Category Archives: Fixed Operations

7 Strategies for Your Fixed Operations “Space Race”

I was thinking this morning about how rockets and Fixed Operations Customer Management are related. With all the news about the different companies striving to become the next NASA, it reminded me that we are all in a “Space Race” even though I know that the two subjects seem completely unrelated and are not even in the same Encyclopedia volume.

And I submit for your consideration that driving a rocket into space and good Customer Service Management is exactly the same. Let me explain why.

Your Fixed Operations Service Business is your rocket ship. In this ship is everything you need to survive when venturing into the hostile environment that is the Customer Service space. In your ship (Service Department) you will find all of your life support systems, everything you need like electrical power, data bases, computer systems and communications.

You communicate with your Customers using phones, text, email and even person to person interaction to get them the information you need so they can give back to you course direction. Things like “Yes, go ahead and repair my brakes and rotate my tires” are course corrections for your Advisor and Techs.

Communications and course corrections are just as critical in your business as they are in the space business. You can’t go anywhere unless you know which direction you are going.

Pretty cool, huh. You were driving a rocket ship the whole time and you just thought you were at work.

There is one other element to consider that is the same in space flight as well as your Customer Service Department. It’s the people flying your rocket ship and what they do every day. So, I’d like to tell a little story about the space travel business (and Fixed Operations) and how monkeys become astronauts.

As the space race was starting, it became apparent that eventually someone was going to have to strap in, flip the switch and ride a burst of hot flaming gasses from earth into space and achieve orbit.nasarocket

In the beginning, there was a lot of concern regarding the effects of flying what is essentially a roman candle, into space. Not wanting to risk human life unnecessarily, the idea was floated to teach a monkey to ride in the rocket, thereby getting the data necessary to facilitate safe human flight. (Can you imagine the conversation around that conference table? “We’ve just spent a gazillion dollars on these rockets and we need someone to test fly them.” From the back of the room a tiny voice shouts out “We can get a monkey to do it!”)

So the call went out, find a monkey to go to space. Now we have continents full of monkeys, however, it’s doubtful any of them had seen a rocket much less flown one or even had any idea they were going to learn how to fly. They are monkeys after all.monkeysinspace

As the search started, it became apparent that we would need to set a few standards in place. We had to find acceptable monkeys. We had to train them. They had to be able to complete some simple tasks, pull a few levers, push a few buttons and survive the trip back to earth.

We found acceptable monkeys, trained them and then sent them. It was a Success…except for one thing. We couldn’t get the monkeys to tell us how the ride was, what they experienced and most importantly, what did they learn.

Why go to space if you can’t learn?

After all of the experiments were over, and we had all of the data, we went out and found the best pilots and asked them if they wanted to become astronauts. We had a very stringent selection process that filtered out those that would not make it in the harsh environment of space. We instituted a long intensive training program to make sure that the astronauts could fly rocket ships and respond appropriately in case of an emergency. We then edified the position to attract even more talented pilots who wished to become astronauts. (Who didn’t want to be an astronaut growing up?) We didn’t recruit or train any more monkeys. We found that we had all that we needed.

Nice story. What does that have to do with Fixed Operations Customer Service Management?

Well, I have a few questions to answer your question, Customer Service Professional.

Did the monkey actually “fly” the rocket or just ride around in it and complete a few tasks?

In your business, are your people flying your rocket, or just riding around pulling a few levers and pushing a few buttons?

Are you searching the continent for monkeys or astronauts? Are you training monkeys or astronauts in your store?

Take a look at the list of seven strategies for your space adventure next year. 311-hey-you

1. Key people in key positions need to be fully trained in the operation of your rocket ship.

2. Astronauts make better pilots than monkeys. Hire the right people.

3. Pulling levers and pushing buttons does not make a monkey a pilot. If they are a monkey, give them monkey duties. If they are a pilot, let them fly the ship.

4. You can train a monkey to only do so much. Then you need an astronaut.

5. Astronauts need to have a destination to fly to. (Set Goals)

6. If you keep flying the ship, no one else learns to be a pilot. They become monkeys.

7. Everyone likes a monkey until there is a crisis. Then they don’t want them.

For the new year is your course set? Do you have astronauts or monkeys?

By Leonard Buchholz

(The original article was posted here: http://EzineArticles.com/416202 and written by me)

Why small increases are important to your Dealership profits

Just what does a 10% increase (in any KPI you choose) really mean to your dealership?

