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Tom Hopkins

Questions Are The Answer

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When you work with a new car prospect, don’t you agree that you should try for several minor yeses before you go for the “big yes” buying decision? It makes sense, doesn’t it? It would be helpful to learn a specific technique that would begin a string of “yes” answers, wouldn’t it? You’re probably getting tired of all these questions, aren’t you?

If you answered “yes” to these four questions, you’ve just proven the effectiveness of the “Tie-Down” questioning technique. Let me begin by defining the term “tie-down.” A tie-down is a question at the end of a sentence that calls for a positive response.

Here are some examples:

  • “A reputation for excellent service after the sale is important in making this decision, isn’t it?
  • “I can tell you are happy to hear that we have a wide range of financing options, aren’t you?
  • “You can see how our evening service hours would make your life easier, can’t you?

This technique works most effectively when you tie-down a positive statement about the benefits of your services that you know your prospect needs. The key is not to over-use them so your prospect won’t suspect you’re using a technique.

Here are 18 standard tie-downs that you’ll find useful.

Aren’t they? Don’t we? Isn’t it?
Aren’t you? Shouldn’t it? Isn’t that right?
Can’t you? Wouldn’t you? Didn’t it?
Couldn’t it? Haven’t they? Wasn’t it?
Doesn’t it? Hasn’t he? Won’t they?
Hasn’t she? Won’t you?? Don’t you agree?

You don’t want to use too many of them with any one client, just enough to get the yeses flowing. Experiment with your existing presentation until you find a comfortable number of tie-downs to use without sounding repetitive.

Another way to keep these tie-downs from sounding overused is to use them in other forms: “Inverted,” and “Internal.” I’ll use the same example as above to demonstrate them.

Standard:

A reputation for excellent service after the sale is important in making this decision, isn’t it?

Inverted:

Isn’t a reputation for service after the sale important in making this decision?

Internal:

A reputation for excellent service after the sale is important, isn’t it, in making this decision?

The inverted and internal tie-downs allow you to hide the fact that you’re using a technique while adding warmth to your statements. By utilizing all three types, you’ll have a good mixture of them to build into your presentation. Once you’ve learned them and worked with them, use of the tie-down will become a speech habit that will improve your business and your earnings.

Another form of the tie-down you might consider using is the “Tag-On Tie-Down.” It can be used in a variety of ways. The simplest is to tie-down a positive statement your prospect has just made. For example, if they say, “Having a good extended warranty is important.” You would say, “Isn’t it?” They make a positive statement and you agreed, but asked for another positive statement. The statement being the word, “yes.”

Another useful questioning technique is the “Alternate of Choice” technique.

An alternate of choice question is one that suggests two answers, either one will confirm that your prospect is going ahead. The easiest example of this is getting an appointment. The average salesperson will say to their prospect, “When can we get together?” This allows the prospect to say, “Never” or, “I’m too busy just now, I’ll call you later.” Now, that won’t get you an appointment today, will it?

In using the alternate of choice question you would say, “I have an appointment opening this afternoon at 3:00, or would 4:30 be more convenient for you?” You’ve given your prospect two choices, one of which they will most likely agree to. If they cannot make either appointment, they’ll tell you and you can counter with another alternate.

This is also a good technique to use when you try to get a delivery date from your prospect once they show signs of going ahead. “You mentioned needing to remove some things from your garage in order to park your new vehicle in there. How soon would you want to take delivery of your new truck? Now? Or, would later this afternoon be better?” Just remember to use it whenever you have two alternatives you can give to your prospect, and either one means the sale is proceeding forward.

These two simple questioning techniques are the first steps to turning your existing presentations into positive momentum builders. Please remember, a quick reading of these techniques will not do. You need to read them, study them, learn them, and practice them until they become a natural part of your speech. If you have to stop and think before using these techniques, your prospect will suspect you are using a sales technique and will try to fight you. Once they’ve become a natural part of your speech, they will flow smoothly and add warmth to your presentation. All it takes is one “yes” to turn a prospect into a satisfied client.


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Permanent link to this article: http://blog.ncm20.com/2014/08/questions-are-the-answer/

Alan Ram

Persistence Wears Down Resistance

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I’ve said this before and I’ll say it again, I have learned so much about selling by being a customer. Here’s a saying that we take for granted, that you’ve heard a million times: “Persistence wears down resistance;” as a matter fact, I invented it. That’s not really true, but it’s a great saying that you need to apply to your mindset daily when you sell cars.

