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Dustin Kerr

Do You Have a Business… or Just a Job with More Risks?

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When I was operating dealerships in Northeast Oklahoma, there was a little hamburger joint that had some of the best hamburgers and fried squash I had ever eaten. At the expense of my girlish figure, I would attempt to eat at this burger joint about once a week. The odd thing about that burger business is that some days it would just be closed for no apparent reason. Sometimes, it would stay closed for a week or two at a time before opening back up.

We had one of the employees as our customer, and one day, I asked her what the deal was with the restaurant being closed at such odd intervals. She informed me that the owner was elderly and when he was sick or had medical procedures that he would just shut the restaurant down because he had never taught anyone else how to run the day-to-day operations. It struck me that this gentleman appeared to have built a great business with a great product, but in reality, he didn’t have a business, he had a job with more headache and risks.

You may be asking yourself what this has to do with the car business.

Well, since you asked…I recently had the opportunity to attend the NIADA convention in Las Vegas and had the pleasure of meeting a lot of independent car dealers and talking with them about the 20 Group peer collaboration concept. Many of the dealers had no idea what a 20 Group was and were very excited to potentially join a group and learn from others going through the same challenges. Everything was great until I told them we meet three times a year for a day and a half. I heard the same objection over and over again and it went something like this: “It’s all I could do to get away to this conference. I’m scared to death about what’s going on while I’m gone. There’s no way I could commit to three days, three times a year to attend meetings away from my dealership.”

Albert Einstein once said, “The definition of insanity is doing the same thing over and over again, but expecting different results.” The question is: can your dealership afford to continue facing the same challenges without viable, proven solutions?

Just like the gentleman that owned the hamburger joint, these used car dealers did not have a real business, they had a job but with more risks and a lot more headaches. As business owners or upper management, you put in a lot of hours, have a lot of investment at risk, and must overcome never-ending challenges from customers, competition, and regulators. Some people think the best way to manage all those obstacles is to just do everything yourself. It’s not. In fact, trying to manage it all yourself is a recipe for disaster. It is critical to the success of your business and, more importantly, your health, to find or identify people in your organization that can help you run your business when you need to be away, whether that is for a 20 Group meeting, illness, or simply taking a vacation.

Remember, your primary job as a manager or leader is to train and manage activities. If you are scared of what might happen if you had to be away from your dealership for a few days, you might ask yourself “Do I have a business or just a job with more risk and more headaches?”


Learn more from Dustin Kerr:

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Permanent link to this article: http://blog.ncm20.com/2015/07/do-you-truly-treat-this-as-a-collections-business/

Laura Madison

Humanize Your Online Presence

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The use of social media is becoming mandatory for dealerships. Prospective clients are looking for local dealers’ Facebook pages; they’re searching YouTube for product comparisons and even asking friends across social platforms for recommendations. The problem in the automotive world is: the vast majority of dealerships and individual salespeople are using social incorrectly. Simply being active on a platform does not mean that platform is being effectively used. The key to an effective social media presence is creating human connection.

To illustrate the importance of human connection, have a look at how people in Japan buy and sell cars. Japanese salespeople go door-to-door trying to sell vehicles, rather than waiting at the dealership for the next ‘up’.  Once they find a prospective buyer, face-to-face meetings continue in their home with few Japanese car buyers ever even setting foot in a showroom. Paperwork is drawn up and signed in clients’ living rooms. When the sale is complete, a relationship has been formed that will last far beyond the delivery of the new vehicle; salespeople maintain constant contact with sold clients by calling, writing handwritten cards, even taking their clients to dinner.

What this demonstrates, I believe, and what the Japanese have remembered and we have forgotten is that commerce has always been personal. It has always been about people doing business with other people. This is where we have run into trouble in the digital world. We spend so much money on well-organized websites and so much time attempting to sell using social media but what we’re missing is connection. We’re missing the most critical element of relationships.

Consider for a moment what keeps a customer loyal, it’s not an oil change punch card or a fancy website; it’s relationship. It’s human-to-human connection.

Real connection is key to winning business.

There is some science behind the power of human connection in persuasion. Humans are born with a special part of the brain whose sole purpose is to recognize faces.  It is called the fusiform area and is located near the brain’s emotional center. The fusiform area makes us hard wired to use the human face as a centralized point for information and believability. So, in the case of faces: seeing is believing. In other words, an image of a salesperson’s face posted on social media is infinitely more powerful than a stock image of a new truck.

Fewer people are setting foot in dealership showrooms in 2015 than ever before, which provides a bit of a disadvantage in trying to create relationships. Social media, however, can fill this void by giving us a way to still create human-to-human connection with potential clients who already do all their research and shopping online.

