Tag Archives: Car dealership

3 Key Components of Outstanding Service Departments

When examining the best service departments across the country, you often find that they all share common best practices that create additional service sales and gross profits for their dealerships.

These best practices combined with daily monitoring, observation and coaching results in professional sales organizations that can sustain a dealer during times of slow sales or downturns in the economy.

One of the most overlooked skill sets in dealers that struggle with decreasing repair order count is service phone sales skills. While you would be hard pressed to find people who do not have the ability to be courteous and project a good image on the phone, it is easy to find personnel who have not been trained to sell service appointments.

One phone survey company* found that service advisors do not offer appointments or attempt to sell an appointment on 57% of the calls they field even though the opportunity sell an appointment presented itself.

If this is happening in your dealership and your service team fields an average of 100 information calls a day, it means there are 57 missed opportunities, every single day. A properly trained Advisor can be expected to convert 30% of those calls (or more) into service appointments.

So the question is, what would your service drive look like with an additional 17 service appointments every day?

Once you’ve trained and coached on phone sales skills you can then begin to train on Advisor communications skills. This is another area that the most successful dealerships continually monitor and coach their employees to near perfection.

Communications skills are not only important to Customer Satisfaction Index scores, they are critical in Customer retention. Advisors that have weak listening skills and a complete lack of follow through on promises, become the source of nearly every Customer complaint registered at your dealership.5waystoincrease

One Advisor will interact with an average of 10-15 Customers per day. Based on that number, one untrained Advisor can impact 44 Customers a month in such a way as they could possibly decide not to come back.

If your store sells 150 cars a month, and your retention is in the mid-range of 40-50%, you can expect a net gain of 31 new car Customers a month from your 150 sales in the front end.

Does it make sense not to train your Advisor in communications skills when so much is dependent on him/her being a professional in every sense of the word? Of course not.

Lastly, those dealers that are doing it right have a complete marketing plan in place. They make a decision to budget funds for service marketing based on repair order count while taking into consideration recalls, campaigns and industry trends.

Recently there has been a flood of recalls that have not left any manufacturer on the sidelines. Many dealerships took advantage of those recalls by highlighting their ability to service their Customers while attracting new business through strategic traditional marketing as well as social marketing.

And they have “hit it out of the park.”

Not only did they service their own Customers, they were able to attract new business with the goal of converting then to regular service Customers. Take an average dealer writing 45 repair orders a day, factor in about a 30% warranty repair order write-up rate, adjust for “just recall” warranty repairs of about 30-40% from that warranty rate, and your team has the chance to make 3 or 4 recall Customers into regular service Customers every day.

So the question is, did you want to allocate funds for marketing, train for opportunities and coach for results…or did you just want to keep doing what you’ve always done and keep getting what you’ve always got?

Make a commitment to your service team and follow through with sales training, communication skills training and a marketing budget in line with your stated Goals and watch your Profits soar!

by Leonard Buchholz
*PhonePops

How to “blow up” your Customer on the service drive 5 different ways

One of the many byproducts of training in so many dealerships is that you get to observe all the different ways people do things. Like how they answer the phone or talk to a customer in the service drive.

Over the years, I’ve made it a point to take note of some of the ways Advisors and Managers blow their customer up in the service drive and I thought I would share with you my observations and my Top 5.Your Customer

Number 5.

Assume the customer knows;

Why they need to maintain their vehicle. Nearly 90% of the customers in the service drive have never opened the owner’s manual. (What do you think that number is when applied to Service Advisors and Service Managers?)

  • When it is due for service. If they aren’t reading the owner’s manual, you can bet they don’t know when specific maintenance items are due for replacement.
  • What recalls are open and need to be done. The information age is not all it’s cracked up to be and the average consumer does not know what recalls are open and whether or not they apply to his or her vehicle. Recent news is an excellent case in point as there have been so many recalls issued, it’s difficult to keep track.
  • How much time the repair will take. Just because they have been in before for a LOF, does not mean the customer knows what is happening in your circus that day. They might not want to “hang around” around for a 3 hour oil change.
  • And the worst of all of the “Assumes”… assume the customer does not have the time or the money. Number one reason why service advisors and service departments do not make money. For those of you struggling to be profitable…do this…inform the customer about the needs of their vehicle…and see what happens.

Number 4.

Be a poor listener.

I can’t tell you how many times (a bazillion) I have observed an Advisor or Manager standing behind the counter, staring at the computer screen while the customer tells them exactly how they would like to spend their money. No acknowledgement, no restatement or concerns, no eye contact or head nods…just staring at the screen and typing away…like the screen is going to give you money.

Get your Listening Skills on track and start communicating with the customer.

Number 3.