Let me tell you what happened last night. I got a call from a Wells Fargo mortgage broker, Greg, who is following up with me from back in my San Diego days; in fact, he’s been following up with me for about five years. He called me about refinancing my house as well as a couple of rental properties I own. So, I asked him to put together a proposal for me because I recently had been thinking that I should refinance at a lower rate. Now is the time, and Greg’s going to get the deal!

This story probably doesn’t sound unusual to you until I tell you about our previous conversation (or lack thereof) when Greg called me, probably about three months prior, and I was sick, grumpy, and I blew him off. I probably shouldn’t even have been answering the phone that day, but he had been calling me for years now and leaving messages most of the time. But today, he happened to follow up with me at a perfect time when I was ready to do something.

That’s what you get when you’re persistent!

For so many salespeople, follow-up is a one-and-done proposition. You follow up with a customer, you don’t get the answers you’re looking for – and you’re done with them. Well, that’s a huge mistake!

Everybody is going to be buying a car eventually, so sometimes you just have to be willing to follow up long-term. What I didn’t realize over the years of Greg following up with me, was that Greg was, in fact, secretly building up a little bit of rapport with me.

Every time you follow up with a customer, whether they come down and buy or not, you should be building up a little bit of rapport with them so that they feel like they owe you as soon as the time is right.

You can’t take things too personally when you sell cars.

You don’t know what’s going on in this person’s life when you’re following up with them. I’ve been blown off hard by customers before and many times, I suspect it’s just because they’re in a bad mood about something that has nothing to do with me; they’re in a fight with their spouse, their boss has been yelling at them, or they are hungry and cranky. Who knows, but the next time I call them, they are usually a completely different person and I get the result that I am looking for!

The bottom line is this, I don’t think that 90% of car salespeople would’ve been as persistent as Greg.

After the call he had made to me three months prior, and my angry response, most salespeople would’ve deleted me from their CRM. His persistence wore down my resistance, and I suspect my commission will be making his house payment for the next few months.

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Permanent link to this article: http://blog.ncm20.com/2014/08/persistence-wears-down-resistance/

Bob Sloan

The Importance of Increasing Car Count

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Car count is one of the primary metrics for measuring growth in the service department. An increase usually leads to additional shop hours produced and gross profit. A decrease is a call to action to determine the cause(s) as well as develop a plan to reverse this trend.

Determining car count today can be complicated due to the following:

  • Financial statement
  • Prepaid maintenance
  • Express or quick service

Financial Statement

Some statements provide separate accounts for prepaid maintenance and express or quick service.  The factory accounting manual outlines how to handle these labor operations as well as traditional customer pay work

Recommended Action: Review factory guidelines to ensure proper accounting regardless of financial statement.  You cannot make valid comparisons unless the data is accurate. If not properly accounted for, DMS systems can double count repair orders feeding into your financial statement.  Therefore it may appear that your car count is increasing when actually it may not be.

Prepaid Maintenance

Several manufacturers provide no-cost prepaid maintenance in addition to offering factory backed prepaid maintenance contracts. Coverage varies from comprehensive plans like BMW to limited plans that provide basic oil and filter changes. These plans are designed to improve customer retention during the initial ownership period. Consistent follow up is key to ensuring vehicle owners remain “active,” especially after the prepaid maintenance period.

Recommended Action: Measure service retention by VIN and follow up with owners after the prepaid maintenance period to ensure they remain your customer.

Express or Quick Service

Most manufacturers are either encouraging or mandating that dealers offer customers some form of express or quick service.  This could be a structured program like Quick Lane (Ford) or simply a recommendation to set aside one or two bays for this work.  The primary goal is to be convenient while offering competitive prices.

Recommended Action: Do your homework and research the need and potential for express service in your market.

Summary

Car count is not the same as measuring the number of customer pay, prepaid maintenance or express repair orders. Car count represents the number of visits per vehicle (VIN) during a specific time period. It is a more accurate measure of service retention and owner loyalty.

Recommended Action: Begin today to track car count and develop a plan to improve or maintain your service retention using this metric rather than the number of repair orders.

To make this easier, many manufacturers’ web portals allow tracking by VIN’s serviced at your dealership. If you are unsure of how to get this information, ask your dealer representative for assistance. Remember they all start as your customers, what you do after that point makes the difference.