Why small changes make big things happen.

Why small changes make big things happen.

 

Have you heard the old saying “Yard by yard it’s hard, but inch by inch is a cinch”?

If I were to go to any of your dealerships and walk into the GM’s office and say “Would you be interested in a 50% increase in Gross Profits?” what do you think he or she would say to me?

They would jump out of their chairs and yell out “Of course…how do I get it!”

And therein lies the problem with increasing performance or increasing profits 50% at a time. It is really hard to achieve that big of a jump all at once. It’s not that people are not capable or willing, it’s just that getting all of the components of a dealership focused and firing on all cylinders at the same time is a difficult proposition at best, and trying to get a 50% increase in any measurable KPI just becomes impossible.

Truthfully, whenever you have heard someone (DP, GM, New Manager, etc…especially the New Manager) say something like “I’m expecting big things this year and our goal is to increase (fill in the blank) by 50%”, would you say the “Dirty Diaper Alarm” trips in your head and you disregard everything that was said and develop a less than favorable opinion of said “Authority Figure” (or whomever was speaking)? Yep, me too.

But if I go into any dealership and ask any service advisor “Hey there Mr. /Ms. Advisor, do you think you could sell an extra $10-20 dollars on every repair order?” what do you think the answer is nearly 100% of the time?

“Of course I can.”

That is the power of a 10% increase.

So let’s look at John Q. Advisor and some of his numbers. At the average of 1.5 HPRO at $85.00 an hour, every repair order John writes is averaging about $229.00 a ticket. A 10% increase is only $22.90 and if John writes 220 repair orders a month, that equates to a $5 Grand a Month increase in Service Sales.

What does John get? At the end of a year, he gets an additional $60 grand in Commission-able Sales and if he is on an average pay plan, he just made another $5000.00 or so dollars for the year or $400.00 bucks a month.

Now go ask your Advisors, “Hey there Mr. /Ms. Advisor, want to make $400.00 more a month?” and what do you think their answer will be? (If they say something smarty pants or “No” or “Who do I have to kill?” just tell them you are going to write a letter to their spouse or significant other stating they turned down a $400.00 dollar a month raise)

Most organizations focus on trying to increase too much when they should focus on just making small but effective changes that yield results over time.

One more thing. Don’t forget the power of compounding.

Back to back increases of 10% in John Q’s example is big. How big? In the second year of a 10% increase, John’s average sales per repair order become $277.00 per copy or $48.00 more than year one, which equates to a $126,720.00 yearly increase in service sales…not too bad a result for a 10% increase.

Get focused on making small incremental changes that add up to big improvements! Help your team see the value and vision of a 10% increase in their service sales process and watch those profits (not to mention team morale) soar!

By Leonard Buchholz

Is this a “Training Issue”…?

Nearly every week we spend training in a Dealership, we try to identify and help correct deficiencies in production, CSI and dealership employee performance. The rub is that every dealership has different issues and problems.

Sometimes it’s the training, sometimes it’s the employee and sometimes it’s the management.Is this a "Training Issue?"

And 100% of the time when there is little progress in performance or profit improvement, the dealership employees and management say “It’s a TRAINING ISSUE!” Of course, it must be a training issue because there is no way on this green earth that is could be the dealerships employees or management team.

So, let’s tackle the myth of the “Training Issue.”

Inconsistent application of processes is not a Training Issue. Once a process has been introduced, trained on and implemented, it can’t be un-introduced, un-trained and un-implemented. It can be ignored. It can be discarded. It can be disregarded.

Processes are systematic steps completed in a specific order to achieve a desired result. Once personnel have been trained on them, practiced them, implemented them and used them, training is complete.

When they are not being followed, it’s because a human being decided that they were not going to follow that process. This means, it’s not a “Training Issue. “

Lack of follow through on promises made to the Customer is not a Training Issue. As an Advisor, when I made a promise to the Customer to call them by 2:00pm with an update on their vehicle, if that did not happen, it most definitely was not because I had not been “trained.”

There may be any number of reasons (excuses) that I missed my call back time. What’s not important is the reason, what is important is the implication, not only to the Customer, but to the Service Team.

If I as a Service Advisor, do not follow through on my promise to the Customer to call them back, take care of an inquiry, make sure a part got ordered…etc., why would that Customer trust me or the Service Department to take care of their needs in the future?

That is the real consequence of lack of follow through. Customers stop coming back. And that hurts the entire dealership.  And it is most certainly not a Training Issue.

