programs

Number 10.

“We’ll do it ourselves.” The Truth is very different than the Reality. Most of the time Managers find it hard to devote 5 minutes to a vendor or the factory Rep let alone the hours of training required to make a change in an Advisors behavior.

Number 9.

“It’s too expensive.” We have a saying at DealerPro… “Never let money stand in the way of training.” No, Mr. or Ms. Dealer, it’s too expensive to do nothing. Every day you wait, you are losing Gross Profit. Those days of Lost Opportunity add up to months and then years of money flowing out of your Service Department. Let us help you achieve your Goals for 2011.

Number 8.

“It’s not the right time.” When is it ever the right time? Every day there are new challenges. People quit, the computer system crashes, the parking lot is being repaved…there is no right time. In fact, waiting for the right time is the exact opposite of the right time. It is always the wrong time to wait and it is costing you money Mr. or Ms. Dealer.

Number 7.

“I’m in the middle of hiring new people.” What a perfect time to get them trained properly. What benefit is there to waiting for training? None, there is no benefit. Every successful organization on the planet has a training program for new hires that gets them started on the right foot. You want them to be properly trained and started off on the right foot don’t you?

Number 6.

“We do things differently around here. Your program won’t work.” In the 11 year history of DealerPro that refrain has been heard hundreds if not thousands of times. We have proven that our system does work without regard to location or region. It works because it’s based on people and processes.

Number 5.

“My people won’t like it.” That may be true. If they are underachieving, they won’t like our program or any other program. When you start making changes people who have been comfortable get…uncomfortable. Why? If you want to succeed, you have to do things differently.

And comfortable people just want to stay comfortable, don’t they?

Number 4.

“We are too busy to do training.” Mr. or Ms. Dealer, this is exactly why you need to do training. If your level of “busy” matched your level of profits, we wouldn’t be having this conversation. There are busy Dealerships and then there are Dealerships that appear to be busy. In the latter, we find that there is a lot of wasted opportunity.

Number 3.

“What if I don’t like the Trainer?” We are a Performance Based company Mr. or Ms. Dealer, and as such, everyone is measured all of the time. If there is a Performance issue, chances are we already know and will be talking with you and your Trainer to identify the problem.

Number 2.

“I have a friend/consultant/the factory with a similar program and we want to use them.” While we support Training and certainly respect anyone who can provide a program, the differences between DealerPro and the “other guy” is tremendous. Here are a few items to consider.

1.Will the friend/consultant/the factory return every month for 13 months for 3-5 days of training in the service drive?
2.Do they have any “skin in the game”? In other words, are they fee based or performance based?
3.Do they have an Automotive Retail background? Our average Trainer has 20 Years experience as a Service Manager or Service and Parts Director.
If the answer to any of these questions is no, then you really need to consider DealerPro as your first choice.

Number 1.

“I’m not really sure about all of this. Isn’t this what I am paying my Service Manager for?” Mr. or Ms. Dealer, we find that most Service Managers and Service and Parts Directors are good at doing lots of things.

We are the best at one thing, Training Service Personnel.

And because we are the best our Dealers enjoy an average 35-40% increase in Gross Profit.

Bottom Line, there really is no reason not to start Training.



Let us help you get the Profits you deserve from your Fixed Operations.

Contact me at rheywood@dealerprotraining.com

DealerPro Announces Phone Training Schedule For 2011

Once in a while a great deal comes along. Your friend has tickets to the game at half price…you find the golf clubs you want on sale at 40% off…the caterer for your daughters wedding throws in two bottles of champagne for the wedding party… great deals come in all shapes and sizes.

This is a great deal.

DealerPro Training Solutions is sponsoring 10 Training Sessions covering topics ranging from Increasing Your Service Absorption to Overcoming Objections starting January 5th, 2011!

All you need is a phone and a workbook…the seminars are FREE! It’s simple to register! Just send an email to freetraining@dealerprotraining.com so we can send you the password for the workbook.

It’s That Easy!

Each Training Session will last approximately 1 hour with a rebroadcast later in the day. These seminars are for Dealership Management Personnel, Fixed Operations Personnel, Service Advisors, Parts Advisors and anyone that has a Customer Service role in your Dealership.