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Permanent link to this article: http://blog.ncm20.com/2014/08/the-importance-of-increasing-car-count/

Rebecca Chernek

F&I for Gen Y: Their Way or the Highway

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These days, slicing and dicing away at the amount of time it takes for a customer to buy a car is the name of the game in the auto industry. It makes perfect sense. You can’t fault consumers for not wanting to spend hours trapped inside a dealership. Especially the Gen Y crowd, that ever-growing consumer base whose attention spans are seldom wider than their feet.

In truth, there’s not a dealer in the world that wants to deal with impatient buyers. But guess what? You’d better get over it. At 80 million strong, Gen Y consumers make up approximately 26 percent of today’s auto buying crowd. And you had better believe that figure is going to grow as Baby Boomers (who remain today’s largest auto buying base) sail into their sunset years, followed rapidly in suit by Generation X.

So what’s the trick to attracting the latest generation of car buyers and getting them into your dealership?

Simply put: doing things their way. Gen Y buyers aren’t just heavy on impatience, but they’ve also got a low tolerance for high-pressure sales tactics – not to mention extra time spent inside the F&I office. The fact is, by the time a Gen Y buyer has approached you, they’ve likely already done extensive online research for the best deals possible. In other words, they know what they want. And they expect you to give it to them.

Big league players like Penske and Morrie’s Automotive Group are wise to this, and they’re implementing changes that are turning the auto sales industry on its ear. These players believe it’s entirely reasonable to time an entire sales transaction within 60 minutes, thus playing straight to the deepest wishes and desires of a new generation of car buyers.

Naturally, this is something that can’t happen overnight. In order to pull this off, a dealer would have to transform into something of a “one-price store” with no handoff to the F&I department. A seamless process would have to be developed and put into place – but it can be done. Throughout my own career, I have worked with a handful of dealers who embraced this all-in-one culture. Interestingly enough, those dealers saw consistently increased sales and profits in both the front and back end.

Before anyone should accuse me of advocating for the abolition of the F&I role, let me make one thing clear: this is not what I’m saying. Yet it stands to reason that total delivery time must become a serious consideration – and that deliveries in F&I any longer than 30 minutes max can and should no longer be tolerated.

In order to accomplish this not-inconsiderable task, you first have to understand why deliveries take so much longer than they should. Often, I conduct on-site dealership analyses to try to determine why customers spend so much time in the F&I office. What I frequently find is both illuminating and a bit frustrating:

  • Messy deals being handed off from the sales department
  • Zero consistency on the sales floor, with deals infrequently closed on payment or price
  • Incomplete checklists that aren’t signed off by the sales manager
  • Missing buyer agreements in deal jackets. This represents no meeting of the minds between the customer and the dealership, and relies too much on guesswork. The salesperson has skipped critical steps in the process – in some instances not even offering the customer the opportunity to take a test drive.
  • Little to no sales floor training on how to properly fill out documentation
  • Inaccurate payoff and trade information
  • Incomplete rebate forms
  • Unverified insurance information
  • A lack of menu usage or any other sort of selling strategy

There are great benefits to the F&I interview process. But unless management actually gets behind the practice with its full support, things rarely go the way they should. A point of fact is that the F&I interview works to reduce – and in some cases, eliminate – the anxiety that a customer feels when talking finances. It builds a common bond, reduces errors, and dramatically speeds up delivery. Not to mention, it also increases dealership profits.

On the other hand, passing a customer off to F&I without first performing the necessary due diligence results in a doubling of the time necessary to close the deal. This puts the dealership at jeopardy of loss of buyer faith and, ultimately, loss of sales.

Lack of menu usage is yet another common issue driving increased time frames. When done right, and when limited to no more than six products, menu presentations are short and concise and take a maximum of five minutes.

Less is always more, even in the car selling business.

The all-too-common practice of spending “as much time as it takes” to go over all products is a foolish endeavor. Time is of the essence. And time spent ironing out details and running information checks that should have been taken care of on the sales floor is a fool’s gamble.

Auto dealers these days cannot afford to fly by the seat of their pants and simply hope for a reduction of delivery time. That’s simply not feasible. Creating an atmosphere where all players are on the same page and where a consistent process is enforced is the only answer. Ultimately, this means having a zero-tolerance rule for “Lone Ranger” tactics which frequently – if not always – undermine results.

