Tag Archives: increase service absorption

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

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Where does Service Sales failure start? In the Service Drive of course!

In every dealership that I visit that is struggling with increasing Sales per Repair Order, performing a walkaround  is the area that the Advisors do not do well, if at all.

Recently, I was observing a service drive when a customer pulled up in a car and the advisor looked up from the desk and and said “Oh, look…she is just sitting there.” And for the next 3-5 minutes, the advisor sat at her workstation and waited…until the customer got out of the car and made her way into the service reception area. The advisor did not get up and go outside to greet the customer, make them feel welcome or offer any assistance. Is there any wonder why this store is struggling with increasing service sales and declining RO count?

We have all been customers in dealerships, repair centers, restaurants, cleaners, hotels… you name it…and there is nothing like a customer service person who gets it…from the initial greeting all the way through the final payment. And like many of you…I spend more money when I am taken care of.

Treat me like a number…give me grunts in response to questions…don’t use common courtesy…be in a hurry to get rid of me…don’t explain the process and expect me to guess what is happening next…and make me feel like an interruption to your day…is there any wonder why some Advisors (and Dealerships) struggle? I wouldn’t spend any money there and neither would you.

A walkaround is the very first tool in every Advisors toolbox to start building the relationship and introducing the customer to the maintenance and repair process. Without it, the customer might as well be at the DMV or the TSA line at the airport or the checkout line in the supermarket. It’s all the same until the person delivering the service decides to do the right thing.

And that is the fundamental difference between the checkout line and the service drive… one caring professional human.

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

“Missed it by that much”

There is an old saying carpenters use. “Measure twice, cut once.”

I recently went to a Dealer to present DealerPro and our Performance Driven Training Program and guess what…I measured once and missed the cut.

I didn’t miss by much. About a 1/16th of and inch or so. When you really think about it, on a small scale, 1/16th is not that much at all. It really does not seem that big a deal.

But miss by 1/16th of an inch when you are calculating something like the square footage of your home and taxes are involved and suddenly you remember things like high school algebra and can quote complex mathematical theories.

The point I am making is everyday we all say things to ourselves like “Oh, it’s ok if I don’t give that Customer a menu because I know that they don’t buy anything” or “I’m not going to worry about that multipoint inspection. They were in just a few months ago” and we give ourselves a pass.

Why?

It’s just a little bit and it won’t make a difference. Right?

I flew 200o miles to present our program to a Dealer that was not prepared to see me because I failed to follow my own process. I got busy with other things and did not “measure twice, cut once.” Can you guess the end result?

It’s never the big disaster that kills a deal. Big disasters almost always start with small decisions that don’t really seem that important when you are making them.

Deciding not to personally call this Dealer and get him on the phone even after we had talked a couple of times, did not seem that big a deal. I mean, everybody reads their email…right? And everybody can read and follow directions…can’t they?

It was only a little shortcut. And it caused a huge miss.

Are your Service Advisors taking those little “shortcuts” because in their minds “it’s just a little thing” and nobody will notice? Are you allowing your Service Team to circumvent, use “choice implementation” or refuse to follow processes that are in place? Are they “missing the cut?”

Take the time NOW to review everything you are doing that is working and  everything that is not working and find out why.

Grandma dropped her car off and did not get a multipoint inspection? Why?

Mr. Jones came in for a recall and was not offered a menu? Why?

Billybob the local twice a month customer came in and was not greeted properly? Why?

Silly Sally the Service Advisor did not complete and walk around on her 10 writeups today? Why?

Ms. Coffeecellphone came in and was completely taken care of and even wrote a letter to the owner about her recent service experience. Why?

It’s not just about what is not being done. It also about what is being done correctly.

Find out what is being done correctly… train, show,coach, review, train, show, coach, review, lather, rinse, repeat daily for maximum results.

Do this enough and missing by just a 1/16th becomes a footnote in your Success Story.

Me, I’m back to measuring twice. I hate missing the cut. Don’t you?

(send me an email with the name of the famous tv show that the title of this blog post came from and I’ll get your Service Advisors signed up for a free e-learning series lbuchholz@dealerprotraining.com)

Comfort Zone vs Accountability

As a Dealer, did last year bring you the return on investment that
you expected?

As a General Manager did you meet or exceed your net profit
projections
for the year?

If you are a Fixed Operations Director did you increase your customer pay retail sales for parts and labor over last year?

For all three of you, is your Service Absorption rising year over
year? If any of your answers were “NO”, then you must ask yourself…why?

To begin with, your financial statements will show you where the opportunities for improvement (conditions) are but what they won’t show you is how to fix them. To fix them you have to know what’s causing the out of line condition.

Once the cause is determined you can then make the corrections
necessary to properly bring the condition in line with industry guides. For those of you who have ever written a repair order you probably recognized this as the “Three C’s”, Condition-Cause-Correction.

The Technician needs the Condition to properly diagnose the Cause which then enables him to make the necessary Correction. It’s no different for the Dealer, the General Manager or the Fixed Operations director when it comes to making money.

So, now that you have studied your financials carefully to determine the conditions that prevented you from attaining your respective financial goals, let’s determine what the cause might have been. I believe the culprits here are Comfort Zones and Accountability.

Everyone in your dealership has a comfort zone just as you do. The issue is not to get rid of them but to simply move them again and again until you achieve the results you’re looking for and then move them again!

This is important because it enables you to focus on the performance
of your employees. Next, you must hold them accountable for their individual performance.

Currently, most of you are doing that in the New Car, Used Car and F&I departments, which of course is where you devote much of your time and energy anyway, but you fail to do so in the Service and Parts departments.

