Monthly Archives: March 2012

What is lacking in Fixed Ops?

Don Reed’s “Accountability”


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.

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?

Why would you need something “new”?

The Business Process Management Life-Cycle

The Business Process Management Life-Cycle (Photo credit: Wikipedia)

Nearly every week someone says “What’s new?” in the Fixed Ops Training world as if there is something wrong with what works.

And every week, the answer is the same. When it comes to Fixed Ops Training, Coaching and Mentoring…”Not much.”

Oh to be sure, there are “new” things in Fixed Ops every day.

There are at least a zillion ways to keep in contact with the Customer. And there must be a bazillion CRM companies that can manage a “lost souls”campaign. And, yes, there are several manufacturers that have launched in-Dealership Training programs.

But “new” Fixed Ops Processes, “new” Fixed Ops Training, “new” Fixed Ops Coaching…not much is new. Why?

Why do you need something “new?”

What would “new” do for you that “tried and true” does not?


And the reason why is most of the time we don’t use what he have available! Try asking yourself these questions and see if you still need something “new.”

1. Do you have a Daily Monitoring Process for your Service Advisors, Technicians and Managers?

2. Do you Counsel and Coach (hold your people Accountable) for those Daily results?

3. Do you spend at least an hour in the Service Drive every day?

4. When was the last time you listened to your Advisors/Parts Counter take a Customer phone call?

5. Are all of your Personnel aware of Stated Goals for the Dealership/Department?

So, if you answered No to these, why would you need something “new?”

Commodity or Original…which one are you?

Distributing surplus commodities, St. Johns, A...

Distributing surplus commodities, St. Johns, Ariz. (LOC) (Photo credit: The Library of Congress)

The world is full of commodities.  Everything from cell phones to toothpaste.  It is the glue that binds all of us together.  We can’t live without them.  Nearly everything we use today is manufactured and produced this way.  In fact, we would collapse as a species if it was not.

In the past 150 years we have morphed from a “handcrafted” industrial base to “mass production” and applied the concept to everything including the “Service Industry.”

When you apply these concepts to the “Service Industry” you get the same” drive thru” experience at any fast food restaurant in the country. It does not matter if you are in California or New York.  And if you were to ask anyone if they were expecting that same experience when going to the drive thru whether they were in CA ort NY, they would say “Yes!”

Let me ask you this.

What are the most valuable objects from the past 150 years? (Generally speaking) Handcrafted originals or mass produced objects? And the obvious answer is an original.  No question.

Of course, the first of anything mass-produced has a tendency to be more collectible than say number 10,000, but in most cases, it does not carry the same value as a handcrafted original.

This same concept applies to service experiences and our perception of the difference between what we perceive to be “Great” service and “average” service or a commodity as it were.

In fact, were I to ask all of you, which would you prefer…one night’s stay at the local “motel no-tell” or one night’s stay at the Beverly Hilton, which would you choose?  How about dinner at “Chuck’s Beef Bistro and Laundromat” or Gramercy Tavern in New York?  Of those two choices, which sounds better?

The problem with readily available commodities (including Service) is we might need them, we cannot live without them, but we would rather have the handcrafted original instead.

Basically we all want a handcrafted experience in a commodity driven world.

And if I were to walk into any Service Department and ask the Service Manager in that store “On a scale of 1 to 10, how do you stack up providing service vs the “drive thru” down the street?” what do you think his/her  response would be?  Most likely they would be indignant and offended.  They would not like their Service Department and their personnel being compared to a “fast food experience.”

The problem is, a lot of them are closer to fast food than handcrafted original.  Here are some clues that you might be falling into that “commodity” trap.

  1. Personnel in your store use processes as an excuse to marginalize the Customer’s experience rather than as a tool to build a relationship.
  2. Personnel in your store use electronics (computer) as a communication barrier.  They talk to the screen instead of the Customer.
  3. Personnel in your store do not attempt to learn the Customers name and use it when addressing them.
  4. Greetings are perfunctory and lifeless.  You could get the same greeting by calling into the DMV.
  5. Customers are “handled” rather than “taken care of.”  There is a difference.  None of us like to be handled but we all like to be taken care of.  You can go to the maternity ward of any hospital to see the difference.

If you find your Service Department and your Personnel in this “commodity driven” mentality, you need to inject some “handcrafting original” Training and Coaching.

Here are 5 things you can do to get original.