Forget to put something on the repair order.

Hey, here is a neat idea. Just for comparison sake, I want you to go down to the zoo, find the bear exhibit, climb into the bear cage and then jump on the bear and go for a ride. Because failing to put something the customer said to you on the repair order is a lot like riding a bear. You can’t get off for fear of getting bit and the terror you feel as you buck around like a rag doll is real.

I personally have been guilty of this and I have to tell you, the claw marks from those encounters take a long time to heal, if ever.

If the customer says anything…anything…like “I was driving down the street on the second Tuesday of last week under a full moon going uphill with my foot on the brake and the front lights on…when I heard a noise from the left rear and it sounded like a blender full of ice being thrown off a cliff” and you don’t write it down on the repair order, then get out your chaps and boots, because you are going for a bear ride.

The first thing the customer will ask you when they come back for their vehicle is “Hey, didja find that noise?” and if your answer is “Huh?”, then you my friend, are about to meet Smokey the Bear’s cousin, “No Jokey.”  This bear is a man-eater and will absolutely tear you up one side and down the other. The best way to avoid “No Jokey” is to document, document, document.

Write it down. Get a tech to take a look. Who knows, there might be a blender full of ice stuck under the left rear wheel.

Number 2.

Fail to offer solutions.

It happens all the time. Advisors and Managers fall back on “It’s company policy” and “It’s not us, it’s the manufacturer” or “We are just swamped” excuse immediately, (it’s like watching a soccer player on the field whenever an opposing team player comes within a foot of them), rather than offering solutions for problems the customer didn’t create and are asking for help.

It requires a new way of thinking. Start with just one common request “Do you have a loaner car?”, and answer the real question “Can you get me where I need to go?” and you will be on the way to becoming a Solution Provider. (Hint: Do this with every common question you get in your dealership)      (BIG HINT: Teach every Customer Contact person how to answer these questions with the prepared answers you and your team have developed)

And lastly, Number 1.

Ask the customer “Do you have an appointment?”

This must be one of the all time worst questions to ask a customer…EVER!

Hey, they are in front of you, they need help and they have something called MONEY in their pocket and you want to know if they have an appointment? In the words of one famous politician “What difference does it make?”

It makes all the difference because asking that question puts the customer on the defensive. Let me ask you this. Is it easier to make a sale to a person who is not defensive or one that is thinking that you just made them feel like an outsider? Or is it easier to make a sale to a friend who just needs a little help?

So that’s my Top 5 ways to blow up your customer. (Go here for more Leonard)200K in 200 Days

I’m sure there are many more and some of you won’t agree with my list, but be that as it may be, there is no doubt that using these techniques and processes in your service drive will result in lost sales and lost customers.

By Leonard Buchholz

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

Financial Statement Success Steps

Increase Gross Profit, Increase Net Profit, Control Expenses, Increase Sales.

Chances are you have been living those four financial principles since you became the owner or GM. And if you are a service manager reading this, you have been the willing champion of the preceding 4 financial cornerstones to dealership success.

Can I ask you a question?Looking for answers?

How does it make you feel when you read the statement, and it is painfully obvious to you what needs to be done, yet there does not seem to be anybody on your team following those 4 financial principles?

A little frustrated?

Let me ask you another question. Do you know the 3 steps you can take right now to get your team focused on your goals and get you dealership on firm financial ground? Would you like to take a few minutes and learn how you can get started on your dealership’s financial success?

Ok, here we go.

1st, observe your teams performance and take notes on what they do well and what you would like for them to change. It’s quite simple really. In regards to your Fixed Ops Team, there are 3 areas to observe.

The service drive, the back parts counter and the cashier booth or customer pickup area (for those dealers whose service advisors are cashiering).

Making these observations requires no more than an hour a day for several days in a row. Best times for the service drive is morning 8-10, back parts counter anytime and the cashier booth from 4-6 pm. You will learn a lot about your dealership in a short period of time.

This is a critical step in making the necessary changes. Be prepared to discuss with your service manager/director the specific observations you made. Make sure your write down the things they did well and start with those first.

2nd, make a plan to correct the actions that do not meet the performance standards. If you don’t have performance standards, now would be a good time to establish them.

Get the manager involved by meeting with him or her and defining the standards they are to be accountable for. The number one barrier to success in any organization is the inability of leadership and management personnel to correctly identify performance goals. And if they don’t understand them, you can bet that Andy Advisor does not understand them.

This plan includes your expectations, mid-level and ending goals and should be focused on 3 separate timelines as follows; immediate (within the next 2-3 weeks), 90 days and 180 days. Describe exactly what actions you expect to be taken along with the expected outcomes.