Use this information to begin to dominate with a social media presence. Before your next social media post, consider human connection. Instead of touting an upcoming sale or a low, incentivized lease payment, introduce your followers to one of your salespeople. Keep personal relationships and human connection in mind with your dealership’s social presence—and always remember the power of the face.


Want to learn more from Alan Ram’s Proactive Training Solutions?

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Permanent link to this article: http://blog.ncm20.com/2015/06/humanize-your-online-presence/

Robin Cunningham

Have You Put in Your 10,000 Hours?

Businessman pointing at his wristwatch.

I don’t know about you, but I read a lot of books.

Recently, I was covering for Steve Hall, who had to leave town on business at the end of one of his classes. The class had just started taking their exam. I didn’t have my laptop with me, so I didn’t have anything do for 45 minutes. We have several bookcases at NCM, and one of those is right outside the classroom. So, I walked over to it to see if I could find something interesting to read to keep me occupied while the class finished their evaluations and final exam.

I started scanning the books to see which title or author might jump out at me and I noticed several Malcolm Gladwell books. For some reason, I picked up Outliers: The Story of Success and began reading. An outlier, by definition, is a person or thing situated away or detached from the main body or system.

As the title suggests, it includes many “stories of success.” There are many stories of success in the retail automotive business. I think, though, that there are more stories of failure.

In many of my classes, I do a little exercise. I ask everyone to go back to their first car sales position and remember all the people who were on that staff or started at a similar time. I ask them where those people might be right now. When they think about it, they all agree that most of them are no longer in the business at all. It’s not that they are all at other dealerships; they must be in some other job or career. They then agree that they (including me) are the lucky few. We somehow liked the car business enough and were good enough that here we are all these years later, still in the business and trying to get better at it.

The book, Outliers, has many amazing stories about success in a number of different fields that have no connection to each other. The common denominator in each story, though, was each individual’s or group’s experience in getting in their 10,000 hours of practice time, in order to become phenomenally successful.

The first stories of success come from the world of violin players. They were broken up into three groups. The first were the stars, the students with the potential to become world class soloists.  The second group was judged to be merely “good.” The third group was unlikely to ever play professionally and who intended to become music teachers in the public school system.  They were all asked the same question:  over the course of your entire career, how many hours have you practiced?

They all started at the same age of five and practiced approximately two or three hours a week.  The students who would end up being the best in their class began practicing six hours a week, then later eight hours and by 12 were practicing (purposefully  and single-mindedly  playing their instrument with the intent to get better) well over 30 hours a week. In fact, by the age of 20, the elite performers had each totaled 10,000 hours of practice.

By contrast, the merely good students had totaled 8,000 hours, and the future music teachers had totaled just over 4,000 hours.

In this study, they couldn’t find any “natural” musicians who floated to the top while practicing a fraction of the time their peers did. They also couldn’t find “grinders” who worked harder than anyone else, yet really didn’t have what it takes to get to the top. They found that once a musician has enough ability to get into a top music school, the distinguishing factor of success is how hard they work. THAT’S IT.

The idea that excellence at performing a complex task requires a critical minimum level of practice surfaces again and again in studies of expertise. In fact, researchers had settled on what they believe is the magic number for true expertise: 10,000 hours.

I am sure you might be thinking, what in the world does this have to do with selling cars, selling service, servicing cars, selling financial service products, answering inbound phone calls or taking inbound Internet leads. Well, the short answer is: everything!

I have been in and around the retail automobile business much of my life. I know for a fact that, in general, there is a huge lack of practice time for almost every job in a dealership. I say “almost” because technicians have gotten more training and practice time in their positions than any other. I am not talking about the fact that we work arguably too many hours at what we do at work, I am talking about the amount of training and practicing at improving our skills and knowledge in each position on a regular basis.

The fact is, many of the people who decide to join the retail automobile business in most positions, do not do so with mindset of it being the career they had always planned on. I can also say that even though both my father and grandfather were dealers. I had all the educational opportunities one could hope for. But until I was 31 years old, I had not seriously considered making the car business my career.

Most of the Dealers and General Managers in the country started in the business selling cars. I often ask them to go back to the time they were hired into their first car sales position. I ask them to remember what the interview was like, what they were told their responsibilities were going to be, what the onboarding process was going to be, how much training there was going to be, what the career path could possibly be, etc.  Most of the people I work with are smiling at this point because this is not how it went down. And as I said earlier, we were the lucky few.

Now, I ask them to come back to the present, at the dealerships or departments they now lead and manage. I ask them to reflect on the interviewing process they now have; what they tell and show new prospective employees that their responsibilities are going to be, what the onboarding process will be like, what the training is going to be like and what they can expect the likely career path to be, if they excel at what they do. In many cases, these manager’s personal experiences being new in the business isn’t terribly different than what they now provide their people, now that they are the leaders and managers and coaches.

