Tag Archives: training

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

The 3 Essential Elements to every GREAT Coaching Session

Here are the 3 Essential Elements every Great Coaching session has! Image

The first Essential Element is a specific Goal you want to achieve from conducting the Coaching session. It can be anything as long as it is specific. Be clear and concise. In fact, the best Coaching sessions are itemized right down to the start and finish times.

Why is this important?

If you are not specific about what you want to change you will find it very difficult to hold people accountable once the Coaching ends and the real work begins.

A great Coach is an excellent observer of how people do things. They are specific when making their observations. They will write down dates, times, the Customers name, what was said…anything they consider important to developing a Coaching plan of Action.

Then, when they have their notes, they describe in detail what they observed and begin the process of deciding how they are going to say it to the person they are Coaching.

By the way, these Coaching sessions are the formal sessions, not the informal “I just noticed ___________ happening” every day moments that Managers and Leaders conduct all the time.

So a Coaching session should begin like this. “At the end of this session I want you to understand how to properly answer the phone and make an appointment when the Customer asks “How much does it cost to __________” on a consistent basis.”

Notice how detailed and specific the Coach has written the Goals for this Coaching session. The more specific you are, the greater your chance of Success!

Secondly, a Great Coaching session is an opportunity to Train. It requires some planning on your part. What Training materials do you want to use? Do you have a script/manual/policy that you can use?

Is there a website with the material on it? Do you have a computer based platform (like DealerPro VT) you can use to demonstrate what you are talking about?

It is extremely important that you decide what you are going to use ahead of time and not try and throw something together while you are talking.

Nothing says “This is really not that important” to an employee more than being unprepared to guide them and Coach them after you have begun the session.

Lastly, have a follow up date. All Great Coaching sessions are continuous.

By having a firm date for review, you tell the person you are coaching how important this is to you and the Dealership. It also gives the employee a sense of value.

They won’t believe that their Success is a priority to you unless you demonstrate it to them. These 3 Essential Elements are the key to your Coaching Success! Follow them to increase employee motivation, desire to perform and watch your results soar!

Need more Training sources? Is your Team in need of a “Fixed Ops Coaching Session?”

Go to www.dealerprotraining.com for more information.

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By Leonard Buchholz

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!

Original or Commodity-part 2

Most consumers have lumped “service”, whether you are a dealer or an independent repair facility, as a commodity. Which means you compete in a market with everyone else even though the market is not a level playing field.

Customer relationship

Customer relationship (Photo credit: Claudio Cicali)

How do you distinguish yourself from everyone else? How do you stand above the rest?

By providing an experience that the customer can’t stop talking about.

While advertising, facility, market position, location, etc. all have a role in the overall service business development and retention strategy, when the customer comes into the service drive, they still need to talk to someone.

And that “someone” in your dealership is the experience.

When your customer needs to have service on their car they think back and remember what happened the last time they took the vehicle in for service and they form an opinion and make a decision.

So the question is, are your personnel providing the level of service that a customer would remember? Would your customer form a favorable opinion of your service department and their experience? Would they make a decision to come to your service drive? Are you the service department they can’t stop talking about?

When you compete as a commodity, you never see the customer because they pass 6 other repair facilities on the way over to your dealership. In their mind they can get the same level of service there as they could anywhere else.

Distinguish yourself from the rest by having the most professional personnel trained to provide the highest level of service and you will be above the commodity crowd.

Not sayin’ this is happening in your Dealership…

In many Dealerships lack of Profitability in Fixed Operations starts with just 3 processes that are not getting done with every Customer that comes in the door.

Everything starts with building a relationship. It sounds easy, we say it all the time and there is not one Sales book, cd, mp3…course…whatever that does not have some chapter on building relationships.

The Service Department is no different. Studies show that Customers who do not feel taken care of find a reason to do business elsewhere.

Not sayin’ this is happening in your Dealership…

Customers are coming into the service drive and not getting a walk around. It’s true.  Just go stand unobtrusively and watch the service drive for a couple of mornings.

How many Customers are coming in and not being greeted and not getting a thorough walk around? Let’s say for arguments sake that 50% of your Customers come in the door and are properly greeted and get a walk around.

How many ROs does your Service Department write per day?

In front end language, what if 50% of the “ups” that come in were not greeted or presented with an opportunity to purchase a vehicle?

How long would before that Sales Manager was kicked to the curb?

So, if 50% of your Customers do not get an opportunity to have their vehicle thoroughly inspected and to have repairs completed while in your Service Department, what is this doing to your Sales per Repair order?