3rd, train on the processes and coach on the performance. It is critical for every customer contact person to have a process for everything from answering the phone to making a service sale. Without a process to follow a team will disintegrate to the highest level of self-knowledge available to each individual team member and then begin to perform their duties at a level they determine to be acceptable rather than the level expected.

At this point they become un-coachable because you cannot correct or change the behavior of an individual who is performing their duties as best they know how in the absence of process and performance standards. Every single action in every successful organization since the dawn of man has been process driven. And when people are coached on their performance in the execution of processes they become successful.

Dealership financial success begins by taking action. These 3 action steps will get you started on making your dealership the financial success you expect.

By Leonard Buchholz

Did you THRIVE or SURVIVE in 2012?

By Leonard Buchholz

Every year about this time we begin to contemplate. What was our final score for 2012? How did we end up? Did we just SURVIVE or did we THRIVE?

For most of you, that reality was written months ago and on the 10th of January you’ll be reading the results you already suspect.

You may even be feeling some anticipation (much like a kid on Christmas morning).

For those of you who spent more time on the “naughty side of retail life” you are hoping for a miracle to turn poor effort and lack of accountability into a Kodak perfect picture moment when you open your present (EOY Financial)…only get ready for the stinky picture…the one with the sad tear-streaked face when you finally tear open your package of coal.

And for the rest of you…”Smile!” click…click…click post it to FB ‘cause you got a HappyFace!

So, the real question is, did you THRIVE in O12 or did you just SURVIVE O12?

Here are 3 Thrive/Survive Reality Checks for you to contemplate right now.

Did you have a significant increase in Service Customer Pay Gross Profit? Let’s define significant. Was your increase at least 20% or more? Before I get a slew of “Hey, we got ___(fill in the blank) and it was significant to us” emails, you have realize that any organization that experiences an increase in Gross Profit, whether they are selling soup or nuts, that is greater than the year before would consider it “significant”, “fantastic”, “beyond expectations”…you get the point.

It just so happens that 20% is considered significant and noteworthy (and all that other stuff) because most of the business world runs on extremely small margins and mucho dinero is made every day in this  country by people smarter than me betting on the tiniest increase and decrease in those margins.

Imagine what a day at the stock market would look like if the Fortune 500 companies all reported a 20% increase in Gross Profits. Wow.

So, yes, 8, 10, even 18% is a nice number when it comes to a Gross Profit increase. But 20% and above is pretty damn significant.

Those dealerships that are thriving…INCREASE! Those that are surviving…SAME! So, I have to ask the question, did you start 2012 with the Goal of staying the SAME or did you want an INCREASE in Service Customer Pay Gross Profit?

Next Thrive/Survive Reality Check is your Service Customer Pay RO Count. In 2012, did you INCREASE your Customer Pay RO Count or did it just stay the SAME?

2012 will be a pretty good Sales year when all the numbers are tallied. Last I read, total sold units in 2012 will be somewhere north of 14 million and represents an overall increase of nearly 14%. 2011 was not all that bad (relatively speaking and compared to previous years) when it hit over 11 and a half million units sold. So, that would indicate that based on these numbers, there are additional Service Customers in the marketplace looking for a Service Facility.

Which begs the question, where did all of the Customers from 2011 and the first 6 months of 2012 go for Service? Was it your Dealership? If not, why not? What is keeping the Customer you worked so hard to sell from coming into your Service Drive for Service?

In every Dealer that we complete a Profit Potential Analysis and review the previous 2 years of RO Counts, I can honestly say that in my experience, there is always room for growth. In fact, I do not believe I have heard any Dealer Principal say “No thanks to increasing the Customer Pay RO Count in our store, we have enough.”

So if you have not had at least a 10% INCREASE in Customer Pay RO Count in 2012, that would be an excellent place to begin your Goal Setting Process for 2013.

Lastly, have you had an INCREASE in CSI or stayed the SAME? Honestly, the CSI Score is without a doubt, the craziest number ever to have been invented to measure a Dealerships performance. Sometimes it can feel like you are trying to hit a mouse in a hurricane with a beach ball.

And many Dealerships consider it a Success just to maintain “Zone Average.” I get it. But the Dealerships that are THRIVING have invested themselves into a new thought process when it comes to CSI…changing the “gottadoit” to the “wantadoit” and the P-step Program “Process,Participation,Prevention” and making a difference in their CSI Score.

SURVIVING means every week/month when the new scores come out, the Service Manager and General Manager have a moment referred to as “Show-me-the-money-or-get-out-the-honey.” Either you hit the numbers or you start spreadin’ the honey. It can be fun in a kinda “You bet your job” sorta way, I guess.

