Monthly Archives: January 2011

3 Strategies for Failure

There are 3 Strategies for Failure that many Service Managers and Fixed Operations Directors use (with little Success) to facilitate changes in their daily operations and the behaviors of Service Department Personnel.

Yet, these 3 Strategies are the most common response many otherwise capable Managers (and Dealer Principals)  use over and over again with little to no results. This in turn leads to a downward spiral of resentment followed by anger followed by the inevitable angry confrontation which in turn is followed by more resentment followed by more anger…you get the picture.

I’m talking about the 3 W’s.




Wanting Sad Sack Sam the Service Advisor to change his behavior is the first step to resentment, especially when it is not followed by an Action Plan.

As a Leader and Manager  you want Sad Sack to make better Sales presentations. You want additional Gross Profit. You want CSI. You want Service Sales Success.

And if you don’t do anything, expecting Sad Sack to do it on his own merely because you want it, well there is an old saying…”want in one hand and S*&T in the other and see which one fills up first.”

And then this “want” begins to build. Everyday Sad Sack does nothing to improve and continues to perform at the same level, the “want” gets bigger.

Which leads to the next stage, waiting. Which of course, never works.

A want followed by a wait leads to a “WAAAAAAA!”

Sad Sack still has no idea that the Manager wants him to change his behavior and become better in Sales and CSI and is  waiting for him to come to this realization. 

Does this ever happen? Does Sad Sack ever figure out through osmosis or the magic 8-ball that his Sales and CSI need to get better?

And because nothing happens, it leads to the last step in the 3 Strategies for Failure, Wishing. The other two obviously did not work and now the Manager begins to wish there was a change in Sad Sacks behavior and in most cases, feverishly  Hopes something happens. 

Does it happen?


What does work?

Check back next week.

Are you practicing the 3 W’s? Do you want to make a change and you find yourself waiting and wishing something will happen? Send an email to with “Success” in the subject line and we will build you an Action Plan for Success in 2011.


When is Enough…Enough?

When is enough…enough? If you are in Fixed Operations, this question is surprisingly easy to answer.


There is never enough Gross Profit. In  fact, when was the last time you and the Dealer Principal sat down in the office and he or she took out the latest financial, looked it over and then said to you “Go ahead and close the service drive and take the rest of the month off. We have enough Gross Profit!”

There is never enough Service Absorption. We live in an uncertain and untimely world my friend! Today the sky is clear and the sun is bright. Tomorrow there may be clouds and rain and wind. Wouldn’t it be nice to “weather” it in comfort. This is called 100% Service Absorption. The more absorption you have the easier it is to “weather” the storm.

There is never enough margin on your Gross Profit Margins! Got aging inventory? Got “A” level Master Techs? Got Sad Sack Sam as a Service Advisor? Then you need more margin! When you have great margins you can have an off day or two in the month because your margins cover the spread. If you have low margins, an off day or two kills you!

So, if you are a Dealer Principal or General Manager and you need more Profit, more Service Absorption and more Margin…why oh why would you continue to do the same things that got you these “Dealership Going Out Of Business” results?

What are you afraid of? Success?

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
For more information contact Don at or call 888-553-0100