There are many more stories in Outliers than I can recount here. But one of the recurring themes in each was that these people or groups had a unique and conducive set of circumstances that allowed them the time to spend an accumulative 10,000 hours practicing their skills to become great. Yes, in many cases there were extenuating circumstances and perfect timing involved, but also there were parents, coaches, teachers, mentors, handlers, bosses, or managers who made sure the time was spent virtually on a daily basis for an increase in knowledge and skills training.

Talent can only be identified in any role when the knowledge of what needs to happen and why is consistently presented; and when a person is consistently working on the skills necessary to succeed. For someone to take off and become almost obsessed enough to put in their 10,000 hours, they must really like what it is they are doing.

I really love this business and I know there are some 10,000 hour car business stories that could be discovered and told. But I also know that there are far fewer than there could be. There is so much more opportunity available to us in each and every department of each and every dealership. I challenge all managers, leaders, and coaches to help and work with your people, so they have the opportunity, if they so choose, to put in their 10,000 hours of practice to become their own story of success.

 


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Permanent link to this article: http://blog.ncm20.com/2015/06/have-you-put-in-your-10000-hours/

Dave Anderson

Building a High Performance Culture (Part 21)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

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Words That Hurt: Micromanage

In this post on building a high performance culture, I’m assigning the word “micromanage” to the Words that Hurt column. Micromanagement is an often-misunderstood word, so in this piece I’ll explain what it is and is not, as well as the danger it poses to your culture, people and results.

I’ll dig deeper into micromanage momentarily. But first, quickly review the strong and weak cultural words below so you can conceptualize the ideal culture to move your organization towards, as well as what you must weed out of your culture in order to maximize your organization’s potential.

Words that work and must be woven into culture:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Wise: having or showing good judgement.

Diligent: giving constant effort to accomplish something.

Words that hurt and must be weeded out of culture

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about. (as opposed to being committed).

Foolish: lacking good sense or judgment.

Micromanage is defined as “to control with excessive attention to minor details.” Here are seven thoughts on micromanagement and how it will influence your culture.

1. Holding people accountable for tough standards is not micromanagement.

It’s important to note that there are a handful of things within a culture that are not up for debate, must be held in a iron grip, and thus may be wrongly perceived as micromanagement. Managers who are diligent in holding others accountable for living company values and following prescribed processes are often erroneously accused of being micromanagers. This reflects a failure to understand that micromanagement involves “minor” details, and values and processes are major matters and must be vigorously enforced and upheld.

2. Making every decision, solving every problem and having all the ideas are signs of micromanagement.

You’ve conditioned people to count on you so heavily they cannot think for themselves. Micromanaged people lack passion and tend to play not to lose.

3. Over-involving yourself in others’ jobs, especially in areas where you have little expertise, may constitute micromanagement.

While your authority allows you to set clear expectations and deadlines for results for the various aspects under your charge, you err when you then nitpick and continually second-guess those responsible for producing the results throughout the process.

4. If you hire the wrong people you’ll have to micromanage them.

This is a sad truth, because it’s foolish to empower incapable or corrupt people with latitude and discretion and expect anything positive to come from it.

5. Micromanagement is a primary de-motivator for top performers.

High achievers resent having to check with you for everything. They feel that their past performance should earn them the trust to move faster and with less supervision than less-proven team members.

6. Micromanagement works in the short-term.

It’s always easier to personally make a decision or perform a task than to teach someone else how to do it. But this strategy causes you to plateau, and stunts the growth of others over the long haul; you become overwhelmed doing too much personally, and others never get to try new things or venture beyond their comfort zone.

7. Micromanagement is rooted in pride and to a large degree, insecurity.

Micromanagers feel that if someone else performs tasks or makes decisions without their involvement it makes them less important. They may also feel that “if they want it done right they have to do it themselves”, overestimating their own abilities while they sell short the potential of their teammates.

In summary, micromanagement overwhelms you, demotivates others, and creates an oppressive culture.

Face it: if you’ve hired people who must be micromanaged that’s your fault; if you don’t train people to do their jobs more independently, that’s your fault; if your ego doesn’t allow you to empower others, that’s your fault. Are you seeing a pattern here? The good news is that you can fix what is your fault. The bad news is that most micromanagers are too full of themselves, or busy doing everything themselves, to even bother trying.

Permanent link to this article: http://blog.ncm20.com/2015/06/building-a-high-performance-culture-part-21/

Mark Shackelford

Have You Tracked Your Employee Turnover Lately?

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Do you find yourself constantly concerned about retaining your employees and trying to hire the right people to take care of your customers?