Take a minute on the morning of Jan 10th to consider and ponder and contemplate 2012. Look for other areas you consider vital and important to your business, your Dealership. And take a look at the three areas we just talked about, Service Gross Profit, Customer Pay RO Count and CSI.

As the zero one three business year kicks off in your store and you are starting to write your Goals are you thinking of SURVIVING or THRIVING?

My best guess is you have started to consider THRIVING the year away. Thrivein2013

Would you like a 30% increase in Service Sales?

Lost Sales and Declined Services Customers are in many Dealerships, the largest untapped source of additional revenue. And in most cases, the Sale has been lost because of a few words and not a few dollars.

Trained Advisors Make More Sales!

Advisors who have been trained and coached are the best people to contact those customers, Advisors who are trained, coached and who care are better.

Take John Q. here. He is an excellent example. He has been working at ABC Motors for 7 years. He has an average close ratio at 28%. So, 3 times out of ten, he is able to make the sale on additional recommendations from the Technicians. 7 of his customers have decided to “wait” or “I’ll get it next time” or “I have to talk to my ______” or another of the many excuses we hear every day.

John Q. sometimes calls them back in a day or two or sometimes sends them an email. Most of the time he relies on the CDR/CDM and the DMS system to follow-up with the customer and send them a reminder card or offer them a discount to come back in.

John Q. has been doing this for 7 years. That is around 5000 or so Lost Sales.

What if John was able to convert just 2 more customers per day from a Lost Sale into a RO? His sales would increase nearly 30%. Every Service Manager on the planet would like a 30% increase in sales.

John needs a couple of things. He needs a script to learn and follow until he gets good at following up with the customer and making a case for why his dealership would be a great place for Mr./Ms. Customer to have the repair work completed.

He needs a process whereby he identifies and tracks all of his Lost Sales and CDR/CDM recommendations. He needs Training and Coaching on his results.

And he needs to be monitored. Daily!

Now take the above example and add in the newest software/CRM system that facilitates John’s communications with the customer while explaining the reason they should have that work completed and “BOOM!” goes the Service Sales Increase!

By Leonard Buchholz

Looking for the building blocks of Service Sales so you ca build your Service Business? Go to www.dealerprotraining.com and see how you can start the construction process!

Techno me, Train me or Tank me…which is it?

It is an age old diametrically opposed argument. On one side, we have technology. On the other side, we have personnel.

I can’t sell anything without a great Multipoint Inspection.
I can’t sell anything without a professional Sales Process.
I must have both in order to be effective.

In recent years there has been a migration to technology because we have come to expect that our Dealerships will be modern, fully equipped Service Centers that have the best tools and equipment because that’s the image that has been built through extended advertising.

It’s also why people have come to believe that going to the Dealer is always more expensive.

What has happened (IMHO) is that technology has become a crutch to be used instead of a professional Sales process and effective person to person communication skills. And becomes the scapegoat when the technology does not produce the Sale.

If I had to choose between the two, I’ll choose the professional Sales Process and Communication Skills because our business is still a person to person elbow rubbing “Hey, how are you doing?” smile on your face take care of the Customer business.

If you have a Service Department that is staffed with people and not extraterrestrial aliens or vampires, then they can be trained to present Multipoint Inspections using a Sales Process that produces consistent results.

In fact, over the past 11 years, we have been dong this very same thing in Service Departments all across the country and have helped them produce dramatic and spectacular results…using the same technology (Electronic MPI, Electronic Menus, Electronic write up, On line Appointment Scheduling, CRM Software, you name it…)  that was already in place and did not generate the expected results because they are simply tools when it comes right down to it.

The perfect example of the difference between training and technology exists in our own collective history. Remember OBDII? What happened when “Software Download” and “Electronic Diagnostics” took over our industry? In the beginning, there was a period of time when the plug in connector was viewed as a precursor to volcanoes and the return of the dinosaurs. The end of the world!

We had to train all of our Technicians to use the new technology. When we completed that re-training, our success in diagnosing the vehicle and repairing it the first time increased dramatically. (Which coincidentally has lead to a considerable decrease in warranty repair work.)

But there was still the Customer.

Why didn’t all of this new technology which made concerns easier to diagnose, lead to a decrease in defects per sold unit and increase the reliability (to name a few of the benefits), lead to an automatic increase in CSI, increased retention and more maintenance visits at the Dealership?

Because you can’t train a computer to smile, ask how you are doing, make a friend, build a relationship, remember their preferences, make recommendations based on priorities, remember that they are always your Customer and not a problem to be dealt with and lastly, you can’t teach a computer or build a software application that has Pride and Professionalism.

That is why you still need a smiling, professional Service Advisor.

Hey, you can keep paying those monthly fees for “stuff that don’t work” or give us a call. It’s up to you.