All of the material is from DealerPro Training Solutions extensive Training Library and includes our most popular subjects from Training Manuals, Articles written by Don Reed the CEO of DealerPro Training Solutions, DealerProVT, Blog Posts and other Training Modules.

And the best thing is…it’s FREE!

Just send an email to freetraining@dealerprotraining.com so we can send you the workbook password and seminar schedule. We will do all the rest! All you have to do is call in on the designated day, listen, complete the workbook and implement the Training!

Of course, DealerPro is ready to help should you need or want additional Fixed Operations Training. You can tell us about that at your convenience. We are a full service Fixed Operations Training Provider and NADA University Partner. Go to www.dealerprotraining.com or www.dealerproblog.com for more information about us.

If you miss the start time, don’t worry! We will rebroadcast the seminar later in the day.

Send an email to freetraining@dealerprotraining.com and get signed up!

For Trainers

The greatest single feeling of accomplishment you can experience as a Trainer is one where someone you are Training suddenly…Gets It.

And right in front of you… before your very eyes, there is a Change.

See, in Training, change is mostly slow, frequently subtle, hard to see and sometimes hard to measure. It requires energy, time, committment, belief, knowledge, skill, communication, background, application and mostly… Will Power.

So, when someone “Gets It” and it happens right in front of you, it is a pretty special moment. Because up until that time you have invested all of yourself on…Faith.

Nothing more.

Faith in that person. Faith in what you Teach and how you Train. Faith that if you keep trying and never give in to the naysaying, the complaints, the whining, the bitching, the negativity…then you will have that moment…that special moment that occurs only after you have given of yourself and invested in another person based solely on Faith… with the only Thought and the only Reward… a moment in time when… that person…Gets It.

So, for you Trainers out there, the ones with the skin in the game, the heart on your sleeve, the feet on the deck and the eye on the prize…Keep It Up. We are counting on you.

We are counting on you to see us for what we can Become and what we can Achieve. We are counting on you Mr. or Ms. Trainer to Push us when we think we cannot be Pushed any more, to Train us when we think we have been Trained enough, to ask us to Commit to what you are Teaching us and to hold us Accountable for what we do or do not do.

That is what we are asking of you Mr. or Ms. Trainer.

Because if you do not…who will?

And because we have Faith in you Mr. or Ms. Trainer, we will…Try.

Rest assured that we will stumble, we will procrastinate, we will regress, we will start in fits and flubs…and through it all we will be counting on you.

Counting on you to be there to guide and lead. To lead us when we want to quit and remind us what we can become. You never quit on us and that is why we look to you. Because you have Faith.

For if you give up on us, what Hope do we have? If you do not Train us, who will?

Remember that you fill a Role…the most important Role any person can have …the most Respected of all Professions a man or woman can undertake…that of one who Leads and Trains. We ask that you don’t give up on us.

We ask that you…Try. Because we want to be the person that “Gets It” and make everything you do worthwhile.

We are counting on you.

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.

3 Important Steps to Increase Service Sales

Ooooohhh, you got a shiny new car. I got to admit….you look good in it! It’s all you…the color… the styling….all your friends and neighbors are just gonna scream when you pull it into the driveway…they’ll say things like “Nice ride” or “Man, that is saaaaawwweeeetttt!”

And for the next few months you are constantly looking for excuses to take that baby for a spin! Need a double A for the tv remote??? “I’ll be right back” is the only thing you shout as you rush out the door to a store clear across town just so you can “cruise it baby!” Know what I’m talking about?

You probably are not even thinking about this next question.
“What percentage of your customers take delivery of their new or used vehicle and then, once they get home, remove that maintenance manual so they can review their required and recommended maintenance schedule?”
asks Don Reed of DealerPro Training Solutions.

The answer, not many. The reason is, they are just like you and me. The last thing on our minds is “When will I need to take it in for my first service?” All this means is that the purchaser, who has become your new potential Service Customer, will need to know what maintenance is required in order to keep their vehicle in top running condition.

