Use the “3T System” to make more money in Fixed Ops.

Making more Money in Fixed Operations is everyone’s goal.

Think not?

Just go tell your Dealer Principal that this month you’ve decided that making money is not important… and see what happens to you, Mr. /Ms. Jobless.

Making money is much easier when you use a system to do it and it is much better than just wishing for more Money. Use the “3T System” to drive more dollars to the bank.

The first T stands for “Tell Everybody” what you want to accomplish this month. It is also called “Create a Compelling Vision” and the more Compelling it is, the more people are drawn to it.

Additionally, it must be specific, memorable and most importantly, reinforced at every opportunity!

It cannot be the same old tired “We need to do better or else!” stuff. They have already heard it before.

If it is, people will just ignore it. Start the month off with a kickoff meeting detailing exactly what it is you must accomplish, what role each person has and how you will be holding people accountable.

Remember, the more specific you are, the better your results!

The second T stands for “Teach me Something New.” Everybody wants to be part of the newest, latest and greatest.

New is fun…New is exciting…New is way better than “old and stale.” Let me give you an example.

When was the last time a you offered to make a sandwich for a guest in your home, and they said to you “Please make mine using old stale bread, month old lunchmeat and could you put some expired mayonnaise on it”?

Not gonna happen. It’s the same way in the Service Department.

People want to feel like they are part of a new challenge and accomplishing new things. Don’t make them a stale old sandwich and expect them to eat it.

Teach them something new about their job, the Customer, the Dealership…anything!

And the last T stands for “Train to Win!”

Bobby Jones said it best when he said “If you fail to get the proper instruction you’ll only get better at making yourself worse.” Train to Win means the best Training by the Best Method yields the Best Results!

Train your personnel using the Best Methods available (like DealerPro VT) and you will consistently improve and reach new Goals!

Looking for a Training Platform accessible 24 hours a day 7 days a week? Is on the edge of the latest and greatest? Is recognized by the NADA? Check out DealerPro VT. Click on the link below to get started!

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Get “What You Expect” when you Crunch Your Service Numbers

“What You Expect”

(This is a follow on blog post from a previous post titled “Crunching Your Service Numbers.”)

This is part of the daily “Must Do” list for every Service Manager. You cannot go through the day without checking progress. To do so would  be a sure recipe for disaster. Just ask the Captain on any ship or the Pilot of any airplane.  They will not start the engines without a plan much less leave the harbor or take off from the airport.

As a Service Manager, you need to do the same.  

There are several Daily Checks the Service Manager must make.

As a refresher, here are the Daily 5 mentioned in a previous post.

1. The Service Advisors HPRO from the day previous. (Hours Per Repair Order)
2. The Service Advisors EFL from the day previous. (Effective Labor Rate)
3. The Service Advisors Labor Gross Profit Margin from the day previous
4. The  Service Advisors Parts Gross Profit Margin from the day previous.
5. The Service Departments overall results in HPRO, EFL, Labor and Parts GPM tracking for the month.

 And here are 5 more.

1. The Technicians Total Flag Hours.
2. The Technicians Productivity. (Flag Hours vs Clock Hours)
3. The Technicians ASR Ratio to Number of Repair Orders.
4. The Technicians Comeback Ratio.
5. The Technicians overall Monthly Tracking for Hours Produced, Productivity, ASR and Comeback Ratio.

Here are the standards. 