This is the bottom line:

If you want to cut delivery time in half and appease the hurried attitudes of today’s younger buyers, you’re going to have to make big changes. Those changes start with ensuring salespeople dot their i’s and cross their t’s before so much as thinking about forwarding a customer to F&I. And every manager must pitch in – it’s a team effort. Sure, this is easier said than done. But it’s far more preferable to losing that rapidly growing segment of potential buyers – or losing out on maximizing your F&I potential.

As Michael Jordan once said, “Talent wins games, but teamwork and intelligence wins championships.” Taking your dealership to championship level means employing a heavily-focused, well-managed process that puts everyone – from the boss up top to the lot attendant – on the same page. It’s only when everyone moves in unison that you can really make big strides forward.

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Permanent link to this article: http://blog.ncm20.com/2014/08/fi-for-gen-y-their-way-or-the-highway/

Joe Basil

What Mode is Your Dealership Operating In?

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As the great recession started to unfold in 2008 and 2009, gasoline prices rose above four dollars a gallon, the banking and housing industry began to collapse, unemployment rose and auto sales fell off the charts. Those dealerships that came out on the other end in strong financial shape recognized and acknowledged this change. They adapted to the changing economic environment by recognizing what mode they were in and shifting their business operating mode as needed.

Now that we have had four years of continued retail auto sales growth, those same dealers that successfully maneuvered their way through the recession are again studying the changing market conditions and adapting accordingly. They will continue to be successful because they consistently evaluate and assess the changing marketplace environment and reconcile that against the operating mode of their dealership.

So, one might ask what am I referring to by asking what “mode” a dealership may be in? Generally speaking, any business at any one point in time could be categorized in any of the four following modes: crisis, growth, profitability or maintenance.

Crisis mode would be a dealership or department that:

  • Has weak leadership throughout
  • Is consistently reactive versus proactive to market changes
  • Undercapitalized and short of cash
  • Has no strategy or direction
  • Has low or no hiring standards
  • Has over-aged inventory issues
  • Is liquidating its net worth on a daily basis

Growth mode would be a dealership or department that:

  • Has clear aggressive leadership
  • Is making long-term strategic decisions
  • Is properly capitalized
  • Is focused on growing their customer base, market share, and in turn, their enterprise value
  • Typically has very high standards that are consistently implemented through strong management teams
  • Is willing and able to make short-term sacrifices for long-term growth

Profitability mode would be a dealership or department that:

  • Has a time proven business model supported by a solid balance sheet
  • Is focused on and run by return on investment criteria, as opposed to sales volume or market share
  • Identifies opportunities for profit improvement at each and every transaction level within the dealership business process
  • Focuses on and invests in recruiting and developing top-performing employees

Maintenance mode would be a dealership or department that:

  • Might typically, but not necessarily have a strong balance sheet with excessive or lazy working capital
  • Does not focus on its market share position
  • Does not make decisions based on return on investment criteria
  • Consistently fails to recognize changes in the market and adapt accordingly
  • Makes little or no investment in training and developing the management team and employees
  • Complacently relies on an existing customer base
  • Carries excess over-aged and obsolete inventory

So based on these categories, which one might your dealership fall into? How did it get there? What will make it possible to maintain or change your position? It might be an interesting exercise to have your management team review these categories and determine which one they think their department falls into, compared to your assessment. A step further would be to have employees in each department determine what category they feel they are in, in comparison to their manager’s opinion.

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Permanent link to this article: http://blog.ncm20.com/2014/08/what-mode-is-your-dealership-operating-in/

Tom Hopkins

The Greatest Destroyer of Business: Fear

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Fear is the greatest enemy you’ll ever encounter as an automotive professional. Fears appear on both sides of most sales situations so you really need to understand them and master how to overcome them.

Hopefully, you’ll learn to recognize and conquer your own inner fears. Those common fears most salespeople have of not getting enough business, making mistakes, or losing face will be conquered with knowledge and experience. Being educated and well-prepared to perform in this industry brings about self-confidence.

Fear is also what builds that wall of resistance you so often run into. The toughest job you’ll encounter in sales is when you have to help others admit to and overcome their fears so you can earn the right to serve their needs.

There are skills you must master in order to climb over or break through that wall. But, first, you must understand what the fears are.

What are the most common fears you’ll have to overcome with buyers?

Your prospective client is initially afraid of you. You are a salesperson. I think you’ll agree with me that salespeople are not generally accepted with open arms—even by other salespeople. Even if you are going to help someone you already know — a friend or acquaintance or even a relative — when you enter their lives in the role of a sales person, certain fears will arise. It’s bound to happen in 99 percent of your presentations. (I’ll give you a one percent non-fear situation with your parents or grandparents, simply because in most cases they’ll believe in you and trust you no matter what role you play with them.)