Absence of performance results is not a Training Issue.  Performance increases remain the end result of repeated application of processes. Stop applying the process, start deceasing performance. It does not matter if you are talking about a sports team; orchestra, business team or dealership team, the performance achieved is directly related to the consistent application of a process.

So, what is a “Training Issue?”

It’s when someone does not know how to do something. They require Training to understand the process, what steps need to be taken in what order, how to circumvent obstacles and how to implement what’s been taught.

As a young Advisor, I needed to be shown how to write a repair order. I needed Training to understand the steps necessary to make a piece of paper print on a printer so I could present it to the Customer for their signature. Someone had to Train me to do that.

If I did not follow the steps, a piece of paper did not print and I could not get a signature. It was not a matter of not being Trained and entirely a matter of not following the steps.

In the CarBiz, we all have processes in place to help us take care of the Customer whilst making a return on the investment of time we put into following that process. Anytime we deviate from that plan, we risk losing all that we put in plus we risk losing the Customer.The Truth

Make sure that what you believe is a Training Issue is really a Training Issue by asking the simple question “Do they know how to do what we are asking?”

Because most “Training Issues” are really “Leadership Issues.”

By Leonard Buchholz

Where does Profit Improvement start? At the Service Managers Desk, of course!

In every Dealership there is a desk. And behind that desk sits someone who has the responsibility to increase Profits.

In Fixed Ops, this person is called the Service Manager.

Typically  (when I go into a store that is not profitable), I find the person sitting behind that desk working on everything not related to increasing Profits while believing that they are working on everything related to increasing Profits.

I call it the “Theory of Un-relativity” and it goes like this.

P=ATD+PIxNC. Profits equal the Amount of Time Dedicated plus Process Implementation times the Number of Completions.

Simply, the Manager must dedicate as much time as needed every day to making sure processes are being followed and that they are being done with every Customer.

In stores that are not profitable, the Manager spends more time on things that have nothing to do with Profits and everything to do with nothing…including Managing the department…or as I stated before the “Theory of Un-relativity.” The things they are doing have no Relativity to making more Profits for the Dealership.

UP=ATW+UTxNC. UnProfitable equals the Amount of Time Wasted plus Unnecessary Tasks times the Number of Completions.

Let give you an example. I am standing in the Service Drive with a Service Manager when he is approached by the Sales Manager and informed that the tethered marketing balloon outside which normally is in position first thing in the morning is not up yet and “Could you take care of that as soon as possible.”  Unnecessary Task.

Another. SM is working in his office when he is informed that the lights on the front lot “are not lit up and can you do something about it?” Unnecessary Task.

One time, as the owner of my store had just handed me another daily task not related to Profit growth, I decided to write down all of the daily tasks that had been thrown my way over the past year just so I could get a handle on it. The list was 40 plus items and guess what…not one of them had anything to do with making more money.

Were some of them important? Yes. Necessary…no doubt about it. But at the end of the day when the Dealer Principal has “The Fin” in his or her hands and wants to know why “Fixed Ops is off by 15% and what are you going to do about it?” and you have the “But Boss, I’m so busy doing all of these other things!” excuse sputtering out of your mouth…now doesn’t that paint a pretty picture Mr./Ms. Service Manager?

By the way, when I handed the Dealer my list and asked him to specify which of those tasks were Top Priority and which were not, he actually apologized. He had no idea how many things he had “delegated” to me until I pointed it out to him.

Here are a few things you can do to get back on track making more Profits.Profit

1st, make a list of the things you are doing every day. Now separate that list into “Tasks That Make Money” and “Everything That Does Not Make Money.” Give Top Priority to Monitoring, Coaching, Training, Managing and Nothing, Zero, None, Nada Priority to Everything Else. Within a few days someone will come to you and say something like “The lot lights are out again” and then you can show them your list that makes the Dealership money and they will find someone else to ask about the lights.

2nd, share this list with your Dealer Principal or General Manager. Why? Because they forgot they told you to do half of those things and don’t remember the reason why they told you to do the other half.

3rd, learn to say No. Point out that working with your Advisor on Phone Sales Skills is way more important than stocking toilet paper in the bathroom or talking to the coffee vendor about the price of the new machine.  Stick to what makes money and makes sense.