How many Sales organizations can stay in business with 50% of the Sales opportunity taken away before they even present a product or service to sell?

Hey, maybe in your Dealership it’s only 30%! Great News!

So after not getting a walk around the vehicle does not get a multipoint inspection. Why? In some stores (not sayin’ this is happening in your store) Service Advisors and Technicians have circumvented the process or stopped doing it altogether.

And the Service Advisors and Technicians in those stores can justify why.

Here are the Top 10 reasons “we don’t do it.”.

“They were just in.”

“He/She never buys anything. They are just a mooch.”

“There are too many cars in here today.”

“I didn’t have time.”

“The Customer told me not to do it.”

“I ran out of inspection forms.”

“They are a waiter.”

“It’s too (fill in the weather blank).”

“It takes too long.”

“The Advisor can’t sell it anyways, why bother.”

So the one person your Dealership has been trying to attract comes in (your Customer) and does not get a multipoint inspection because an employee decided not to do one?

Whose name is on the side of the building?

And probably the number one area that Profitability is lost is on the phones. (not  sayin’ this is happening in your Dealership)

People are calling to come in and not being handled properly. You can hear it for yourself. Just go stand by the Advisors workstation and listen.

Call after call coming in and appointments not getting made. It’s not because they don’t want the appointment, it’s because in our industry, everyone assumes that basic phone handling skills are a pre-requisite for becoming an Advisor.

And everyone has a different level of skill. Some do it right, some do it sometimes and some not at all.

Probably the single biggest impact we (DealerPro) have in a store right away is getting everyone answering the phones properly. Even in our “technosociety” people still call before they come in. And if the person answering the phone is not trained to do it properly, why would they come in?

If you are looking for ways to get more in the bank from your Fixed Operations then you might want to take a look at these 3 processes.

Not sayin’ that these are not being  done in your store…

See us at the NADA! Booth #2772. Stop by and register for the $200,000 Training Giveaway!

“An Enemy Called Average”

The title of this article comes from the book “An Enemy Called Average” by John Mason. The purpose of his book is to get you from where you are currently to where you dream to be. Mr. Mason says “Break the chains of mediocrity and then live the life you dream of.” This of course can apply in your personal life as well as your professional one.

Far too often in our industry we have Dealers, General Managers, Service Directors, etc. who focus on and measure themselves in terms of the “average” dealer. Here are some examples:

“The average dealer is grossing $700 PRU in F&I income”

“The average salesperson sells 11 units per month

“The average Service Advisor sells 1.4 HPRO”

“The average CSI for my region is…..”

“The average …….for my 20 Group is ………”

Does this sound familiar to you?

Additionally your manufacturers also provide composites and reports showing the average this and the average that so you can compare yourself to what’s average.

Here‘s a simple exercise for you complete after reading my article. When you get up tomorrow morning ask your family to sit at the kitchen table for a brief family meeting before you go off to work and before the kids are off to school.

Stand up in front of your family and say the following: “It looks like it’s going to be an average day here in Hometown, U.S.A., and your average Dad and your average husband is going to his average job to put forth an average effort to maintain my average paycheck so I can support my average kids and my lovely average wife.

By the way kids, at school I want you to focus on getting average grades and you don’t really need to put forth the effort to be a great student so a “C” will be just fine.”

Does that work for you? How’s that average wife comment going to work out for you? Are you excited about holding that meeting?

If you are a manager how about you ask to meet with the Dealer and say the following: “Boss I just wanted to let you know that I think you are an average Dealer, so I’m going to give you an average effort today so I can produce for you some average results and manage my average department.” I bet nobody is taking notes on this one!

Let’s not forget what average really is. It is nothing more than a reference point.

Average means you are the “Worst of the Best or the Best of the Worst!”

Is that where you really want to be? I hope you answered NO WAY!

Well if that is true then why is it that when I speak to hundreds of dealers across our country I hear comments like “Well Don the average HPRO for my 20 Group is 1.4 and I’m averaging 1.5 so I’m doing a pretty good job.” No Sir-you are still hanging around with that “Best of the Worst crowd! Why do so many of you use the word average like it is a good place to be? Do you really want to be a straight “C” Dealer? Does the term mediocre Dealer appeal to you? I think not.

So how do you go from being average to becoming a Top Performer?

It all starts with one word-Commitment.

Are you committed to change? Are you committed to leaving your comfort zone? Are you committed to achieving different results? Think of it this way—when it comes to making “Bacon & Eggs” the chicken was a participant but the pig was totally committed.

If you, the Dealer, are not totally committed then nothing is going to happen differently. As Zig Ziglar says “You have the perfect processes in place to get you exactly what you got last year.” Get committed to change.