What you need to do to conquer the “salesperson fear” is to master the skill of putting people at ease. Learn to use a relaxed manner and tone of voice. Use rapport-setting comments and questions that show them you are interested in them, not just in the transaction. You need to come across as warm, friendly, and inviting. If you truly believe in your products and the quality of service you and your dealership can deliver, it should show.

Smile. Give the client a sincere compliment. Thank them for the opportunity to serve their needs. In other words, treat them as you would a guest you are honored to have in your home.

The next fear you’ll encounter is their fear of making a mistake. Hey, we all have that one, don’t we? We’ve all made decisions we’ve later regretted. Since you’re working with one of the larger investments average people ever make, you must take the time to talk them through every aspect of the transaction very carefully.

You are the expert. You know this business. You may have knowledge about aspects of it that they hadn’t thought of, and if they had, their decision may have been different.

You must go into every demonstration with a very curious interest in the who, what, when, where, and why of the transaction. When you’ve satisfied yourself that it is in their best interest to proceed, then it’s your obligation as an expert to convince them that this decision is truly good for them.

The next fear is a fear of owing money. People may make irrational statements or ask questions that seem out of place. They may even mistrust what you have to say. They may want to negotiate.

Please realize that it’s simply a symptom of the fear they are feeling about the transaction. When you notice something along these lines, pause in your presentation. You might want to do a brief summary of what’s been discussed thus far to be certain they understand everything you’ve covered.

This challenge may appear in many variations, depending upon the negotiating skills of your clients.

They may stall making any decision to go ahead and you’ll have to draw them out.

They may be point blank about it and you’ll have to sell them on the value of the vehicle and the service your dealership provides.

A good way to handle most fears is to confront them head on, but gently. You might simply say, “John and Mary, I feel you have some hesitation about going ahead with this purchase. Would you mind sharing with me what it is?” Then, be quiet and wait for their reply. It could be that they’ve had a bad past experience and are sitting there fearful of having another. They’re waiting and watching you for signs that you’re not like that other salesperson.

Get them talking about their fears so you can determine something concrete to work with. Help them to see how different you and your dealership are. People won’t do business with you if they don’t like you, trust you and want to listen to you. Learn how to get fear out of the way.

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Permanent link to this article: http://blog.ncm20.com/2014/07/the-greatest-destroyer-of-business-fear/

Robin Cunningham

How Profitable is Incremental Growth?

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I think it is safe to say that every business operator is planning, forecasting, or at least hoping to increase their sales and profits in whatever business he or she is involved in.

In the retail automobile business, that growth can come in many forms, such as:

  • Selling more new or used vehicles
  • Increasing the gross profits of the vehicles you already sell
  • Increasing finance & insurance income per vehicle retail
  • Reducing the aging of your used vehicle inventory
  • Reducing your reconditioning cycle time in order to get the vehicle front-line ready sooner
  • Increasing the repair order count in the service department
  • Increasing the gross profit margin in the service department
  • Increasing the number of parts on the shelf that the service department needs each day

There are many more forms growth can take, of course, but these are pretty representative of the opportunities available to most dealerships we work with.

The reason I say that incremental growth, resulting from actions like those mentioned above are far more profitable than one might think, is because, for the most part, the personnel, semi-fixed, and fixed expenses are going to be nearly the same in our operating departments, whether or not we drive increased sales and gross.

If we can keep the selling expenses in the range of 30-35% of total all-in gross, when we incrementally add more gross, we can retain 65-70% of that increased income as net profit on the bottom line. If a dealership is doing really well, its total expenses will typically run 70% of gross profit, leaving a net profit metric of 30% net-to-gross. So growing our business, while being able to maintain our expenses at best practice levels, can drive more than double the incremental net-to-gross metric than would typically be the case.

There are several places we see this demonstrated during our NCM Institute classes. Our students are encouraged to develop and document at least two Guarantee of Action Plans (GOAs) each evening after class and then present them to the class the following morning. These GOAs describe and quantify their ideas. The GOA could be something like selling 10 more used vehicles per month by pricing them more competitively to the market. The quantification might look like this: 10 incremental used vehicles at $2,976 all-in gross, which would be $29,760 additional gross per month, or $357,120 annually.