There has been an awful lot of discussion about this topic and how to become better at your hiring process and pay plans. I believe the issue starts with identifying the right personality for the job and then having the right training process and accountability in place in order to retain good employees.

This starts with the dealer doing the right thing and having managers do things right!

We come in contact with salespeople in our everyday life and when we do, we recognize talent and we also recognize when we are treated poorly. Today’s workplace is becoming more and more challenging to find someone who wants to work the hours needed to operate our business effectively and is motivated by money. That being said, maybe we need to look at our pay plans and how they motivate our employees, while at the same time allowing them to balance their work schedule with time off.

We know that our industry has been challenged by vendors as well as manufactures in finding ways to change or eliminate our sales process, however, one thing will never change: people sell cars. So we need to hire the best at it and keep them.

The first thing we need to change is how we look at the work schedule.

Then, through our interview process, we need to identify what motivates the new potential hire financially as well as how we can assist them in achieving their goals in order to succeed in their new career. Our pay plan should be tied to performance, as well as effort. Along this line, how often do you monitor their training and evaluate their performance? Do they align with each other?

Don’t forget that most people like to be held accountable and be led by a leader.

How often do you have an accountability meeting with your employees to discuss what obstacles may stand in the way of them hitting their objectives?

Let me give you an example of what I’m talking about: A new salesperson was hired that had performed quite well at their previous store, but after two months of struggling with their sales performance, they began talking about leaving. The sales manager and the HR manager held a meeting with the employee. During this meeting it was discovered that the sales person was struggling with getting leads and opportunities to work with customers.

After reviewing the salesperson’s closing ratio and the number of opportunities, they discovered the statement to be true. In fact, the salesperson with the most sales had a lower closing ratio and burned through more ups than the person being reviewed. What if this salesperson had been given the same number of opportunities? It would be a win for everyone.

Many times we lose good employees and never know the real reason for their departure. Dealers who are doing the right things and managers who do things right will make the right hire, train weekly, and have a performance review with all employees at least twice a month.

 

Permanent link to this article: http://blog.ncm20.com/2015/06/have-you-tracked-your-employee-turnover-lately/

Tony Alessandra

Using DISC Styles To Build Teams That Work

Businesspeople in Meeting

“Round up the usual suspects,” the gendarme ordered in the famous line from the movie Casablanca. And frequently, that is how executives think when they create teams, committees, or task forces. The boss says or thinks something like, “Let’s appoint anyone who might know something about this issue.” Or, even more likely, “Grab anybody who’s got a stake in this thing.”

Organizations, of course, love such groups because when they work, they can improve coordination, help employees feel more involved, and maybe even spur innovation. However, when they flop—or, more commonly, just lapse into mediocrity—they can drain an organization of its vitality and leave a legacy of posturing, power struggles, and misunderstandings.

Designing a Group

We naively assume any group can automatically be a team. However, one of the biggest reasons that teams misfire is that personality differences are ignored.

If, when you create a team, you employ knowledge of the four behavioral styles, you greatly improve its chances for success. You need to take into account that there are natural allies and antagonists among the styles and also that each style functions best at a different phase in the life cycle of a team.

The Natural Cycle of Groups 

Work groups typically follow a cycle, just like the organizations which spawn them. They face predictable obstacles, rise to the occasion or fail, and as a result, either evolve or deteriorate. At every stage in that cycle, each of the various behavioral styles can be a help or a hindrance.

Phase One: Finding Focus

Any new group, at first, gropes to find its focus. Members think: Is this going to be worth the effort? Is this going to be a useful team that can get things done?

In addition, each member at this point is seeking to define his or her role. They silently ask: Do I fit in here, or am I an outsider?  Am I going to be an important member of this group with real input, or am I just here for appearances? Is this going to waste my time?

Conscientious Styles and Dominance Styles can be especially helpful during this first phase. They are both skilled at getting to the heart of matters, though in different ways.

If the challenges the group faces are intellectually complex, the Conscientious Style will be in his element. Because they are so good at reasoned analysis on tasks, Conscientious Styles can help clarify the mission and give the team focus.

Similarly, if the main hurdle the group faces is more of a conflict—say, a history of discord among members and/or a split over its goals—a Dominance Style likely will shine. In fact, the group may be yearning for just a strong leader who can tell the warring members to quit butting heads and either commit, or leave. That is a situation ready-made for the Dominance Style.

In either case, those with these two behavioral styles may be able to get the group to psychologically buy into the idea of moving forward together, to convince the team that progress will be possible.

Phase Two: Facing the Realities

While a tough-minded Conscientious Style or Dominance Style may get the group going, this stormy second stage often cries out for the buoyant optimism of the Interactive Styles. Their friendly, informal brand of leadership can send out a strong, clear signal that this group can work together and make things better for everybody.