Next you must establish SMART goals. Specific-Measurable-Achievable-Realistic-Time based.

Here is an example: “I want to increase my retail HPRO by .5 over the next 6 months”

Specific: Yes it is—retail Ro’s only—increase .5 HPRO (Don’t forget to calculate how much specific gross profit you will produce on parts as well as labor with that extra .5 HPRO)

Measurable: Yes it is—your DMS can print a Service Advisor Performance Report DAILY showing the HPRO for each Advisor

Achievable: Not sure—what are my Advisors going to do differently to achieve different results? If they could sell the extra .5 HPRO why haven’t they already done so? Do they have a good menu to sell from? Do they have the proper communication skills and processes to make a feature benefit presentation to your customers? Are they willing to leave their comfort zones? Are they committed to change? (Chickens or Pigs?)

Realistic: Yes it is—since the average dealer is averaging 1.4 that means a lot of dealers are doing much better than 1.4 and since there is a multitude of dealers out there averaging 2.0 to 2.5 HPRO then another .5 is very realistic.

Time Based: Yes it is—you have 6 months to decide what you are going to do differently, what new processes will you implement, how will you train everyone on new skills that will increase their sales performance and provide the customer with a higher level of service?

Once you achieve your SMART goal then move on to the next one. Long term success is a journey not just a destination. That first SMART goal is just the first leg of your journey. Do not allow yourself to become complacent because you will gravitate back toward mediocrity.

John Mason in his book  “An Enemy Called Average” states: “Mediocrity is a region bound on the north by compromise, on the south by indecision, on the east by past thinking and on the west by a lack of vision.”

Every department in your dealership must be a profit center for the dealer who wants to thrive and not just survive in this very competitive industry of ours. The aftermarket service providers currently have over 80% of all the parts and service business in America. Don’t you think it’s time we started taking it back?

Don Reed-CEO

DealerPro Training Solutions

Exceeding the Expectations

What would a Service Professional do?

A Professional understands their Customers Expectations.

Now this has got to be the easiest “no brainer” post you
have read in years! You would think that every person who works in the Dealership has heard of Customer Service (here’s a little hint: WE ALL DO) and would take the time to understand their Customer expectations. And then try to EXCEED them!

You would think.

And every day in the field at a Dealership there is a couple of moments where  there is the “I have no idea” look on people’s faces when asked about what their Customer came in for, what was the reason for their visit, why are they
here, how are we helping them, what’s the story etc….it’s like a mystery novel.

The reason is they have become order takers. This new
breed of Service Advisor has been trained by corporate America all of their lives with “instantology”,  which  translated means “Those who use technology to communicate by using the smallest amount of brain activity required to actually have meaningful interactions with their Customers.”

This in turn has led us to a new Training term called “youdon’treallyneedtoknowhow” in which Customers are regularly greeted and serviced by non-communicators who cannot distinguish between a request for service or a statement of concern unless it’s printed on the touch screen menu in front of them.

This collection of “Service (aacckkkk, cough cough)
Professionals” are then left to founder and fumble with your Dealership Customers (you know, the “lifeblood of the Dealership,  our main focus, why we are open”…etc…you’ve heard all of that before, right?) with more skills in “instantology” than in COMMUNICATION and CRITICAL THINKING!

This has reduced our once world renown model of Service Excellence we
called the “American Way of Doing Business” to a misdirected application called “Someone told me to stand here and talk to you.” In turn, this has increased our Customers chances of having to do business with
someone who has little desire and are completely clueless how to deliver Exceptional Customer Service because it does not come with
instructions on the box.

And because we choose to do business this way we find ourselves in constant need of reminding our Service “Professionals” what they are supposed to do and why they are supposed to do it.

The true Professional Service Advisor not only knows what his or her
Customers expectations are, they EXCEED them. They are anticipatory because
they have taken the time to study their product and their Customer. And they truly understand Service. More importantly, they understand how the Customer could EXPECT to use their vehicle in their daily lives. Lastly, they understand their Customers EXPECTATIONS when they come in for Service.

How do they know these “magical things?”

The true Professional Service Advisor has taken the time to become an
excellent COMMUNICATOR and only relies on “instantology” for storage and
processing of the Customers information as a means of assistance and not as a
means of conveyance.

Basically folks, no matter how good you are at “instantology”you can’t get the computer to pull out its wallet no matter how hard you try.

When you have taken the time to really understand and
anticipate your Customers Expectations by asking if they have been met one on one and by becoming a true Communicator through study and application will you become a True Service Professional.

Be Professional.