  1. Practice Greeting your Customers like they are long-lost relatives whom you haven’t seen in years.  Smile, extend your hand for a handshake, or if you know them well enough, give them a hug.  Make small talk.  Notice something about them or about their vehicle.  Remind them why your Service Department and you are an excellent choice.
  2. Learn your Customers name and use it! If they prefer to be called Mr. Jones or Ms. Smith or Bobby Bubbagump, whatever it is, say their name.  If you don’t know how they like to be addressed, ask them!
  3. Use the write-up process and walk around as it was intended.  As a tool to build a relationship strong enough that your Customer feels they want to conduct business with you and have their service work completed in your Service Department.  If you or your team has a poor closing ratio then maybe you might want to take a look at what is happening in the write-up and see if the problem starts there.
  4. Learn to make eye contact. It’s not that hard.  Look at your Customer from time to time, smile, nod, use non-verbal communication to indicate you are listening and paying attention to them. Stop talking to the computer screen.
  5. Take care of your Customers and stop handling them.  It’s the little things that separate the “drive thru” from the “original.”  Show, don’t point.  Talk, don’t grunt.  Smile, don’t frown.  Ask, don’t assume.  Explain, don’t tell.  Offer, don’t demand.  Options, not ultimatums.  Time, not task.  Taken care of, not handled.  Thanks, not haste.

Want to start kicking the competition’s butt?  Stop competing on a commodity basis and start building an original Customer experience.  There is no competition when you are an original.

Empowerment, Action, Solution…why does Andy succeed and Fred does not?

vintage: grandma and co-workers, 1950s event

vintage: grandma and co-workers, 1950s event (Photo credit: deflam)

Professional Service Advisors are Action oriented. They don’t spend a lot of time worrying about what is The Right Thing To Do because they already know what the Right Thing To Do is.

These Advisors have a sense of Empowerment and that leads to Empowered Action.

Empowered Action by definition is when one has the ability to do something with the Customers Best Interest in mind and does so with the  support of Management and Ownership.

How can you go wrong with that?

The best chance any employee (or Manager for that matter) has for success in taking care of the Customer  is devising a thoughtful solution(s) for concerns or problems that are important to the Customer, not the Dealership.

Don’t we get it backwards sometimes? We start focusing on what we perceive to be the concern or problem instead of finding out what is of concern or is a problem for our Customer(s).

Empowered Action followed by rigorous follow-up will get results. Every time.

Lets take a look at two different Advisors.  Achiever Andy and Freakin’ Fred.

Freakin’ Fred has been writing 1.2 HPRO for months. He has been allowed to stay at ABC Motors because “it’s too hard to find someone else.” His method of taking care of Customers starts with the standard “Do you have an appointment?” or “Can I help ya?” He does nothing to go out of his way for any Customer because he does not think to do so.

Grandma Pastinky comes in and it is her pleasure to have Freakin’ Fred take care of her service needs.  During the writeup, Grandma says “By the way Fred, during my last service visit, they forgot to top off all of my fluids. The bottle for the coolant was empty when Grandpa Pastinky checked it. And, no one stamped my book. I told them it was in the glove box.”

Here is exactly why Freakin’ Fred is at 1.2 HPRO.

First, he does not look at the history to see if something had been done in the past. Second, he does not take a walk back out to the vehicle, open the hood and see if he notices anything.

If he had done that, he might have noticed the coolant bottle being empty and the line of coolant spray marks across the hood insulation from the water pump leaking and coolant being sprayed all over by the serpentine belt.

Nope. He merely nods and writes on the repair order “Top off fluids.” And, guess what? The book never gets stamped. But that’s minor compared to what happens next.

Grandma is sitting in the waiting room. The tech takes a look at the car, notices the coolant leak is coming from a leaking water pump, gets an estimate together and gives it to Freakin’ Fred.

What does Fred do?

He walks into the waiting room and tells Grandma that she now has a $437.00 water pump replacement and it’s going to take most of the day.  Does Grandma want to wait for it? “I don’t think so Fred” she says. In fact, Grandma is distrustful and feels like Freakin’ Fred is trying to take advantage of her.

Contrast that with Achiever Andy. His HPRO is consistently above 2.3. He is a Solutions Provider. He takes Empowered Action all of the time because he knows how to do so. He is constantly going out of his way to make the Customer experience better.

Freakin’ Fred comes back into the writeup area and says to his pal Andy “What a pain Grandma Pastinky is. She never buys anything. And she is always complaining…whine, whine, whine.” Andy asks what happened and Fred tells him.