The primary selling expenses (commissions to salespeople, F&I producers, and sales managers, advertising, floor plan interest, policy and delivery expense) will be maintained at no more than 35%, and assuming that no additional incremental expense is required, the department would retain 65% of the $357,120 or $232,128 in additional net profit. The equation I used looks like this: (10 x $2,976 x 12 x 65%)  If these 10 extra vehicles were not sold, the same 65% in expenses would still be incurred; but not any extra gross profit nor subsequent net profit.

When working with variable department managers, another action we suggest our students begin focusing on every day is to reduce the price-to-sale gap. That is the difference between the advertised Internet price of a specific vehicle and the actual retail transaction price at the time of sale. In the beginning, this can be a huge number, so we suggest starting at a target reduction of $200 per car.  As an example, for a dealership retailing 80 used cars per month, reducing its average price-to-sale gap by $200 per vehicle, and keeping its variable selling expenses at no more than 35%, would increase its net profit by $124,800. The equation I used looks like this:  (80 x $200 x 12 x 65%).

By the way, we work with a lot of variable managers, and, before we begin teaching them this best practice, they tell us that they believe their true average price-sale-gap is currently at least $700 per vehicle retailed… off Internet pricing! (Don’t get me started!) So the $200 per vehicle target reduction that we’re suggesting is extremely conservative.

As I said at the beginning, there are numerous opportunities for increasing sales, gross and reducing expenses in our dealerships these days. I hope my brief message validates for you the powerful effect that incremental growth, combined with a controlled expense structure, will have on your bottom line!

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Permanent link to this article: http://blog.ncm20.com/2014/07/how-profitable-is-incremental-growth/

Dennis Kane

Are You Covered for Pollution?

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Your service manager calls you and explains there has been a pollution incident with your waste oil. Do you have insurance coverage?

If you live in the United States, be afraid, because anyone with your EPA generator number who has picked up pollutants from your dealership has created a liability for you. Some greedy attorney will sue you for every dime you have earned. Our government will fine you, plus interest. The courts will imprison you, pending judgment, and your spouse will leave you for a rich plastic surgeon. I’m told fear and sex are the two best ways to get a dealer’s attention – the rest of this article has neither. But if I still have your attention, the following is worth reading!

Every dealership has pollution liability exposures, but many dealers don’t have insurance coverage for these complex and constantly emerging hazards. Many companies that have significant pollution exposures are required to buy pollution coverage (ie: those with underground tanks); however, for most dealerships, the decision to purchase insurance is voluntary.

This coverage is often overlooked by insurance agents because they don’t understand dealership pollution exposures or they don’t have access to markets that can provide cost effective coverage. Most garage liability carriers have standard pollution exclusions, so a separate policy is almost always required. There are many different types of coverages and policies depending on the complexity of your pollution exposures and hazards.

Every dealership has pollution exposures.

For example: solvents, caustics, cleaning agents, collision repair and painting operation, and petroleum products all can create pollution exposures. Results of pollution incidents include:

  • Damage to third party
  • Clean up costs of contaminated property
  • Off-site waste disposal clean up expense
  • Fines and penalties for violation and adverse public reactions

The Resource Conservation and Recovery Act provides “cradle to grave” regulation of hazardous waste. It imposes strict waste management requirements upon generators and transporters of hazardous waste, and upon waste treatment storage and disposal facilities. This basically means that you own the liability for the lifetime of the pollutant. There is also strict joint and several liability with pollution incidents which means, regardless of who was negligent, you can be brought into the suit to defend and remediate the pollution incident.

At a minimum, every dealership needs three basic coverages.

First, your dealership property and damage to third party that originates at your property for bodily injury, property damage and clean-up costs. Second is transportation coverage from non-owned autos that pick up your pollutants and transport them to non-owned disposal sites for bodily injury, property damage and clean up cost. Third is non-owned disposal sites which offers coverage for properly permitted sites for bodily injury, property-damage and clean up resulting from pollution event on, under or migrating beyond the boundaries of disposal sites. In some instances, if you have underground tanks, you need specialized coverage.

Take the time at your next renewal to ask your agent to review the pollution coverages to make sure your exposures are covered and there are no surprises. Depending on the size of your dealership, pollution policy premiums start around two thousand dollars for one million dollars of coverage.