1. Total Technician Flag Hours. An efficient, trained Technician should, at a minimum, flag the same amount of labor time as they are clocked in. This means if they are clocked in for 8 hours, they should flag 8 hours of Labor Sales. Anything less than that is reason to investigate.
2. Technician Productivity is the amount of Flagged Hours compared to the amount of Clock Hours. If the Technician clocked in for 8 hours and flagged 8 hours of Labor Sales that would mean they are 100% Productive. If they clocked in for 8 hours and flagged 10 hours of Labor Sales that would be 125% Productive. (A note regarding Production and Efficiency. It is  better to look the Technician as a “Producer” rather than measure Efficiency. At the end of the month, you won’t be able to deposit Efficiency.) In a Domestic Store this number should be between 110-130% and an Import Store this should be between 120-130%.
3. Technician Additional Service Requests to Number of Repair Orders. If your Technician is completing an Multipoint Inspection on every RO, and they are not the Used Car or Pre-Delivery Technician (or any other “Specialty Technician”),  then the Ratio should be between 60-80%. If it is less than that on a consistent basis, the Technician will need to be instructed on conducting a proper vehicle Inspection. Remember, the vehicle is what it is. If it leaks, it leaks. If it is broken, it’s broken. If it is worn out, it’s worn out. There is never a need to write down on an MPI anything other than what is actually  physically wrong with the vehicle.
4. The Technicians Comeback Ratio. This is a standard that many Shops and Managers have as a moving target based on the Technician they are reviewing. There must be a bottom line number that apples to everyone. The Standard is 10% or less. And 10% is a lot if you are the SA or the Manager dealing with the upset Customer who had to come back. Additionally, many shops do not accurately track this. The Standard is that the Customer is returning to the Repair Facility for a repair to the vehicle that has been previously diagnosed and repaired by either replacing a part or making an adjustment, repairing any component, completing a service or any other service or repair in which the Service Advisor and the Technician advised a Customer to have a repair, adjustment or service completed.
5. The Monthly Tracking for Hours Produced, Productivity, ASR and Comeback Ratio are numbers the Service manager should be looking at Daily and comparing them to months previous. It will help identify trends before they become problems. It also is an excellent tool to Counsel and Praise Technicians and Service Advisors.

Add these to the previous Daily 5 and you should be on track to get “What You Expect.”

Want to hear more about the “numbers” and where your Dealership stacks up? Send an email to lbuchholz@dealerprotraining.com or call 888-553-0100 for more information. Check us out on facebook and twitter. Watch Don Reed videos on youtube.

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.

Crunching Your Service Numbers

Information (Photo credit: heathbrandon)

It is not enough to measure.

That’s right, I said it.

Measuring your numbers is a waste of time if you don’t do anything with the numbers you measured. In order for the numbers to mean something, you must do something with the information they provide. It is not enough to just gather and store the information.

“You must measure what you need to manage”…..and….”you must inspect and evaluate the efforts of your people  daily” says Don Reed, CEO of DealerPro Training Solutions.

So, what do you need to measure so you can manage the Service Department?

Lets look at the 5 Basic Daily Measurements.

1. The Service Advisors HPRO from the day previous. (Hours Per Repair Order)
2. The Service Advisors EFL from the day previous. (Effective Labor Rate)
3. The Service Advisors Labor Gross Profit Margin from the day previous
4. The  Service Advisors Parts Gross Profit Margin from the day previous.
5. The Service Departments overall results in HPRO, EFL, Labor and Parts GPM tracking for the month.

This is really all the information you need on a daily basis to see where you are for the month and what direction you are headed. Are there additional measurements?

 Yes, of course.

Every Dealer Principal, General Manager and Service Director look at different numbers. And, you need to measure more than the Daily 5 to keep the Service Department on track.

Crunching the Daily 5  helps keep the focus on the big picture and points to areas that need attention. However, if you are just gathering information and not making adjustments based on the what the numbers are telling you, you got a problem.

It’s like standing in a darkened room with your hand on the light switch and complaining that you can’t see.

Of course, this does not make any sense at all. Yet, that is exactly what you are doing when you have the information available and then choose to do nothing with the information you have collected.

And you need to have a standard to measure against. For the record here are the standards for the previously stated Daily 5.

1. HPRO should be at 1.5 or greater. Anything less requires immediate attention and intervention. In order to get to 2.0 and above you need to have daily interaction and repair order review with your Service Advisors.
2. EFL should be at 90% of door rate. Anything below 75% requires immediate attention and intervention. In order to get above 75% you must inspect and review repair orders daily with your Service Advisors.
3. Labor Gross Profit Margin at 75% of Labor Sales. Anything less than 60% requires immediate attention and intervention. In order to get above 60% you must inspect and review repair orders daily with your Service Advisors.
4. Parts Gross Profit Margin at 45% of Parts Sales. Anything less than 30% requires immediate attention and intervention. In order to get above 30% you must inspect and review repair orders daily with your Service Advisors.