If you are in Service there should be a word that just popped into your head. Can you say “Opportunity? In order to capitalize on your potential ”opportunity” you will need to do at least 3 things.

1st, provide a friendly, inviting environment to have service completed. Some things you will need to have are Friendly People (not fake friendly), clean waiting rooms and restrooms (a real must!), adequately comfortable chairs to sit down (not the plastic high school lunchroom chairs), access to refreshments (does not have to be gourmet) and probably the number one item in the customers mind, a promise to meet the customers time expectations.

2nd, have personnel that are not only knowledgeable about the maintenance required, but can explain it in a manner that a customer can understand with a friendly, caring attitude. No condescending, no derogatory or demeaning statements, no expectation of compensation. Just a sincere and caring attitude in favor of the customer. Lastly, a thorough inspection of the customer vehicle when in for service. Everytime. When completed, the customer should receive a copy and complete explanation of what was found and the overall condition of the vehicle. Everytime. By doing this the customer and you will begin to build a relationship. One that will lead to continued customer loyalty to the brand and the Dealership and future business for you.

Are there many more things you need to do? Yep. These are just 3 of the most important. There are a lot more steps to take in increasing your service market. If you can accomplish these 1st 3, you’ll be on your way to having increased service business, returning loyal customers and increasing profit.

Now, go get your car and take it for a ride…somewhere there is a double A about to go bad and you are going to need a new one!

Are You Trying to Save Your Way to Profitability?

Getting profitable. Wow. How cool would that be?

You come into the store the first day of the month, open the door to your office, turn on the lights, sit at your desk and open the drawer that you keep your last months financial statement in and read through it until you come to the page that has the final numbers….and you smile a little self satisfied smile….when you realize “we paid all of our bills before we even opened the door this morning.”

Sounds like a science fiction novel? Or a fairy tale?

Maybe…especially if you are trying to save your way into Profitability.

It can be done…no doubt…that first month or two after you have made the cuts in Personnel, and wages (a favorite of all the employees by the way), and supplies, and vendors (they love that thing you do…you know..”Hey dude, I’m not paying $75.00 a car anymore for ding repair, it’s $50.00 now.”), and weekend meals for the Sales Dept…..you know what I’m talking about…and at the end of the second month…Wala…Profit. Right there on the statement. Just like you thought.

Then….the unthinkable happens…even less Traffic…. which you guessed it…. leads to less Sales and that of course takes us to less Profit because there is less Revenue and less of….well…EVERYTHING!

Now what do you cut? More importantly, how can you remain Profitable?

Maybe the question is not “Are my Expenses too High?”….maybe it’s “Are my Profits too Low?”

If this is you, then you need to start looking at Profit Generation and not Expense Cuts. Let me elaborate.

There is an area in your Dealership that has been known to generate Profit….consistently…if it’s being done correctly….it’s called the Fixed Operations or Service and Parts Department. I know….you can’t believe it either….it’s been there all along. Just waiting to be capitalized on.

Let’s present some facts. Now, I’m not picking on anyone, just discussing. Don’t get offended…I’m just the messenger and the alarm sounder.

The average hardworking Salesperson in the average Dealer selling an average New Vehicle will generate an average of $1450.00 in Gross PUS. If the New Vehicle has a $30000.00 sale price, that equates to .048333 or almost .05% average Gross Profit PUS.

Lets look at the Service Numbers. The average hardworking Advisor writing an average of 12 ROs a day will generate an average of $2754.00 in Sales with an average overall Gross of $1636.00 or 59% Gross Profit, per day.

Compared that to the average hardworking Salesperson overall average monthly Sales of 11 Units generating a total average monthly Gross of $15950.00, the average Advisor, well, has the bigger potential!

The average Advisor will generate $32,720.00 in average Gross Profit for the month!

Ok, what’s your point?

Since Saving our way to Profitability is a short term fix (and one sure to demoralize and in some cases, scare the employees), why not invest and allocate available resources into the Fixed Operations? One thing is for sure, the Sales to Gross ratio is a lot better, and the potential for getting even more is a lot greater.

So, which seems the better course of action?

Saving your way to Profitability or Generating More Profit?