Andy says to Fred “Let me see the repair order. If Grandma Pastinky buys this repair, you can buy me lunch.” Fred reluctantly agrees.

First, Andy makes sure that the other things Grandma came in for are taken care of. He stamps the book, and he verifies the other service work is completed and  the fluids are topped off.

He then goes to his Service Manager and says “Hey boss, I’m going to take care of a situation and give Grandma Pastinky a rental for one day. She is having some extra repair work done.” The SM of course says “Go for it.”

Andy then takes Grandma out to her car and shows her what is going on. He assumes the Role of Advisor, which means, he goes out of his way to Advise Grandma her best course of action and tops it off with “And I’ve already arranged for you to have a rental car for the day, no charge.”

He also asks Grandma if she would like for him to call Grandpa Pastinky and go over the details.

Grandma leaves the vehicle to be repaired. She goes  home and a little while later she comes back with Grandpa Pastinky.

Andy remains calm and patient. He explains the need for the repair and why it would be best to have it done now. Grandpa Pastinky thanks him for taking care of them and leaves the car to have the water pump replaced.

Later, he enjoys his free lunch, courtesy of Freakin’ Fred.

Andy is totally confident that he can provide a Solution for any possible scenario  any Customer could or would ask of him. Why is he confident? He has been Empowered to Take Action in the Best Interests of the Customer and Trained to do so.

Freakin’ Fred has these same “magical powers” as well. Yet he continuously fails because he does not use them. Ever. It does not occur to him to be Solution Driven or to take Empowered Action.

Andy succeeds. Fred does not.

Does Fred work at your Dealership?

Why Do You Have Inactive Service Customers?

Automobile dealership - service and repair are...

Image via Wikipedia

Recently I received a call from one of my trainers who was frustrated with the dealership where he was training and wanted to know if I could offer any suggestions.

I asked what his concerns were and he stated that the service department had blocked out their appointment schedule for all technicians for the next five days. No appointments for their warranty or retail customers for the next week.

Of course I asked why would they do that and the answer was—–“the dealer bought three truckloads of cars at the auction and all of the technicians are working on nothing but internals until every vehicle is reconditioned.”

Are you still laughing? This dealer obviously has a strong interest in supporting his Used Car Department which is a good thing but he still has to be able to service his retail and warranty customers in a timely manner as well.

NEWS FLASH! Any customer who has a mechanical concern with their vehicle does not want to wait a week to have it corrected! When those customers call his Service Department for an appointment and they hear “I can schedule you for an appointment next week” they are most likely going to end the call with something like “I’ll have to get back to you.”

Next they call “SIRI” and ask for help in finding an auto service center close to their location. Who’s “SIRI?” She is the voice on their iPhone who in about 2 seconds or less gives them the contact info and driving directions so they can now have their vehicle serviced at his competing dealer or aftermarket service facility.

Got a DROID-well maybe you have to touch an app on the screen and get the same info in seconds. Don’t like electronics (still lost in the 60’s) then let your fingers do the walking in that big heavy book and the customer can find his competitor in a minute or less.

My point is the vast majority of every dealer’s customers do not want to wait 3, 4 or 5 days to correct a mechanical repair. They want to hear “today or tomorrow”—PERIOD.

As a dealer you must insure that every customer—NEW—USED—SERVICE—PARTS—BODY SHOP are treated the same. They are all vital to a dealer’s overall profitability so let’s focus on putting the right processes in place and having the proper staffing levels to make this happen. In my opinion, once you lose a customer to a competitor it is very difficult to get them back.

These customers now become a member of your “inactive database.” At what point does a customer become “inactive?” I believe it’s between six and nine months, other says its twelve months and still other say it’s longer.

I recently read an article where a major Japanese manufacturer launched a pilot program last April with their dealers where they developed a marketing campaign to try and recover those lost “inactive” customers who had not returned to their dealer in the past 18 months.

The campaign promoted three different offers to three different groups of customers. One group was offered a FREE Oil Change, the second group was offered a FREE Air Filter and the last group was offered a FREE 27-Point Inspection. Which group do you think had the highest response rate?

If you picked the FREE Oil Change you were wrong. If you picked the FREE 27-Point Inspection you are pretty smart. By year’s end participating dealers had earned an additional $800,000.00 in customer pay sales!

NADA reports that last year dealership customer pay sales decreased by about $800 million. With the rebound in new and used vehicle sales they also report that internal sales have increased.