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Permanent link to this article: http://blog.ncm20.com/2014/07/are-you-covered-for-pollution/

Jeff Cowan

How Service Appointments and Reservations Destroy Customer Retention, Survey Scores and Upsells

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In my workshops I always like to have plenty of Q & A time so that I can address the real concerns that Service Advisors believe keep them performing at their highest level. One concern that never fails to be mentioned revolves around the issue of service appointments and reservations.

Typically, when your Business Development Center (BDC) or your Service Advisor sets your customer up with an appointment or reservation, the customer assumes it means the same thing as it does at a restaurant: when they arrive at the given time, their seat will be ready with no waiting. And just as when they make airline reservations, they expect to be on the plane backing up from the gate at that reserved or appointed time. When you set up a reservation or an appointment for your customer, they have been trained by business in general to believe that the work will begin at the appointment time. No matter how many times or how well you try to explain to your customers what is really going to happen upon arrival, the mere usage of the words “reservation” or “appointment” reinforce their belief that the work will begin at the exact time of the reservation.

This is a serious problem.

According to what I hear from your Service Advisors, and based on what we witness when providing our training on your service drive, three fourths of the customers your service staff work with everyday have this misunderstanding at the initial write up. As your Service Advisors try to explain that the time set for the appointment was for the purpose of gathering information, the exchange with the customer quickly turns into an argument. Therefore the write up and the relationship began with an argument. An argument that your staff can’t win; an argument that takes about six minutes to resolve; an argument that only gets the customer thinking that what they were told was just a ploy to get them in; and an argument that sets the mindset that you don’t do what you promise. Anytime you start out a relationship like this, you put yourself at a big disadvantage toward accomplishing the goals of customer retention, high survey scores and the chance to acquire any necessary up sells.

The simple and easy solution to stopping this and turning it around is as simple as implementing the following two steps.

Step 1: In service, never use the words “appointment” or “reservation” again. Not verbally. Not on signs. Not in print. Not online. Not anywhere. Appointment and reservation times imply an exact time that an event is going to begin. Check-in time implies that waiting will be involved. For instance, when you go to the airport you are encouraged to arrive two hours prior to check-in. Once you check-in, the next step is to wait for the reservation time when you will board the plane and take off.

From now on, you are going to start scheduling “check-in” times for your service customers so that after they check-in, they will wait for the appointed time set by the Service Advisor after they have had a chance to talk with the customer in person about their needs. In the customer’s mind, appointment and reservation times indicate that the event will commence at that specific time. Check-in time however, precedes an appointment time. In the customers mind, check-in time refers to a preliminary period designated for the collection of information. After the information is given, an exact time for work to begin can be determined. Check in time and its implications are familiar to customers.

Step 2: Now that we have replaced the words “appointment” and “reservation” with “check-in” time, the following word tracks are how you are going to explain check-in times and stop the arguments forever.

Word track one is to be said by your BDC or by the person scheduling the check-in time:

“Now that we have established your check-in time for 9:00am tomorrow, allow me to take a minute to explain to you what that means and what will happen once you arrive. First, you will want to arrive as close to your check-in time as possible. Getting here early means you will have to wait and getting here late could result in you losing your place in line. Once you do arrive, your Factory-Trained Service Advisor will be ready with all of the information you just gave me.

During the first part of the check-in process they will go over all of this information to ensure that I wrote everything down correctly, to make sure they understand what your concerns are and to see if anything needs to be added to your list.

The second step in the check-in process is when you and your Factory-Trained Service Advisor will walk around your vehicle to collect numbers off your vehicle and do a quick visual inspection.

The third part of the check-in process is when it will be determined which department and which Factory-Trained Technician will be the one best suited to diagnose and repair your vehicle. That decision will be based on what you and your Factory-Trained Service Advisor discussed and saw during the earlier part of the check-in process.

Once that is determined we will then look at the schedule for that department and Factory-Trained Technician and that will determine approximately when your vehicle will enter our state of the art shop.”

By using this one minute long word track, I have fully explained to the customer exactly what to expect when they arrive, exactly what happens if they are early or late, and exactly what will happen and why. I have explained that the check-in time does not mean reservation or appointment. I have explained and prepared them to wait. Once they arrive prepared, the Service Advisor has two word tracks to deliver:

“Thank you for arriving on time to get your vehicle checked- in. Now that you are here let me explain to you what we will be doing to get your vehicle checked-in. First, I will be going over all of the information you gave us on the telephone to ensure that it was written down correctly, to ensure that I understand your concerns, and to add anything that needs to be added.