Allow me to give you some examples to clarify what I’m talking about:

  1. If I am a Salesperson and I sold an average of 5
    units per month last year, what are you going to do with me? Answer: Train me how to sell 10 units or more per
    month or replace me with someone who can.
  2. If I am a Service Advisor and I sold an average
    of 1.5 hours per customer pay repair order last year, what are you going to do with me? Answer: I have a job for life!
  3. If I am a Sales Manager and my Sales Team averages 5 units per month and my gross per retail unit is at $700, what are
    you going to do with me? Answer: Train me how to average 10 units per Salesperson and gross $1500 PRU or replace me with
    someone who can.
  4. If I am a Service Manager and my Service Team averages 1.5 HPRO and my Technicians’ productivity is at 80%, what are you
    going to do with me? Answer: Leave me alone because the other dealers in your 20 Group are about the same!
  5. If I am your General Sales Manager and my Sales Team
    averages 5 units per salesperson, $700 gross PRU, $200 F&I gross PRU and loose $600 per wholesale unit, what are you going to do with me? Answer: I wouldn’t have lasted 6 months let alone a
    year!
  6. 6.    If I am a Fixed Operations Director and my Parts and Service Team averages 34% in retail parts gross, 62% in labor gross, averages 1.5 HPRO, shop productivity of 80% with a declining repair order count, what are you going to do with me? Answer: Thank you for being back there because I sure as heck don’t want to fool with that stuff!

 

Are you starting to see my point?

Most Dealers and General Managers will hold their Sales Team accountable
for their performance on a daily, weekly and monthly basis and make any
adjustments (moving their comfort zones) on an as needed basis NOW!

Meanwhile their Parts and Service Team remain in their comfort zones to continue to dwell in the land of “underachievers”.
Why does this happen?

My belief is that most Dealers and GM’s are outside their comfort zone in the “back end” of their dealership since their roots are in the “front end.” What can a dealer do to enable him or her to leave their comfort zone and cross over the demarcation line to the back end of their business?

  • Measure the performance of the people you intend to
    manage.
  • Your people must know that you are measuring their
    performance.
  • Their performance will be compared to industry
    benchmarks.
  • They must understand that they will be held
    accountable for achieving or exceeding those benchmarks.

Simply say what you mean but more importantly mean what you say. Again, most dealers don’t hesitate to do this in their Sales and F&I departments. Start  making it happen in Fixed Operations.

Now I want you to rid yourself of the usual whiny excuses that I here from dealers when I’m speaking to 20 Groups, Dealer Associations, Dealer groups or individual Dealers. It doesn’t matter whether it’s north, south, east, west or rural versus metropolitan. I hear this all across the U.S.,
Canada and theUnited Kingdom:

“Don, you don’t understand,
my market is depressed.”

“Don, you don’t understand,
my Service Manager has been with me for a
long time.”

“Don, you don’t understand, I
can’t find an Advisor that’s any better.”

“Don, I don’t want to run off
my customers by up selling”

Well folks, here is what I do understand.

A depressed market has nothing to do with accountability for performance.

Time on the job does not dictate a good performance on the job.

If you can’t find better people, look harder because they are out there. If you or any of your people are afraid of “running off customers from up selling” then you need to get out of the retail business of selling parts and service. (By the way, the
aftermarket already has 70% of your customers’ maintenance)

Don’t you think it’s time to get out of your comfort zone and make the return on your investment that you deserve? Please, drag your Fixed Operations Team out of their comfort zones and start holding them accountable! Once they stop kicking and screaming they will all make more money, they will be happier and your customers will realize you have the best dealership in town.

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity.”    –Peter F. Drucker

Don Reed

CEO

DealerPro Training Solutions

Pro Solutions-Pro Results”

A recent Fixed Operations Study and what it reveals about Service Sales, Profitability and more…

Recent studies show that Service Advisors that hand out menus during the write up process experience an increase in Customer Maintenance Sales. The study also shows that this corresponds to an increase in the Service Advisors pay.

These recent studies also show that Technicians that completed a Multipoint Inspection on every vehicle flagged more hours than Technicians who did not. An interesting side note to the study, Technicians who completed the most Multipoint Inspections made the most money.

Furthermore, the study revealed that Professionally Trained Advisors had higher CSI Scores than Advisors who received little or no Training at all. In fact, during the study, Customers preferred talking to a monkey rather than an Un-Trained Un-Professional Service Advisor by a margin of 5-1. (Note; no monkeys were harmed in the study and were paid in peanuts for their participation, same as the Un-Trained Advisors)

Customers  also preferred to have their vehicles repaired in one visit rather than having to return to the Dealership for repairs later due to an Un-Trained Un-Professional Advisor not being able to reach them during the day to complete the repair process. The Advisors who asked for a Pre-Authorized Repair Amount out serviced and outperformed the monkeys…er…Un-Advisors by a margin of 100%.

Additionally, Dealerships with Trained Professional Advisors had higher Gross Profit amounts than other Dealers who have monkeys… er…Un-Advisors.  This was not too surprising to the Professional Advisors and Service Personnel but came as a shock to the monkeys…er…Un-Advisors who blamed the results on “demanding customers and high management expectations.”

One other aspect the study revealed was that Dealers who increased their Gross Profit had a Net Profit Increase as well. And interestingly enough, those same Dealers had an increase in Service Absorption.  And the most telling aspect of the study revealed that Dealers that had an Increase in Gross Profit, Net Profit and Service Absorption stayed in business longer than those who did not.

One final note on this recent study…all of the Dealers that had monkeys…er…Un-Advisors working in the Service Department have closed.

EOM and Service Absorption

At the end of this month are you having a conversation with your Service Manager or Service and Parts Director about Service Absorption?

Does it sound like this?