This sounds a little like the dealer I mentioned above who tells his employees that the internal customer takes priority over the warranty and retail customer.

Is it any wonder that new car dealers in America continue to lose market share in the parts and service industry?

Currently dealers are getting only about 16% of the market while the aftermarket gets 84% and continues to grow. Yes, I understand we have fewer new car dealers today than we had a decade ago but instead of those remaining dealers growing by leaps and bounds due to the dealership closures they go backwards by $800 million.

Meanwhile, the aftermarket continues to grow. With the average age of a vehicle today at 10.8 years it is imperative that dealers get those vehicles back into their service departments. I’m confident the owners see a real value in having their high mileage vehicles inspected by a factory trained technician to insure they are driving a safe and reliable vehicle.

Many dealers will need to hire additional technicians in order to properly support all customers from all departments on a timely basis. What’s wrong with that? Technicians are supposed to be “productive” employees and as such they will pay for themselves by producing more billable hours and additional parts sales.

Unfortunately, far too many dealers are hesitant to hire more techs because they are fearful of upsetting their existing ones. If you fall into that category then I simply ask you “Who is running the store?”

If you are a Service Director and fall into that category then I ask you “Who is running the Service Department?” Does it make sense to ignore the needs of your customers, both internal and external, so you can pacify technicians?

Do you really want to grow your retail market share? Is increasing net profit a priority for you? Wouldn’t 100% Service Absorption be a good thing? How about increasing Owner Retention?

I’m confident most of you answered “yes” to each of these questions so what are you going to do about it? Offer a FREE Courtesy Inspection to every warranty customer, every retail customer, and every Quick Lube customer every day!

Insist that your Service Advisors review the results of those inspections with every customer. Make sure they are properly trained to give feature benefit presentations for following the technicians’ recommendations. Determine who your inactive customers are in your DMS and start marketing to them aggressively with the offer of a FREE 27 Point Inspection and you just might start enjoying some of the benefits outlined above.

You must get committed to utilizing the right appointment processes on the phone and on your website in order to increase your service appointments. You must employ an adequate staff of productive technicians in order to maximize every customer’s service experience, both internal and external, each and every day. By doing so you will eliminate your customers need to call “SIRI!”

Don Reed—CEO

DealerPro Training

What do you pay attention to?

English: A business ideally is continually see...

Image via Wikipedia

What do you pay attention to?

In case you are new to Fixed Ops, we are “results driven.”

There is nothing that we do that is not measured, quantified, compared, sifted through, arm chaired, discussed, metered, broken down, dissected, eyeballed or  run up the flagpole.

Everything we do is subject to verification. Professionally run Fixed Operation Departments know, live, love  this.

And what they pay the most attention to  is “The Customer.”

None of what you do or measure really matters except to the person it matters to the most… and that is the person whose name is at the bottom of the check… I give you “Mr. and Ms. Customer.”

If your results don’t agree with “The Customer,” they’ll tell you.

By leaving and never coming back.

And some of you will say “Look, I’ve got the numbers up, what more do you want?” and “Good riddance, they were bad Customers anyways” or even “It’s about time.”

In our “in your face” society this might seem ok. You can survive a few defections, a few “bad apples” finding a new Dealership to get their Service work done elsewhere, right?

And I say, “If that is your attitude, I suggest you start looking for a new line of work my friend, because you don’t fire the Customer, they fire YOU!”

The “results” we seek are paying Customers coming into our Service Department to have Maintenance and Service work completed on their vehicle and then PAYING US for said Service!

Here are ten questions we need to continually ask ourselves to see if we are paying attention to the right results.

Am I getting repeat business from past Customers?

For you Service Advisors, Am I  getting repeat business from Customers who ask for me by name?

Am I getting referrals from my Customers without asking for them?

Am I providing solutions to problems or am I a problem?

Am I focused on helping my Customers?

Am I giving the Customer everything they asked for… and a little bit more?

Am I taking action or being acted upon?

Am I keeping the Best Interests of the Customer in mind?

Is my Service Department a place I would like to do business with?

For Service Advisors, Am I a person I would like to do business with?

Am I giving all I can each and every day?

Am I able to look in the mirror and say “I did my best today”?

Did you answer all of these with a “Yes” answer? If not, what results are you paying attention to?

More importantly, what are your Customers saying to you?

Pay attention to the results that matter most. Your Customer will tell you.