A people-oriented approach is needed at this stage because at this point that reality often intrudes. The group may begin to see how difficult its task really is, how little time and resources are available, and how members may need to settle for a half a loaf rather than a stunning breakthrough.

All these factors can breed frustration, confusion, and disillusionment. This is when it will be decided if the group tackles the real issues in meaningful ways, or is mired in its own internal power struggle. That is why Interactive Styles, who are good at smoothing over rough edges and encouraging all to share their thoughts and feelings, can be a key here.

Many groups, of course, never transcend this them-versus-us mindset. They continue to silently debate: Who is the top dog? Such a team is not likely to accomplish much. Instead, members will continuously collide with one another, limiting themselves as a team and as individuals.

However, if the Interactive Style, with his or her upbeat attitude and people skills, can get the members to quit keeping score, they may yet learn to work together.        

Phase Three: Coming Together

Cooperation and collaboration become increasingly apparent, and it is now that Steadiness Styles can help meld individual differences into group progress because they are especially good at coalescing differing views.

By opening their hearts and heads to one another, the Steadiness Styles can blend the discordant elements into more of a single melody. The team begins to narrow the gap between what it earlier said it wanted to do and what it is actually doing. There has been a shift of identity, and it has become a true team because members who previously thought in terms of “me,” begin thinking “we.”

Phase Four: Reaching for Stardom

The final stage is more the exception than the rule. However, when reached, it means a team really is performing at its best and is functioning as a whole, not just as a collection of individuals.

Its members enjoy being part of the team and express that fact. They have learned how to work together. Morale is high. The group continually produces quality and quantity output and is effectively self-managing.

In the previous three stages, Dominance Style-type behavior might have been called for on key decisions. However, at this stage, a hands-on, controlling style is not needed. In fact, once a group has this momentum, such a strong-handed style can be counterproductive and could even torpedo the group’s progress. Instead, the team’s decisions flow naturally from its deliberations. Differences among its members become a source of strength, not dispute.

Differences, not deficiencies

Love’em or hate’em, work groups are here to stay. (Some estimates are that as much as 50% to 80% of a manager’s time, for example, is spent with groups.) However, while they can be high-performance vehicles, they can also be high-maintenance, especially in the early stages. Only a team that fully understands and savors its members’ styles is likely to be genuinely productive.

If members were chosen carefully and if they practice adaptability, the advantages of stylistic diversity can quickly outweigh the group’s liabilities. Remember: We are talking about personality differences here, not deficiencies.

Therefore, in the final analysis, working with groups all comes down to suspending judgment, empathizing, and trying to play to people’s strengths. The result, despite our differences, can be a wonderful synergy.

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Permanent link to this article: http://blog.ncm20.com/2015/06/using-disc-styles-to-build-teams-that-work/

Dustin Kerr

The Buy Here Pay Here 20 Group – What It Is and How It Will Help

A 20 Group is a peer collaboration model that allows you to meet with other BHPH dealers of similar size from non-competing markets to share best practices, successes, and more importantly, failures. NCM® Associates is the originator of the automotive 20 Group process, and has been empowering dealers to learn from one another since 1947.

A typical BHPH 20 Group meets three times a year at a location chosen by the group. Meetings can range from 1 ½ to 3 days depending on what the group wants to discuss and the location.

The ability to get away from the day-to-day distractions of the dealership and share ideas with some of the brightest, most successful dealers in the industry are some of the key factors that drive profitability amongst NCM® group members.

In addition to the meetings, members receive monthly financial composites that allow them to compare themselves to other group members, as well as comparing themselves against the NCM Benchmarks® across all groups.

The meetings are facilitated by a professional NCM Executive Conference Moderator with years of experience in the BHPH and LHPH industry. The agenda and hot-topic discussion is decided by members of the group.

Topics of discussion include:

  • Compliance
  • Proper Inventory
  • Advertising
  • Collections policy and procedures
  • Hiring and retaining top talent
  • Sales and collection pay plans
  • Employee productivity
  • And much more!

Why choose NCM as your Buy Here Pay Here 20 Group provider?

You have probably realized by now the power of the BHPH 20 Group peer collaboration model, but why should you choose NCM Associates to facilitate your group?