Lastly, you and I work in the real world. If the DP drops the keys off and asks to get his demo washed and gassed, don’t show them your list. Get the demo cleaned up and gassed. Remember the 20 foot rule. Walk outside the building 20 feet and look up 20 feet and see whose name is up there.

by Leonard Buchholz

200K in 200 Days

In the past 4 years there have been quite a few Dealers who successfully increased their Fixed Ops Gross Profit by $200K, $300K (one Dealer had a $900,000 dollar increase) by changing how they conducted their daily Service Operations.

They made fundamental changes in Processes and then Coached their personnel to increased Performance.

If they can do it, so can you.

 

Here is a link to “200K in 200 Days” a resource that describes how Successful Dealers did it!

Get it, Read it, Do it!

By Leonard Buchholz

Uh Oh…Another Employee Quits

Resignation Letter

To: Dealer Principal

From: Fixed Operations Net Profit

Reference: Fixed Operations Gross Profit Resignation Letter

Dear Dealer Principal,

It has come to my attention that Fixed Ops Gross Profit has resigned effective immediately. Without the continued support of Gross Profit I cannot continue to be effective in the performance of my duties while adding funds to your Profitability. (not to mention your bank account)

I too have found other employment at a dealership that understands me and appreciates me for who I am. As you know, I am extremely sensitive to sudden changes in revenue stream, expenses and …ahem…”discretionary purchases” (if you know what I mean)

In the recent past there have been direct actions taken against me by personnel who do not have my best interests at heart. For example, the Service Department has stopped making appointments with adequate time between customers resulting in an instant revenue reduction in my department. In fact, last time I checked, they didn’t have a service drive process at all!

And because we don’t really have any processes in place (including how to answer the phone) there has been a decrease in customer pay RO count. Just last week I heard one advisor tell a customer they could not get in this week for service! And we have techs standing around at 3:30 most days!

I don’t know if you know this or not (and I am not trying to be a “disgruntled ex-employee”), but I heard that the parts obsolescence was at nearly 27% of current inventory! It has become very difficult to get any customers car in and out of the shop in one day due to a lack of parts availability. Just yesterday we did not have brake pads in stock for one vehicle and on another we didn’t have wiper blades.

In one case, the parts manager had to make an emergency purchase and then the advisor gave the customer a discount on parts and labor to make up for the extended wait time they endured while we were chasing down the parts!

Boss, there is not a Net Profit on earth that can work under these circumstances.

I have talked with Margins, HPRO and Effective Labor Rate and they are undecided on whether or not they will stay. Of the 3 (if I had to guess which one), I believe Margins have just about had it as well and will be leaving soon.

I never say never Boss, and if things change around here, I would be interested in getting a call from you.

With Sincere Regret,

Fixed Operations Net Profit

Resignation Letter

Resignation Letter

Date: Effective Immediately

From: Fixed Operations Gross Profit

To: Dealer Principal

Dear Dealer Principal,

It is with great regret that I must submit this letter of resignation effective immediately.

Although we have worked together over the past few years I don’t feel I can contribute to your bottom line anymore. It has been a great experience and I wish you and all of your dealership team the best.

I am quite excited about the opportunity that is in front of me. The team I am moving to have a firm grasp on my potential and have made a commitment to increasing my role while taking care of their customers.

For example, the advisors understand the difference between taking an order and taking care of the customer. They take the time to explain to every customer the different maintenance requirements of their particular vehicle.

And they make sure every customer gets a maintenance schedule with recommendations on how the customer can best take of their vehicle for longer life and greater customer satisfaction.

They even set up a quick lane service that is as convenient as the “aftermarket guys.” Yessir, they have the customer’s best interest in mind at my new place of work.

Those are just a few things they have done to attract new Gross Profit like me. In fact, they made an offer so attractive, I just could not say no. The best part…they even have an advisor service drive write-up process that practically guarantees my continued employment there for as long as I like!

Believe me when I say I contemplated a long time before deciding to make a change. I considered all the benefits of staying here and there are a couple. I know that every month will be the same as last month and there is something to be said for continuity I guess.

Also, doing the exact same things day after day without making changes does have some benefits. At least I always knew that I would have some small role in the dealership’s success. I have to be honest with you when I say that sometimes it was hard watching the other dealerships with larger Gross Profits, but I got used to it.

Perhaps that is what has finally led to this. All in all, I think the best word to describe my time here is “underachievement.” And without any new processes or changes, I’ve made the decision to part company.

I really wish we could have done more together. Good Luck to you in your future endeavors.

Signed,

Fixed Operations Gross Profit