Once that is done, we will both walk around your vehicle to collect some numbers off of it and to do a quick visual inspection. Based on what we discuss and what we see during the visual inspection, we will select the department and or Factory-Trained Technician that will be best suited to address your concerns today. Once that is determined, we will take a look at their schedule which will dictate approximately when your vehicle will enter our state-of-the-art Service Department.”

After the Service Advisor completes everything as they said they would, they follow with this final check-in time word track:

“Now that we have reviewed all of your original concerns and have completed our visual inspection, I believe the department/ Factory-Trained Technician that would be best to diagnose and repair your vehicle would be ____. Right now they are working on another customer’s vehicle, so it is likely your vehicle will be entering our state of the art facility at approximately _____. Let’s give them about one hour to an hour and a half to complete your diagnosis, meaning you can expect a telephone call from me between ____ and ____ with an update on the status and findings regarding your vehicle. Fair enough?”

By using these two word tracks, which combined take one minute to deliver, you have done the following:

  1. You have started the relationship on an up note and not with an argument.
  2. You have done everything to the letter that your BDC told them you were going to do.
  3. You have established the reality that when you say something is going to happen, it is going to happen. They can count on you.
  4. You have saved about four minutes at the write-up by being in control of your customer and the write-up itself.
  5. You have slowed the customer down giving yourself more time to build rapport and inspect their vehicle which will substantially impact customer retention, survey scores and your ability to get necessary upsells.
  6. The customer has been educated that speed is not the most important thing in getting their vehicle repaired.

It’s really that easy.

By changing your verbiage from appointment or reservation to check-in time and by delivering these three, simple word tracks, you will experience immediate impact and the arguing will end forever. I have always felt the best way to win an argument is to eliminate all possibility of an argument arising. You can always tell a great Service Advisor by the number of scars they have on their tongues from years of biting back argumentative words. The solution I have presented here will do two things; stop the arguments before they start and save your Service Advisors from acquiring unnecessary scars.

service_mgmt

Permanent link to this article: http://blog.ncm20.com/2014/07/how-service-appointments-and-reservations-destroy-customer-retention-survey-scores-and-upsells/

Garry House

The Changing Role of Used Vehicle Management

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Over the last ten years, anyone who has not witnessed dramatic changes in the used vehicle arena must have his/her head in the sand. Why is it then that so many franchised new vehicle dealers have thus far failed to effectively adjust to these changes? So that you understand what I’m talking about, I’ll just mention two of these impactful changes:

1. The Growth of the Internet as a Marketing Source

2. The Advantages Available through Inventory Optimization Technology

Even the language is changing! The used vehicle manager who was successful ten years ago wouldn’t even be able to communicate today. What did he need to know about inventory turns, price-to-sale gap, SRPs and DVPs, etc.?

Most importantly, the scope of used vehicle management responsibilities has massively expanded. At the used vehicle management classes offered by the NCM Institute, we now define and discuss the 30 Regular Responsibilities that must be performed in a well-run pre-owned vehicle department.

NCM Institute divides these responsibilities into three major categories: Inventory Management, Marketing, and Sales Production. It quickly becomes apparent to our students that even Superman, working 80 hours per week, cannot effectively perform these responsibilities individually.

Many of these numerous tasks must be assumed by, or delegated to, other members of the dealership sales team. In some dealerships, the used vehicle department manager position has been totally eliminated from the organization chart. Instead, the position has been replaced by one or more of the following:

  • Group Used Vehicle Systems Coordinator
  • Used Vehicle Digital Marketing Director
  • Used Vehicle Sales Production Manager
  • Used Vehicle Inventory Manager
  • Used Vehicle Acquisition Specialist
  • Used Vehicle Pricing Administrator

Without a used vehicle department manager, either the GM (or GSM, if applicable) must “own” the aforementioned 30 Regular Responsibilities, and he/she must ensure that each of the responsibilities is effectively delegated and executed. Future articles of Up To Speed will present and discuss in detail many of these individual responsibilities.

Need help structuring your dealership to capitalize on used vehicle department opportunities?  Reach out to your NCM 20 Group moderator or Retail Operations Consulting coach, or sign up for the NCM Institute’s courses in Used Vehicle Management.  Call us at 866.756.2620; we’ll listen and recommend a solution that’s right for you.

UV Training

Permanent link to this article: http://blog.ncm20.com/2014/07/the-changing-role-of-used-vehicle-management/

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