  1. NCM Associates is the originator and pioneer of the 20 Group model. We started our first Ford 20 Group nearly 70 years ago and that group is still in existence today!
  2. Data Integrity- Numbers are only as good as their accuracy. All statements are reviewed personally by a moderator before they are compiled and sent to you in your monthly composite. Our data team manages and processes your data in-house; we don’t outsource it!
  3. Access to an Industry Expert- Your emails and calls are personally answered and returned by your moderator, not an assistant or secretary. Even when we are facilitating meetings, you can expect a return email or call within 24 hours!
  4. Custom Composites- You have the ability to log on to your member website and compare yourself against as many or as few members from your group as you want in whatever categories you want.
  5. It’s All About You- The group gets to decide what goes into the composite, where you want to meet, agenda topics, and much more.
  6. Online Training- Your membership includes training from some of the top experts in the industry that would cost you thousands to obtain on your own. This training is delivered by our OnDemand virtual training site.
  7. No Contracts or Commitment- If you don’t feel like you are getting value from the group, you can resign from the group at any time.
  8. Innovation- As the industry leader, NCM is always working with the brightest minds in the industry to develop tools and strategies to help you become more profitable. As a BHPH 20 Group member, you often get access to these tools for a reduced cost or even free!

In addition to the 20 Group, NCM Associates also offers on and offsite consulting as well as BHPH training for salespeople, collectors, and managers.

If you are ready to join your peers and find out how to achieve a 50% or better ROI, click here or contact me today at 913-827-6677 or dkerr@ncm20.com.

Permanent link to this article: http://blog.ncm20.com/2015/06/buy-here-pay-here-20-group-what-it-is-how-it-will-help/

Dave Anderson

Building a High Performance Culture (Part 20)

This article is part of a multi-part series titled “Building a High Performance Culture” by Up To Speed Guest Expert, Dave Anderson, of LearnToLead®.

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Words that Work: Diligent

In this post on building a high performance culture I’m adding the word diligent to the words that work column, although diligence can hurt you if you’re investing it in the wrong habits or activities.

I’ll expand on diligent in a moment, but first do a quick review of the strong and weak cultural words so you can conceptualize the ideal culture to move towards, as well as what you must move away from culturally in order to maximize your organization’s potential.

Words that work and must be woven into culture:

Earn: to acquire through merit.

Deserve: to be worthy of; to qualify for.

Consistent: constantly adhering to the same principles.

Hope: grounds for believing something in the future will happen.

Catalyst: a person or thing that makes something happen.

Responsible: to be the primary cause of something.

Tough-minded: strong willed, vigorous, not easily swayed.

Loyal: faithfulness to one’s duties or obligations.

Passion: a strong feeling or enthusiasm about something, or about doing something.

Discipline: an activity, regimen, or exercise that develops or improves a habit or skill.

Commit: to pledge oneself to something.

Prune: to remove what is undesirable.

Wise: having or showing good judgement.

Words that hurt and must be weeded out of culture:

Fault: responsibility for failure.

Blame: to assign responsibility for failure.

Excuse: a plea offered to explain away a fault or failure.

Mediocre: average, ordinary, not outstanding.

Wish: to want something that cannot, or probably will not happen.

Entitle: a claim to something you feel you are owed.

Sloth: reluctance to work or exert effort; laziness.

Complacent: calmly content, smugly self-satisfied.

Maintain: to cause (something) to exist or continue without changing.

Apathy: a lack of enthusiasm, interest or concern.

Interest: to be curious about. (as opposed to being committed).

Foolish: lacking good sense or judgment.

The word diligent is defined as “giving constant effort to accomplish something.”

High performing cultures are those where the right things are done consistently, and where the team members diligently persist to see those right activities come to completion.

In order to maximize results, discipline must precede diligence. In other words, one must be disciplined enough to choose and execute the highest leverage tasks from the outset, and to say “no” to the distractions that arise in the process, before diligence is beneficial. Frankly, giving constant effort to stick with, or accomplish, the wrong something, or a low-return something, hurts an organization and stifles results.

The word “consistent” is a cousin of “diligent.” To be consistent means to “constantly adhere to the same principles”. Thus discipline chooses the right activity or principle; consistency ensures those same things are done repeatedly, and diligence ensures the actions are not only initiated but followed through to a successful completion.

Discipline, consistent and diligent are critical success traits demonstrated by highly successful people, and are a trait of highly performing cultures overall. Without discipline you’ll consistently put second things first, as you diligently move forward majoring in minor things.

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Permanent link to this article: http://blog.ncm20.com/2015/06/building-a-high-performance-culture-part-20/

Steve Hall

We’re All On The Same Team: Parts & Service – Helping Each Other Succeed

Parts and Service

Have you ever wondered why Service and Parts Managers don’t get along? In reality, don’t they need each other to succeed? As we examine this, let’s start with some generalizations from dealing with thousands of Service and Parts Managers along with General Managers throughout my career. The overwhelming consensus is that Service and Parts just don’t get along. That’s not to say that there aren’t dealerships where they do get along very well, but those are definitely in the minority.