And of course for the overall picture, you must take a look a decide if you need to make adjustments based on what the entire picture is really saying. These measurements are really signposts along the path to increased Profitability.

Measuring and crunching your Service Numbers are not that difficult if you know what you are measuring, why you are measuring and more importantly what you are going to change to get to the numbers you need. Use these Daily 5 as a baseline. Interact and review daily and you’ll find yourself “crunching the numbers” for results.

If you are wondering how you “measure up”, send an email to info@dealerprotraining.com or call 888-553-0100 and schedule an evaluation of your Dealerships Fixed Operations and Profit Potential.

Related articles

• There is too much waiting (dealerproblog.com)

Service Absorption Rule #2

“Maintain your hours per C/P Repair Order (RO) at a minimum of 2.5” says Don Reed, CEO of DealerPro Training Solutions.

If you are currently at the national average of 1.5, then this might seem a bit of a stretch.

Actually, anything is a stretch when it’s as big as an elephant. And we know how to eat an elephant, right…..one bite at a time.

So, let’s break “How do we get to 2.5 HPRO” into bite sized pieces.

The pursuit of HPRO requires well trained personnel. This means everyone. 

 Who gets Training and what kind of Training?

Any person that has customer contact (read everyone in the Dealership).

Sales Training would also be on the ‘Must Do”  list along with Phone Sales Training, Proper Greeting Training, (believe it or not) Courtesy Training, a forgotten bit of Training called ” Our Policies and Procedures” Training and maybe some “Goal Setting and Planning” Training, to name a few areas for consideration.

First, if I were to survey all of you and ask if Phone Training would be an important part of the training curriculum at your dealership, I suspect most of you would say “Yes.”  And based on that answer you would think that a business that relies so heavily on the phone would have Phone Sales or Phone Skills Training on a regular basis.

Wrong.

All you have to do is call your Dealership. In just a minute or two  you can determine if Phone Skills are up to standards where you are.

Call your parts department and ask about a special order part. Call the service department and ask to speak to the owner. See how long you are on hold. Call the receptionist and ask to speak to the detailers. Call and ask for a shuttle driver to come a pick you up. Call and try to schedule an appointment for service.

Was it easy? Was it professional? Did the person on the other end of the line make you feel like doing business with the Dealership?

The point is, it’s not only the day to day calls it’s also the unusual, the “you called parts and you really want sales” call that tells the tale. And if you do not have your normal phone traffic handled properly, what do you think your Customer is experiencing when they call into the Dealership? 

Second, conduct regular Sales Training.

Who needs Sales Training? Sales Training is for anyone who could have contact with the customer. Does this sound familiar?

Everyone in the dealership is a Salesperson. The greeter who sells friendliness, the parts counter person who sells a part, the service advisor who sells the labor….everyone is a Salesperson and yet why is it only the people in the Sales Department get sales training? 

Lastly, maintaining 2.5 HPRO is a direct result of what you measure. You can conduct phone skills and sales skills training, and if you never spend a second listening or critiquing to those whom you have just trained, you have wasted your time.

What we measure determines what we focus on. And we measure progress not only by tracking results, we also continually ask questions about what we are tracking.

 If we consistently ask our advisors “You wrote 12 CP ROs yesterday and only booked 8 hours. Can you tell me what happened?” after awhile, they will be prepared to answer that question before you even ask it, which means they are focusing on…you guessed it…Labor Hours per RO.

Try it. Start asking your advisors about something specific for a week and see what happens.  Pick HPRO or “How many appointments for tomorrow did you make?” or “How many multi-point inspections had recommendations today?” or “I noticed Technician Bill had 3 good inspections. How did the sales for those inspections go?”

Asking good questions is part of measuring for results.

Keep this in mind. Maintaining 2.5 HPRO is a lot more difficult than attaining 2.5 HPRO. Once you get there, you will need to monitor Training needs and Measure for Results on a consistent basis.

 Just take it one bite at a time and before you know it, you will have 100% Service Absorption.

If you want to find out how you stack up, send an email to lbuchholz@dealerprotraining.com and schedule a Profit Potential Analysis.  You don’t know what you are missing until you inspect what you are expecting.