If you think about it, it’s easy to see why these managers can be at odds. Here are just a few reasons:

  • Service Managers are typically extroverts, whereas Parts Managers are typically more introverted.
  • Service Managers typically have a “whatever it takes” attitude towards resolving issues. At that moment, they just want the customer handled. In the same situation, the Parts Manager will typically revert back to the processes to work through the issue, looking for the reasons why it happened.
  • Parts Managers like to have a place for everything and everything in its place. Service Managers generally don’t.
  • Parts Managers work from an inventory of parts. If a part doesn’t sell today, it will still be on the shelf to sell tomorrow. Service Managers work from an inventory of time. If they don’t utilize an hour today, it’s gone forever.

I’m not saying that one is right and the other is wrong; it’s just that they’re wired differently. That’s what makes each of them good at what they do; they have different mindsets for different types of positions. Unfortunately, these different mindsets can often times cause friction and impede them from effectively working together.

Rather than belabor the differences, let’s work on why and how they must align to achieve their departmental goals.

Did you know that, in a typical dealership, 85% of the Parts Department gross profit is generated from their internal customers, meaning the Service Department (and the Collision Department, if they have one)?

Or, have you ever thought that the Parts Department doesn’t really sell anything? They fill orders and requests. On occasion, they may “sell” an additional item when filling a request, like when a front counter customer is purchasing a timing belt and, at that time, the counterperson suggests drive belts or a timing belt tensioner and the customer purchases them. But most of the time, they are filling requests. Again, this is not an indictment; it’s reality.

Why is it so important? Because it all comes down to knowing what truly affects your department’s numbers. Realizing that 85% of your Parts gross profit is generated from your Service and / or Collision Departments (and that they are truly the salespeople for the Parts Department) is vital in building a growth strategy for your Parts Department.

Let me explain a key correlation for your Parts and Service Departments.

When dealers are asked how much total gross profit they generate for every dollar of labor they sell, we generally hear an answer like this: “We have a gross profit on labor of 75%, so that would mean we earn 75 cents of gross profit for every $1.00 in labor that we sell.”

While that answer will appear accurate on the surface, it actually is incorrect. Remember, I said the Service Department is the salesforce for the Parts Department, and when I asked how much total gross profit is generated from every $1.00 in labor sales, this changes the previous answer. Because there is a relationship of Parts to labor sales, for every $1.00 in labor sold, a typical dealership will generate approximately $1.25 in total gross profit. You have to remember that when you sell labor, Parts will naturally be sold with it.

Realizing that the Service Department generates the vast majority of the Parts Department gross profit, what would be the most effective way to grow both your Parts and Service Departments?

You need to sell more billable flat-rate hours! Both departments must be focused on this primary goal.

Are you starting to see how these managers must start working together for the good of their departments? So far, I’ve focused on why the Parts Department needs to get along with Service. You may be asking, “Why does service care?” It still comes back to the driving factor for both departments — producing more billable flat-rate hours. The Service Department can’t produce as many billable flat-rate hours if they aren’t working well with the Parts Department. Parts can slow down or even stop production, thus costing the Service Department the ability to produce gross profit for themselves.

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What we need to find is common solutions that allow the Service Department to bill more flat-rate hours and the Parts Department to achieve more Parts sales through those hours billed. So, how do both managers find ways to increase the amount of flat-rate hours billed? Let’s start with what the Parts Department can do to help. Here are some thought starters:

1) Stock more breadth of Parts and less depth of Parts. With daily stock orders, departments need less depth of parts, or how many of each individual part number you have on hand. Then, you can repurpose this capital into having more part numbers in stock, thus increasing your breadth, or total number of parts that you have on hand. By having better breadth of Parts, the Parts Department will be able to have a higher filled-from-stock ratio. This will help keep Technicians in their bays producing billable flat-rate hours and help both departments grow.

2) Another way to increase billable flat-rate hours is to find ways to keep the Technicians in their bays working, rather than waiting at the Parts counter for Parts. The best way to achieve this is by delivering the needed Parts to the technician right to his bay. This saves walk, talk and wait time for the Technician, as they would normally make their way to and from the back Parts counter.

3) Stock fast-moving Parts in the express Service bays. At the very least, oil filters have to be in the bay, but in reality you should make provisions for additional fast-moving items like air filters, cabin filters and wipers. Service Managers, take note: once these parts are stocked in your bays to increase Technician productivity, the parts are now under your control and any shortages are the responsibility of the Service Department.

4) Aggressively chase parts rather than automatically subjecting the Service Department to the perils of the special order Parts process. If you can pick up the part locally from another dealer and complete the job today, do so.

5) Keep your Parts Department aware of the daily and month-to-date hours produced in the Service Department. Seldom will you have a great month in the Parts Department without your Service Department having a great month. Therefore, the Parts Department needs to know exactly how the Service Department is tracking.

By posting these numbers, this will keep the relationship of hours billed to parts sold fresh in your employee’s mind. Hopefully, this will make them more proactive in finding ways to keep the Technicians in their bays working rather than waiting in line, or talking about their latest fishing adventure.

You can even incorporate shop hours produced into the pay plans of back counter people to keep them focused on increasing flat-rate hours billed. This helps make them more open to solutions.

Those are some ways that the Parts Department can help the Service Department produce more flat-rate hours. But since this is a team effort, what can the Service Department do to assist in this effort?

The Service Manager and Department must realize that the Parts Department is a business partner with them, not a servant to them. The success of both Service and Parts will be greatly reduced if they don’t work together.

Think about this: how is the Service Department staffed? Do you have enough Technicians and Advisors? Are both of these positions selling and producing enough? If you’re short Technicians or Advisors, your labor sales will suffer, thus your Parts sales will suffer. This is a critical element for both departments. Remember: your Service Department is your sales staff for your Parts Department.

Next, track and scoreboard your “Parts sales to labor hours billed” ratio. This will help you determine any shortcomings that you have by individual employees.

The final suggestion that I would like to give is simple. Employees find ways to work their pay plans. If you want to increase Parts sales, include your “Parts sales staff”, meaning your Service Advisors. Incentivizing Advisors (along with Service Managers) will help increase your Parts gross profit and help break down some of the interdepartmental barriers, as they will feel more a part of the same team. Continue to promote teamwork to ensure that both departments are successful, as that’s how the dealership wins. Just like a football team, the offense must be successful and the defense must be successful for the team to win the game. One without the other just won’t get it done.

Permanent link to this article: http://blog.ncm20.com/2015/06/were-all-on-the-same-team-parts-service-helping-each-other-succeed/

Laura Madison

4 Reasons Why Video is Your Fiercest Weapon

iphone_video

Today, we can find social media participation in nearly every corner of the automotive industry; dealerships are active on Facebook, automakers are sharing images on Instagram, even salespeople have joined the movement tweeting and posting trying to win more business. It seems to be clear: social is not optional. However, even with all this progression in the social realm, the automotive industry is still missing one key component in social presence: video. Video has the most incredible opportunity for visibility, creating connection and building trust, but it remains the least utilized medium by our industry.

Think about yourself for a moment. How many videos have you watched this week alone? Chances are, at least a couple. Have you seen the video of the Nascar driver dressing in disguise and scaring the used car salesman on a test drive? Video is a powerful medium that people simply enjoy engaging with and sharing. For these reasons, video has the potential to become your fiercest marketing weapon, creating visibility and leads for your dealership. To be successful on social you must work video into your master (marketing) plan.

So why is video your fiercest weapon?

1) Our customers prefer it. IT’S EXCITING!! It’s visually stimulating and interesting. Video is engaging and easy to tune into. Our brain also processes video far better than audio alone or simple text. People remember 50% of what they watch compared to only 10% of what they read.

2) Video gives you the opportunity to communicate your message clearly. The visual element of video allows you to communicate non-verbally with things like facial expressions and tone. It was Tom Hopkins who said, “selling is the transfer of enthusiasm supported by conviction.” Video is the perfect medium to transfer enthusiasm with so many verbal and non-verbal elements at work: tone, body language, facial expression, and volume. Combine this clear and effective communication with how much people like to consume video, and you have pure marketing gold.

3) The Internet’s heavy players recognize the importance of video and favor it as a type of content. YouTube has Google behind it, making it an extremely strong tool for organic search engine optimization. This will aid in appearing towards the top of any relevant automotive keyword search in your area. Another heavy player in the social world, Facebook, favors video over other types of posts meaning a video uploaded straight into Facebook will be more visible to your audience than a simple text or picture post. More visibility allows you to make more impressions and connections on this social giant.

4) Video is your fiercest weapon also because video is do-able. It’s more do-able than you think. We don’t need fancy or expensive production with commercial quality. We need to create genuine connection and that can absolutely be accomplished quite simply using the camera on your smartphone. There’s a simple app called the YouTube Capture app that will allow you to film video, move clips around, edit out the beginning where you set the camera on the dash and the end where you hit the button to stop recording, and upload it straight to YouTube with a title, keywords, and a description. If you can use e-mail, you’ll be able to use this free app to create simple videos. Apps like this and simple tools like a smartphone make video absolutely do-able.

So, in review: consumers love watching videos, video allows you to communicate a message clearly, there are huge visibility advantages to video, and creating a video even off a cellphone is simple and do-able. You can use simple video to connect, differentiate your dealership, build relationships with clients, and win more business. Video is your fiercest weapon. Now get started.

Permanent link to this article: http://blog.ncm20.com/2015/06/4-reasons-why-video-is-your-fiercest-weapon/

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